Ofcom pushes improved next-generation fibre access

Ofcom proposes 'virtual' optical fibre links to drive Digital Britain's superfast broadband

Regulator Ofcom today announced proposals to deliver optical fibre next-generation services faster and more economically than envisaged in the Digital Britain report.

In its statement Enabling a Super-fast Broadband Britain, the regulator announced a shift to its original stance, proposing that competitors have access to a dedicated virtual link over new fibre lines laid by BT, known as virtual unbundling.

Virtual unbundling is defined by Ofcom as an approach whereby other communications providers (CPs) use BT's Openreach products and are based on its infrastructure.

The virtual link Ofcom is proposing would allow optical fibre to carry separately, multiple CPs superfast broadband services, with download speeds up to 100Mbit/s.

Buying just a virtual link such as this would be quicker and easier for CPs to use, but a possible obstacle could be the pricing structure.

But Ofcom added that BT would be able to set prices for the new wholesale products, "to enable them to make a fair rate of return," explaining that such prices would be "constrained by the wider competitive market."

To allow CPs to lay their own optical fibre, Ofcom has also proposed that they would get physical access to BT's underground ducts and overhead telegraph poles.

To determine whether other providers would be able to use duct access and telegraph poles, BT would need to provide detailed information to other communications providers about the available capacity and quality of ducts and poles, the Ofcom report said.

Ofcom also released a report entitled Economics of Shared Infrastructure Access commissioned from comms consulting firm the Cambridge Strategic Management Group (CSMG).

The report outlines the competing economics of new-build networks as against sharing BT's ducts, and points out the potential for allowing other CPs access to the telecom giant's ducts and telegraph poles.

"The cost of competition analysis shows that considerable cost can be avoided through duct access versus competitive new build network deployment," said the CSMG's report.

Competitive new build network deployment means that CPs will have to dig the ducts for the optical fibre themselves, dramatically increasing the costs.

The cost of multiple duct networks from the exchange to the street cabinet is avoided by shared duct access, the CSMG report points out, bridging the connection from the street cabinet to the residential premises with optical fibre.

This means that CPs continue to duplicate investment in the fibre and active elements of their networks and this multiple investment drives up the cost of competition, says the report.

The CSMG says that if four CPs compete to lay that final fibre-to-the-premises (FTTP) leg, the cost per end user "more than doubles".

Following its proposals for enabling a superfast broadband Britain, Ofcom also launched two consultations on the UK comms markets – a review of the wholesale local access (WLA) market and a review of the wholesale broadband access (WBA) markets.

The WLA market consultation concerns the physical connection between a consumer's premises and the local telephone exchange, and addresses services provided between different CPs, said Ofcom.

The WBA market consultation is aimed at supporting effective competition in the provision of retail broadband services – what consumers pay comms providers for their broadband connections.

Ultimately, the WBA market consultation will be affected by the WLA market consultation around price, choice and availability of critically important retail services, such as current broadband and traditional voice services, said Ofcom.

Both consultations would close on 1 June 2010, and Ofcom expects to publish its conclusions in autumn 2010.