Ofcom eyes rural coverage for next spectrum auction

With another spectrum auction creeping up on us, Ofcom has started to throw its weight around with the terms and conditions.

While 4G and call coverage is certainly improving in the UK, Ofcom has pointed towards the difference between urban and rural environments as a concern. This is partly to be expected, denser environments are simpler places to improve connectivity and much more commercially attractive, though Ofcom has been banging this drum for a while. We’re not too sure anyone is paying too much attention.

“Mobile coverage has improved across the UK this year, but too many people and businesses are still struggling for a signal,” said Philip Marnick, Ofcom’s Spectrum Group Director. “We’re particularly concerned about mobile reception in rural areas.

“As we release new airwaves for mobile, we’re planning rules that would extend good mobile coverage to where it’s needed. That will help ensure that rural communities have the kind of mobile coverage that people expect in towns and cities, reducing the digital divide.”

Looking at the numbers, the digital divide is no-where near the same problem as faced in other places around the world, but it is present. Almost all homes and offices can get a good, indoor 4G signal from at least one operator; while 77% are covered by all four networks, up from 65% a year earlier. 91% of the UK’s geography has a good 4G mobile internet signal from at least one operator, up from 80% last year, while 66% has ‘complete coverage’ from all four operators.

These numbers are heading in the right direction, though they only tell part of the story. 83% of urban homes and offices have complete 4G coverage, the figure for rural premises is 41%, while there are some remote parts of the country where there is no coverage at all.

The next auction will take place in late 2019 or 2020, auctioning off the 700 MHz and the 3.6 GHz – 3.8 GHz bands. Although the mid-range spectrum will be the 5G prize to chase, the 700 MHz could prove useful for providing good-quality mobile coverage, both indoors and across very wide areas, including the countryside. This is where Ofcom will start throwing its weight around. The winning bids will have to:

  • Extend good, outdoor data coverage to at least 90% of the UK’s entire land area within four years of the award
  • Improve coverage for at least 140,000 homes and offices which they do not already cover
  • Provide coverage from at least 500 new mobile mast stations in rural areas

With telcos revving themselves up for every opportunity to grab as much of the valuable and limited resource as possible, Ofcom can dictate the playing field a bit. Those who want spectrum will have to play by the watchdog’s rules and start offering bufferless cat videos to farmers.

On the broadband side of things, there does also seem to be improvements. The number of homes which cannot receive 10 Mbps, the Ofcom threshold for acceptable broadband, has fallen to 2%. However, this still leaves 677,000 homes and offices without decent broadband, 496,000 of which are in the countryside. The last push for any project is always the hardest, though customers will have the universal broadband service to rely on, forcing telcos to extend their network, should they not be willing to do it themselves. This service will come into play during 2020.

On the opposite end of the scale, ultrafast broadband has improved, it’s now accessible to 50% of British homes and offices, while 1.8 million premises now have access to ‘full-fibre’ broadband. This is still very poor in comparison to other nations across Europe, though it is a step in the right direction.

Ofcom reckons we’re clueless about broadband pricing

UK telecoms regulator Ofcom thinks consumers are ill-informed about the best broadband deals and wants ISPs to help rectify that.

As with many other utilities, UK punters often don’t shop around when it comes to broadband deals and often don’t even get the best service their current ISP offers at the price they’re paying.  Ofcom thinks that’s bang out of order and wants ISPs to be a lot more proactive about communicating this stud to their customers.

It’s kind of depressing that a regulator needs to get involved in this sort of thing at all. How difficult would it be for an ISP to notify their customers of the best deals on offer once their contract comes to an end? Not only is it underhand to conceal such things, but it’s presumably in the ISP’s interest to keep their customers happy so they don’t moan, churn or harm their precious net promoter score.

Yet here we are. Ofcom is proposing new rules that will oblige all UK communications service providers to flag up the best deals to their customers when discounted deals come to an end and also annually regardless of what kind of deal they’re on. “We’re concerned that many loyal broadband customers aren’t getting the best deal they could,” said Ofcom Chief Exec Sharon White. “So we’re reviewing broadband pricing practices and ensuring customers get clear, accurate information from their provider about the best deals they offer.”

The hook in Ofcom’s accompanying press release is a factoid that only half of the country is on ‘superfast’ broadband, while nearly everyone has access to it. What’s that all about? Ofcom puts the blame squarely at the feet of ISPs, as we’ve already explored, and it certainly seems like poor form for them not to even give their customers the best service at a given price point. Surely that should happen automatically.

Having said that it shouldn’t be beyond us to shop around every now and then. “While it’s true that half the battle in finding the most suitable and cost-effective broadband deal for your household is the availability of information, there must also be the will to find a better deal on the part of the customer,” said Dan Howdle of Cable.co.uk. “Thanks to the ‘stickiness’ of bundled TV packages, physical equipment such as dishes, set-top boxes and cable installations, along with no small amount of apathy when it comes to shopping around, too many stick with what they have and as such pay more than they should.”

Just in case CSPs were thinking of brushing this stuff off, Ofcom has thrown in an extra angle around ‘vulnerable’ people to ensure that wouldn’t be a good look. Additionally it’s launching a consumer campaign called Boost Your Broadband, fronted by consumer champion celeb Gloria Hunniford and designed to make it easier for punters to shop around.

Openreach to force feed localised fibre diet

It’s a new week, and therefore time for a new Ofcom consultation. This time the UK watchdog will be trying to understand whether it is feasible to hyper-localise regulations to encourage full-fibre networks.

While it might seem like a logical approach to dealing with an issue which is incredibly varied, the complexities have the potential to be quite staggering. Ofcom has previously commented on the difficulties in trying to force change onto the telcos, but this was a one size fits all approach; nuances depending on individual localities will most certainly test the competence, drive and patience of the team.

“Ofcom’s latest consultation underlines the importance of flexible rules when it comes to fibre infrastructure,” said Adrian Baschnonga, EY’s Telecoms Lead Analyst. “Levels of competition and willingness to invest vary by geography – and a more nuanced appraisal of the UK’s infrastructure landscape will play a key role in the regulation of fibre in years to come.”

In theory, the idea is a simple one. Regions will be placed into three categories, and the level of regulation will depend on the progress which has been made already. Those areas where fibre penetration is seemingly progressing steadily, i.e. the more commercially attractive areas, will feel the grace of deregulation, while on the opposite end of the scale, the more rural areas, rules will be firmed up to encourage investment.

The initial consultation will take place over the next couple of months, timetabled to finish next Spring, with the ambition of outlining the remedies by the Autumn and implementing during 2021.

The idea itself is of course a sensible one, even in a market as small as the UK the demands are quite varied, through implementation might be a lot more difficult. Telcos are anything but flexible in their approach to business, with changes being welcomed like man-flu.

EE and Virgin Media fined for ripping off customers when they leave early

UK telecoms regulator Ofcom has fined EE and Virgin Media millions of pounds for excessive early-exit charges.

Churn (loss of customers) is a constant worry for communications service providers and the best way to reduce it is to provide such a good communications service that subscribers don’t want to leave. Another way is to make it so odious and costly to leave that most people just can’t be bothered with the hassle and it seems EE and VM went a bit too far with the latter strategy.

Ofcom says it’s OK for CSPs to attach conditions to the early exit from contracts, but that those must be ‘clear, comprehensive and easily accessible’. Furthermore Ofcom stipulates “Communications providers shall ensure that conditions or procedure for contract termination do not act as disincentives for end-users against changing their communications provider”. It thinks thinks that’s what happened with EE and VM, which is why it has fined them £6.3 million and £7 million, respectively.

“EE and Virgin Media broke our rules by overcharging people who ended their contracts early,” said Ofcom’s spectacularly-named Director of Investigations and Enforcement, Gaucho Rasmussen. “Those people were left out of pocket, and the charges amounted to millions of pounds. That is unacceptable. These fines send a clear message to all phone and broadband firms that they must play by the rules, in the interests of their customers.”

VM doesn’t see it in quite the same way and is appealing the ruling. “We profoundly disagree with Ofcom’s ruling,” said Tom Mockridge, CEO of Virgin Media. “This decision and fine is not justified, proportionate or reasonable. A small percentage of customers were charged an incorrect amount when they ended one or more of their services early and for that we are very sorry.

“As soon as we became aware of the mistake we apologised and took swift action to put it right by paying refunds, with interest, to everyone affected. For those few people we could not locate, we have made an equivalent donation to charity.  We also reviewed our internal processes and systems, and improved our customer communications to make sure that this does not happen again.

“We wholeheartedly reject the claim by Ofcom that our ETC levels dissuaded customers from switching. This unreasonable decision and excessive fine does not reflect the swift actions we took, the strong evidence we have presented, or our consistent, open and transparent cooperation with the regulator.  We will be appealing Ofcom’s decision.”

EE hadn’t sent us a statement at time of writing, nor had it issued a press release. Read into that what you will but the fact that Ofcom reduced its fine by 30% in return for it not kicking up a fuss would seem to be significant.

Mockridge’s moan can be interpreted in a few ways. Taken at face value it’s easy to feel some sympathy. If indeed it was a small, innocent mistake that VM moved to correct as soon as it was aware of it, then the fine does seem excessive. If, however, VM knew what it was doing and thinks it should be able to get away with it just by saying sorry after it was caught, then it doesn’t.

At the very least the relative fines seem disproportionate. EE over-billed 400,000 of its customers for a total of £13.5 million in early exit charges over a six year period, while VM only rinsed 82,000 of its punters for £2.8 million in less than a year. Surely the scale of EE’s breach was far greater and it looks like it’s being too generously rewarded by Ofcom for its capitulation.

UK telecoms complaints at an all time low

The latest complaints data shared by UK telecoms regulator Ofcom reveals the level of moaning are at their lowest since it started collating them.

Ofcom has been logging consumer complaints about landline, broadband, mobile and pay TV services since 2010. The fact that they are at their lowest level ever would appear to indicate UK CSPs are doing a great job. Of course people could have just given up, or have become steadily more apathetic, or have found more effective ways to punish errant telcos than moaning to Ofcom, but let’s give them the benefit of the doubt.

“Although we’re encouraged that complaints are at their lowest levels since we started shining a light on this, some telecoms and TV companies are still falling short,” said Jane Rumble, Ofcom’s Director of Consumer Policy. “We expect those providers to up their game and deliver better service to all their customers.”

In the tables below you can see first the historical totals for the four categories of complaints and then the most recent ones for broadband, mobile and pay TV. We haven’t bothered with the landline ones because we figure nobody cares anymore. Now that Vodafone has got its act together there are no outstanding poor performers in mobile and similarly BT seems to have sorted out its pay TV operations.

Ofcom Q2 18 complaints historical

Broadband

Ofcom Q2 18 complaints broadband

Mobile

Ofcom Q2 18 complaints mobile

Pay TV

Ofcom Q2 18 complaints pay TV

Ofcom’s competitiveness quest continues with another ducts and poles assault

Ofcom has unveiled its latest edition of its business connectivity market review with an all too familiar feel; how can it force Openreach and BT to play nicer with competitors.

As with any former state-owned monopoly, BT/Openreach is in the enviable position of having the groundwork already laid for future-proof infrastructure. Of course it has not done enough across the years to meet the demands of tomorrow’s fibre-based diet, though one factor behind this is a lack of external pressure on the business. Without competition, the enforced need to invest and innovate is not there. This is ultimately Ofcom’s objective; create an environment which encourages other ISPs to lay their own connectivity foundations, decrease the reliance on Openreach and improve connectivity options for the consumer.

“We want to give companies greater flexibility to lay fibre networks that serve residential or business customers,” Ofcom said in a statement. “So today, we are consulting on proposals to allow access to Openreach’s ducts and poles to companies offering any type of telecoms services including high-speed lines for large businesses, networks carrying data for mobile operators and high capacity lines supporting broadband services. We intend to implement this unrestricted duct access from spring 2019.”

This review focuses on the areas where there is minimised or no competition for BT. Ofcom believes BT currently has almost 5,600 local exchanges, though at roughly 5,000 of these sites there is competition from fewer than two competitors. BT’s position has been deemed unacceptable in these areas.

Starting with the areas where there is evidence of potential competition, but BT still maintains ‘significant market position’, Ofcom will no longer impose a cost-based charge control or quality of service standards on BT’s wholesale services, which combined with access to BT’s ducts and poles, the theory is competitors will have a stronger incentive to build their networks.

In areas where network competition is unlikely to be a reality, Ofcom has proposed a price cap for services at 1 Gbps and below to protect customers and provide certainty and stability over the course of the review. What is worth noting is that this is a relatively short-review, as while the proposals could come into play next spring, 2021 would see a new review and therefore new proposals.

The final proposal comes at the 4,300 exchanges where BT faces no competition from rival operators for inter-exchange connectivity, and Ofcom has deemed opening up the ducts and poles will have little impact. Rival networks are too far from these exchanges to make it economically viable to serve these exchanges, therefore BT is the only choice as a supplier for backhaul. Ofcom is proposing a requirement for dark fibre at cost for inter-exchange circuits that connect to these locations.

This is of course not the first time the dark fibre suggestion has emerged from Ofcom. In April, Openreach officially launched a compromise between full dark fibre access and full managed service after months of bickering and reviews with BT attempting to resist the Ofcom intervention. Ofcom seemingly lost that battle, with fingers being pointed at suspect market definitions, though now it appears ready to restart the assault.

This is of course only the consultation stage of the process, though the plans are to get the new rules in place by next spring. Whether this timetable is realistic with the almost guaranteed legal challenge from BT remains to be seen, but this is just another step in the never ending Ofcom quest to improve connectivity and competition across the UK.

Ofcom officially releases BT from its Openreach undertakings

Measures BT undertook in 2005 to placate Ofcom over its wholesale operations are officially no longer relevant, so it doesn’t need to bother.

This seems to be a bit of a formality, since the legal separation of Openreach from BT is supposed to mean BT has no direct influence over the fixed line wholesaler. But at the very least it marks a milestone in BT’s relationship with Ofcom and gives Philip Jansen one less thing to worry about when he takes over next year.

The previous milestone was the official transfer of 31,000 staff from BT Group to Openreach at the start of this month. “This is an important day for Openreach as we’re fulfilling the commitments to Ofcom under the Digital Communications Review,” said Openreach Chairman Mike McTighe at the time. “Openreach now has its own Board, greater strategic and operational independence, a separate brand and an independent workforce – and we’re ambitious for the future.”

The long and short of it seems to be that Openreach now has a separate and distinct relationship with Ofcom and will be assessed solely on its own merits, with no BT baggage. This is probably good news for everyone and is ultimately what all this ‘legal separation’ business is supposed to be about. It should also protect Openreach from accusations of favouring BT. You can read the full statement here.

A possible manifestation of this new, unfettered Openreach may have been the announcement last week that it is dropping the price of full fibre broadband infrastructure to new homes by 75%. Openreach got a nice lot of kudos from public figures for doing its bit to improve fibre coverage, so job done there.

Ofcom isn’t happy with EE and Vodafone’s coverage predictions

UK telecoms regulator Ofcom has opened separate investigations into coverage predictions offered up by EE and Vodafone.

In what seems like a fairly pedantic move Ofcom has announced it’s looking into information provided by the two MNOs when it asked them to say how much of the country they expect to cover. Bizarrely EE is suspected of overestimating its 3G coverage, while Vodafone may have under-predicted its 4G coverage.

Why any of this matters is unclear. Ofcom uses these estimates for its own studies into UK mobile coverage, which are ultimately politically sensitive due to the tendency for politicians to grandstand on behalf of those people with dodgy coverage. It’s possible that Ofcom is getting political heat and is looking for scapegoats. Here are the two Ofcom statements.

“On 1 October 2018, Ofcom opened an investigation into EE’s compliance with requests for 3G mobile coverage predictions across the UK under these rules. This followed on from the identification by Ofcom of errors in the 3G/2100 MHz coverage data that EE provided which meant that its 3G coverage was over-predicted, particularly in rural areas.”

“On 1 October 2018, Ofcom opened an investigation into Vodafone’s compliance with requests for 4G mobile coverage predictions across the UK under these rules. This followed on from the identification by Ofcom of errors in the 4G/800 MHz coverage data that Vodafone provided which meant that its 4G coverage was under-predicted, particularly in rural areas.”

As indicated by the beeb, the operators will claim some combination of innocence, mitigation and contrition, so it’s hard to imagine anything significant resulting from these probes. Maybe Ofcom just likes to throw this sort of thing at operators every now and then just to keep them on their toes.

Ofcom ponders how to rid the internet of horridness

Nobody’s in favour of censorship but freedom comes at a price, right? This is essentially the premise for a new Ofcom discussion paper on online content.

Entitled ‘Addressing harmful online content’, the document has been published alongside some research specially commissioned into people’s concerns about online content. Its stated aim is to initiate a public conversation about this stuff but it gives the impression of trying to set the course of that debate in the direction of greater regulation and censorship.

The tension between security and freedom is as old as civilization and there are some standard techniques for persuading people to surrender their autonomy. A word currently in vogue is ‘harm’, which has the benefits of being emotive, universally disapproved of and yet broad enough to be subject to constant redefinition. If you can get people to agree that harm must be opposed then you can establish consensus on anything else so long as you position it in opposition to harm.

If harm alone isn’t emotive enough then it’s just a simple matter of determining the freedom you want to take away is harmful to children, and this is where many arguments in favour of regulating the internet start. Also likely to make an early appearance are ‘but’ phrases such as ‘the internet offers many benefits but…’ or ‘freedom of speech is important but it comes with responsibilities.’

The Ofcom discussion document is no different, but (you see, it’s easily done) it does appear to aspire to some degree of balance and thoroughness. After the standard preamble about how children need to be protected from horridness online (which is hard to disagree with, the question is how), it notes that regular broadcast TV is a lot more regulated than online platforms like YouTube.

Ofcom broadcast regulation table

The stuff about the BBC is irrelevant as it’s tax-funded and thus subject to a unique level of state interference. Ofcom gets to keep an eye on other broadcaster’s catch-up services but has no role in any other online content. IT reckons other online press is regulated by IPSO, which is not even approved as a regulator, and IMPRESS, which is not supported by the press. We can assure you that Telecoms.com has had not contact with either, but perhaps we will after this.

Ofcom also laments the different amounts of regulation a piece of video is subject to depending on how it’s consumed. Live TV gets a lot of oversight, catch-up less so and YouTube none right now. The growing impression is that a lot of this is targeted very specifically at YouTube, which also happens to be where children increasingly go to for video.

Ofcom broadcast regulation table 2

The document then moves on to a cherry-picked selection of anecdotes describing positive outcomes of the kind of regulation it seems Ofcom would like to see more of. In the absence of equivalent negative anecdotes, who can Ofcom expect this to be considered evidence in any honest and rigorous sense of the word?

More balance is shown when the document moves onto the challenges of trying to regulate a platform such as YouTube. They include the scale of the platform, the variety of content on it, the fact that much of it is user-generated and the fact that it’s global. There is also a genuine attempt to explore the dichotomy we flagged up at the start of freedom versus security.

“Another relevant principle is the safeguarding of freedom of expression,” says that passage. This means that people are able to share and receive ideas and information without unnecessary interference, such as excessive regulations or restrictions. When the need to protect audiences from harm comes into tension with the need to preserve free expression, the weight that a regulator places on the two aims reflects the priorities set by Parliament, as well as audiences’ evolving attitudes.

“Depending on the weight attributed in an online context, there is a risk that regulation might inadvertently incentivise the excessive or unnecessary removal of content that limits freedom of speech and audience choice. Such concerns have been raised in the context of the new German law.”

“Our experience in regulating broadcasting shows that while balancing audience protection and freedom of expression is not straightforward, it can be done in a way that is transparent, principles based and fair. Applying this to an online world might translate into greater attention to the processes that platforms employ to identify, assess and address harmful content – as well as to how they handle subsequent appeals.”

A lot of very good points were made by that passage, but the concluding one would seem to fundamentally undermine calls for greater regulation. These platforms (as well as the press) already have loads of processes in place to tackle exactly the harmful stuff Ofcom seems to be worried about. Many would argue YouTube has already gone too far in this respect (albeit mainly to placate advertisers), but in any case doesn’t that render calls for regulation redundant?

Another part of this discussion document that seems somewhat self-defeating is the research. You can see the headline data points below, which seems to indicate the majority of the UK is pretty worried about a bunch of stuff online. This in turn would appear to be a clear call to action for Ofcom and the government to intervene in order to reassure and protect the anxious electorate.

Ofcom survey findings

But when you navigate through the supporting documents you can see a very big gulf between spontaneous and ‘prompted’ responses. It is to Ofcom’s credit that it has been so transparent about the findings, but it must also know that the vast majority of media will simply report the headline figures without nuance or caveat. That sounds dangerously close to the kind of ‘fake news’ that everyone claims to be so worried about online.

Ofcom survey findings prompted

Ofcom survey findings prompted 2

It’s right that Ofcom should take the lead in initiating a (somewhat belated) public discussion on how the wild west of the internet should be approached. But it’s hard to escape the impression that its desired outcome will be new powers and laws that restrict online activity in the name of shielding our delicate, innocent eyes and ears from ‘harm’. If the internet is all about greater choice then shouldn’t we be trusted to decide for ourselves what’s in our own best interests?