Out-Law News 2 min. read
31 Mar 2015, 1:17 pm
The three telecoms companies said forcing them to provide rival operators with access to their 'dark fibre' or ducts and poles would disincentivise future investment in telecoms infrastructure. Dark fibre is a term used to describe the unused additional optical cables operators install alongside their active network to allow for easier expansion of the capacity of their network in future.
Ofcom last year raised the possibility of forcing BT to allow rival networks to use its dark fibre to offer competing communication services to businesses in an initial consultation as part of its three-yearly business connectivity market review (55-page / 486KB PDF). Ofcom is due to outline whether it intends to impose such 'passive remedies' on BT in the next few weeks. Ahead of this, BT, Virgin and KCom have jointly written to Ofcom outlining their position on this issue.
According to a report by the Financial Times the letter states that the telecoms companies believe opening up access to dark fibre or ducts and poles would cause "significant regulatory uncertainty, undermining the return on sunk investments and therefore disincentivising future infrastructure investments”. They also said that "allowing multiple operators to tamper with the physical network will cause service faults for customers", the report said.
BT, whose Openreach division controls its telecoms network, confirmed the accuracy of the Financial Times' report on the letter to Out-Law.com.
"The UK has a vibrant wholesale business connectivity market, with strong competition and innovation amongst a large number of providers," a BT spokesperson said. "In fact, Ofcom’s latest data [published on 8 October] clearly shows growing competition, which if anything supports the case for further deregulation. We believe that forcing Openreach to offer access to its ducts or dark fibre would increase costs and add extra complexity to way UK businesses are served."
A spokesperson for Virgin Media confirmed that the company was supporting the BT-led lobbying. They said that "a stable and proportionate regulatory environment is a pre-requisite for ensuring continued investment" in telecoms infrastructure.
In its initial business connectivity market review consultation last year, Ofcom said it was considering requiring BT to "provide access to elements of its network infrastructure so that [communication providers] could use them to provide their own leased line services".
One remedy being considered would, if implemented, force BT to give rivals access to the ducts and poles they own to allow those communication providers to "deploy their own fibre as well as electronic equipment" in the same areas that BT is operating. In addition, or as an alternative, BT could be required to enable others' access to its dark fibre and thereby give other communications providers "access to unlit optical fibre between two fixed locations, enabling them to install their own electronic equipment".
Ofcom said in its consultation paper that it had not decided whether to either of the two remedies. BT is already subject to charge controls that restrict what it can charge other providers for wholesale "leased lines services".
Vodafone told Out-Law.com that it would not comment on the letter sent by BT, Virgin and KCom to Ofcom but said that it would provide the regulator with its views as part of Ofcom's recently launched review of digital communications.
A Vodafone spokesperson said: "We have made no secret of the fact that we would like Ofcom to review making available BT’s dark fibre capacity, which is not used to ensure a fair and competitive market post the proposed consolidation underway in the UK. All mobile operators rely on BT’s backhaul fibre network in order to connect base stations to provide consumers with mobile connectivity."
Ofcom is due to consult on its formal proposals when they are unveiled in the next few weeks and is expected to issue a final statement of its plans later this year. Any new regulations in the business connectivity market would take effect from April 2016.