AllPoints Fibre, Community Fibre, Gigaclear, Netomnia-Brsk and nexfibre, have formed the ‘PIA Coalition’ to pressure UK telecoms regulator Ofcom on access to Openreach’s passive infrastructure in its upcoming Telecoms Access Review.
The Physical Infrastructure Access (PIA) Coalition members represent more than five million premises that have been passed and are ready for service. It has conducted an independent economic analysis of Openreach PIA regulation which claims that alternative network operators (‘altnets’) ‘pay significantly more to access ducts and poles than Openreach charges itself.’ The goal of the coalition is to press Ofcom to ‘level the playing field.’
The Ofcom initiative
The companies recognise that Ofcom’s actions to open up Openreach poles and ducts to other operators has been a successful initiative, which has helped drive up fibre roll-out and adoption. Unfortunately, it appears that the details of the analysis have only been shared with Ofcom.
This initiative underlines the fundamental importance that sits at the heart of telecoms regulation – it literally boils down to ‘up poles and down holes.’ It is about regulating a utility – and recent experiences in the UK water industry underline how that can affect the supply-side of the market and, ultimately, customers.
However, it can also mean the difference between success and failure for various players in the market.
Recently, Openreach has been probably the best performing part of BT, albeit at arm’s length and doing ‘boring’ stuff (aka engineering). This does not necessarily mean, however, that it is abusing its position.
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By GlobalDataThat will be a decision to be made by Ofcom (which, with 1,424 employees covering UK telecoms and media regulation has more resources than many of the telecoms service providers it regulates) and which could enhance or annihilate many business plans.
Investment is proving a challenge
Robert Pritchard, Principal Analyst in Enterprise Technology and Services at GlobalData, comments: “This encapsulates a key issue in the UK, and most European, telecoms markets. The ability to invest in fibre and mobile networks is proving a challenge, resulting in staff reductions, the sale of non-core assets such as mobile infrastructure, and less ability to invest in innovation.
“This is exemplified by the ongoing debate about the proposed merger of Vodafone UK and Three UK. The UK CMA (Competition and Markets Authority) appears minded to reject the deal for fear of less competition in the consumer market. At the same time, blocking the deal will reduce investment in this crucial sector.
“Ironically, this is recognised by the same economists that have supported the PIA with their analysis, pointing out that a focus on price competition ‘has proved less successful at encouraging the development of innovative new (sic) products and services.’ Regulation may not be the most exciting aspect of technology, but it still lies at the core of every market.”
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