Ofcom has introduced a new public consultation for rule changes which will remove regulatory commitments for Openreach to provide Superfast broadband services over copper wires.
As it stands, rules dictate Openreach has to provide customers access to Superfast broadband services. This is a step-change towards the ultimate goal of full-fibre broadband, with Openreach being forced to incrementally increase broadband services. Although this seems like a sensible approach to walk the path to full-fibre, the worry is offering two different services might disincentivise investment in full-fibre.
“Openreach has announced plans for a trial in Salisbury in which it aims to migrate customers to full fibre and then withdraw copper services there at the end of 2022,” Ofcom said in a statement. “Openreach has requested changes to existing regulation to facilitate the early stages of the Salisbury trial. This consultation sets out our proposals in relation to those changes.”
The proposal open to consultation here is the removal of obligations for Openreach to provide Superfast broadband services, speeds of more than 24 Mbps, over copper infrastructure when full-fibre alternatives are available. This is only when a customer requests an upgrade (when moving to a new house for example) not when a contract comes to an end. Customers will be able to stay on current contracts should they choose.
There are two questions which need to be answered here. Firstly, will removing Superfast options for the consumer help drive more investment into full-fibre infrastructure. And secondly, how will the consumers react to being forced into most-likely more expensive broadband tariffs? Openreach and telcos will have to take a careful approach to pricing if this trial is to prove successful.
The plan for Openreach is to withdraw copper services from various markets as exchanges are upgraded to full-fibre. As each exchange area is upgraded, copper services will be withdrawn, this is the strategy across the UK and is important to support the investment case for full-fibre. Ofcom has seemingly listened to this case and is looking to adapt rules to support this case, and hopefully, accelerate the migration across to full-fibre.
Should the consultation be positive, the new approach would be introduced in Salisbury during September 2020, with the long-term plan to retire all copper-based services in 2022 in the area.
Outside of this trial in Salisbury, Openreach has also recently announced a number of wholesale price reductions to encourage wholesale telco customer to encourage consumers to switch to fibre-based offers.
The new prices will come into effect on September 1, designed to make Openreach’s full fibre platform more accessible, with the same terms and conditions available to all telcos, without any obligation to commit to specific volumes.
|Product||Price reduction||New price|
|Ultrafast (330 Mbps)||36%||£24.28|
|Ultrafast (110 Mbps)||20%||£17.28|
|Superfast (40 Mbps)||10%||£14.28|
Openreach also plan to launch 500 Mbps and 1 Gbps variants of its FTTP service during the next 12 months.
“We’re making great progress on our full fibre build programme and our discussions with customers about upgrading the country have been encouraging so far,” said Katie Milligan, Managing Director for Customer, Commercial and Propositions at Openreach.
“Naturally pricing is fundamental to that shift and we want to give our wholesale customers the confidence to invest at scale in their own full fibre products and services using our network. To do that, we’re offering them a greater incentive to switch their customers to a full fibre world, with more competitive pricing and a wider choice of products.”
The UK is pretty far behind the norm when it comes to fibre connectivity, though progress does seem to be accelerating in recent months. Should Ofcom be able to evolve the rulebook at the same time as Openreach taking a new mindset to pricing, the future does look a lot more positive.