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BT in Ofcom clash over 'dark fibre'

Published 15/05/2015

BT has been told to open up its high speed
BT has been told to open up its high speed "dark fibre" network to direct access by rivals

BT clashed with Ofcom today after the regulator told it to open up its high-speed "dark fibre" network to direct access by rivals, under proposals to promote competition in the £2 billion "leased line" data market for businesses.

The telecoms giant is already required to sell wholesale leased line products, using its fibre-optic cables as well as its network equipment, to other operators.

But the new proposals would allow the other companies to access the cables directly with their own equipment, rather than relying on BT's.

BT said the way the market currently operates already created a level playing field and the new plans would favour a few large companies to the disadvantage of others. It also said the proposals would undermine investment.

The telecoms giant has been facing flak from competitors over the way it controls the lion's share of the UK's telecoms network through its Openreach division, which some rivals say ought to be split off. TalkTalk welcomed today's announcement.

Ofcom said today's proposals were designed to promote "competition and innovation" in the leased line market - dedicated high-speed data links used by large businesses and mobile and broadband operators to transfer data on their networks.

The lines also provide links for schools, universities, libraries and other public bodies. Take-up is growing as consumers use more data on smartphones, tablets and connected televisions, and companies use sophisticated internet services.

The new plans would require BT to make "dark fibre" available in all parts of the UK except central London, where there is already deemed to be enough competition in the market, and Hull, where most lines are leased by Kcom rather than BT.

The service is known as dark fibre because the fibre-optic cables would not be "lit" using BT's electronic equipment but would instead be "lit" by a rival firm installing its own equipment at the end of the cable.

Ofcom said: "This should increase the opportunity for competitors to create tailored, high-capacity data links at cost-effective prices for their customers."

The regulator is also proposing new quality-of-service requirements on Openreach, saying it was concerned that the wholesale provider often takes too long to install leased lines and too often changes the date on which it promises to deliver services.

Ofcom's proposals are subject to a consultation ending on July 31, with final decisions due early in 2016 and taking effect in April.

Peter Ward, dealer at London Capital Group, said: "Expect BT to put up as much of a fight as possible over Ofcom's direction for the telecoms giant to hand to the rest of the market access to its fibre-optic cables.

"Ofcom's decision will be good news for rival providers and consumers alike, as BT's control of the underlying network has long been a source of frustration for them."

BT said: "Openreach's current offer creates a level playing field and a vibrant, competitive market with hundreds of competing companies, large and small.

"Mandating dark fibre risks favouring a few companies that have the greatest capability to deploy it, to the disadvantage of all other firms."

But rival telecoms and broadband firm TalkTalk welcomed the announcement.

It said: "For too long BT has been able to get away with delivering poor service to Britain's businesses at inflated prices and these recommendations will help drive competition into the commercial market and improve the service they receive."

Ofcom responded to BT's statement, saying: "Our proposals are intended to allow BT to protect its investment by making a fair return, while boosting competition and innovation among different operators.

"Dark fibre can help meet growing demand for data from large businesses that are central to the UK economy."

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