Companies news October 2017

BT/Openreach regulatory developments:

The Telegraph and ISP Review reported that  Culture Secretary Karen Bradley has written to Sharon White, the chief executive of Ofcom, suggesting that Ofcom’s proposed charge controls on Openreach’s wholesale pricing of up to 40Mbit/s fibre to the cabinet (FTTC) services risks disincentivising investment in new full fibre to the premise (FTTP) networks. More background on this here and here; the letter suggests that Ofcom’s proposals may be “at risk of not striking the right balance between ensuring appropriate consumer prices while driving necessary levels of long-term investment in the networks.”

Earlier in the month ISP Review reported Sharon White’s remark to the DCMS Committee inquiry into the work of Ofcom that a “key test” for the reform of Openreach is whether it enters into a co-investment deal with a rival operator. It also reported comments by Openreach Chairman Mike McTighe to the Broadband World Forum on the importance of investment in full fibre networks, acknowledging that Openreach “cannot do this on our own”.

ISP Review also reported that Openreach had received broad support for its proposals to conduct a large scale roll-out of fibre to the premise (FTTP) services (press release here and more background on this here and here). Also see coverage from the Independent and Telegraph; Openreach estimates that its fibre proposals would cost somewhere between £3bn and £6bn and will develop more detailed plans for investment by the end of the year including potential pricing and coverage areas. Openreach is calling for a regulatory environment that encourages investment and for agreement to be reached on how costs can be recovered fairly “from all those that stand to benefit”.

ISP Review reported on Openreach’s forthcoming launch of its new Optical Spectrum Access (OSA) product for ISPs, OSA Filter Connect (also see Computer Weekly, The Register and Telecompaper). This follows the cancellation of Openreach’s planned dark fibre access product as a result of a successful legal challenge to Ofcom’s proposals. From ISP Review’s commentary: “The proposal for OSA Filter Connect is for the operator to extend their current OSA portfolio to offer a new solution whereby ISPs can connect their own active equipment alongside Openreach managed wavelengths on a common OSA bearer (this seems like kind of a virtual fibre solution).” Openreach is conducting a one month consultation on its plans with a view to a spring 2018 launch. ISP Review also reported comments from SSE Telecoms that the proposals are an “inadequate alternative” to full dark fibre access. Also see coverage from the Telegraph. ISP Review also reported on Openreach’s new pricing for its fibre on demand broadband service.

The Telegraph reported that the Government is facing new scrutiny from the European Commission in relation to BT’s payment of business rates; European competition authorities have called on the Government to defend its tax treatment of BT’s telecoms infrastructure against claims it favours it over rivals.

BT/Openreach USO developments:

The Financial Times reported on new details from Openreach of their Universal Service Obligation (USO) proposals. Openreach’s offer will cost the company between £450m and £600m, which it expects to address through higher wholesale charges. The offer is dependent upon Ofcom easing regulation in the wholesale access market. Openreach expects that 98.5% of homes and businesses would be connected to a fixed broadband line by 2020 and 99% by 2022.

ISP Review reported that ISPs  including Sky Broadband, TalkTalk, Hyperoptic and Gigaclear are considering a possible legal challenge if the Government chooses to adopt Openreach’s USO proposals. The Telegraph also reported that legal advisers have raised concerns with the Government that Openreach’s offer could be challenged in the courts as unfair state support.

Legal challenges to Ofcom’s 4G/5G spectrum auction:

Writing in the Financial Times, Ofcom Chief Executive Sharon White defended the regulator's decision to cap the amount of mobile spectrum an operator can control, after legal actions were launched last month by BT/EE and Three in relation to Ofcom’s forthcoming 4G and 5G spectrum auction. She also flagged the delay this will create for the roll-out of 5G services in the UK, with Ofcom originally hoping to complete its auction this year.

Three is arguing for a 30% cap on the amount of spectrum any one operator can hold (Ofcom has proposed 37%) while BT/EE is arguing that it should not be restricted by any cap on the amount of 5G spectrum it can hold. Also see coverage from Out-Law. The Financial Times also reported BT’s addition of a separate element to its challenge in relation to spectrum held by UK Broadband, previously acquired by Three. The Telegraph reported remarks by Vodafone that its rivals are being “selfish” in challenging the auction rules and that 5G should be deployed as quickly as possible.

Consumer broadband developments:

Ofcom announced new proposals to enhance its existing codes of practice on broadband speeds to improve the information available to consumers. These include improving speed information at the point of sale and in contracts, by reflecting the slower speeds people can experience at peak times (8-10pm for residential customers, and 12-2pm for businesses),  and by ensuring providers always give a minimum guaranteed speed before sale.

The Social Market Foundation (SMF) think-tank published a new report suggesting that big companies in sectors such as broadband, mobile telephony and personal banking do not face enough competition, resulting in a lack of choice, higher prices and underinvestment for consumers.

The latest broadband customer satisfaction survey from Which? found that more than half of households experience problems with broadband, with customers of Virgin Media, Talk Talk, Sky and BT most likely to experience an issue. Slow speeds were the biggest problem overall, with one in five experiencing difficulties.

Cable announced findings from “the UK’s largest ever consumer broadband study” based on interviews with 16,753 UK broadband customers across a two-week period. Providers were rated by on how well they met customer expectations in five categories: reliability, value for money, customer service, speed, and the process of switching/joining. Plusnet were rated the highest for value of money, customer service and the switching/joining process. Virgin Media was first for both reliability speed. Sky, coming in third overall, also performed well, coming second in reliability, customer service and switching/joining. TalkTalk came in last place out of the 'big six" providers, with BT second-last.

The Advertising Standards Authority (ASA) ruled that one of Hyperoptic’s promotional circulars was too similar in appearance to a communication from BT: “it was…not obvious that the circular was a marketing communication and was not private commercial correspondence. Because we considered the marketing communication was not obviously identifiable as such, we concluded that the ad breached the Code.” The advertisement must not be used again in its current form as a result.

Other companies news:

• TalkTalk published pricing for G.fast services (Faster 150 Fibre and Faster 300 Fibre) currently available in a number of trial areas and ISP Review reported on WarwickNet’s new G.fast services.
• ISP Review also reported on BT’s progress with the roll-out of G.fast and fibre to the premise (FTTP) services.
• CityFibre announced a partnership with Cheltenham-based ICT company Bamboo Technology Group Ltd to deliver gigabit broadband services in Cheltenham and Gloucester.
• SSE Telecoms announced it had been selected to deliver network connectivity to Countesswells, a new £800 million development in Aberdeen, comprising 3,000 homes, two primary schools and an academy, community facilities, shops, offices, playparks and civic spaces.
• Hyperoptic announced 50% increases to its line speeds by 50% at no extra charge, with 20Mbit/s services to be upgraded to 30Mbit/s and 100Mbit/s services to 150Mbit/s.
• Gigaclear announced a contract with Carillion telent to deliver ultrafast full fibre broadband to more than 80,000 properties in some of the most rural parts of Devon and Somerset. It also announced that more than 10,000 homes and businesses in West Oxfordshire will be connected to ultrafast broadband by the end of 2019 in two major infrastructure projects for the area. ISP Review reported Gigaclear’s call for a new national plan that acknowledges and prioritises the  roll-out full of fibre networks across the whole of the UK.
• Sckipio demonstrated over 3.1Gbit/s of download and 900Mbit/s of upload on production silicon using G.fast bonding running at 212MHz: “The new Amendment 3 G.fast solution proves that Sckipio’s G.fast well exceeds the ultrafast performance targets of operators and regulators for the foreseeable future.”