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Next Generation New Build

Executive Summary

Introduction

1.1 In our April 2008 Next Generation New Build consultation we set out to clarify the regulatory environment for fibre network deployments in new build developments. We outlined our proposed approach and asked for views on a number of issues covering:

Standardisation of wholesale access products;
Ofcom’s approach to promoting competition and consumer choice;
Meeting existing regulatory obligations;
Providing uninterrupted access to emergency services; and
Duct access.

In this statement we outline the views of consultation respondents on these issues and provide guidance on our regulatory approach.

1.2 Our focus in this statement is specifically on next generation access networks deployed where no telecoms infrastructure yet exists, in other words new build fibre deployments. The Delivering super-fast broadband in the UK consultation, published in parallel to this statement further sets out our overall approach to regulating next generation access networks more generally, and its main focus is on next generation access overlay networks, where fibre replaces parts of existing access network infrastructure.

Regulatory approach

1.3 The central aim of our regulatory approach for new build fibre deployments is to promote competition, which will provide consumers with the benefit of choice. We are keen to avoid the situation where consumers in a new build development with a fibre network only have access to the services and products of a single communications provider. In order to ensure that this does not happen we want to promote competition in both infrastructure ownership and service provision, by ensuring appropriate wholesale access products are made available.

1.4 For new build fibre deployments, if it is apparent that there is only one telecoms access network then we would expect the operator of that network to provide access to it on a fair, reasonable and non-discriminatory basis through fit for purpose wholesale access products. Our approach applies equally to all new build fibre developments and operators.

1.5 At this stage we intend to adopt an approach to regulation based on setting out our expectations rather than formal regulatory intervention. As the market for new build fibre will initially be relatively small, this is likely to be less intrusive, and thus costly, to the industry which in turn should mean that it is more effective for consumers. It should also provide the new build fibre industry with an opportunity to develop flexibly and adapt as the market evolves and grows. However, if this less formal approach proves ineffective, we will undertake the relevant assessments and reviews, and, where necessary, impose formal obligations.

1.6 Until new market reviews are completed existing regulatory obligations will only apply to the extent that existing market definitions encompass these kinds of fibre deployments.

Wholesale access products

1.7 In order to ensure contestability and competition in new build fibre deployments, we believe that both passive and active wholesale access products may have a role to play.

1.8 We would expect new build fibre infrastructure providers to install spare capacity in their ducts and use sub-ducting to ensure that the capacity of any installed duct is sufficient to support duct sharing in the future, should that prove necessary to ensure effective competition.

1.9 We would expect operators to consider the provision of an Active Line Access-based product to support effective competition between service providers. We would like to see a standardised Active Line Access-based products support the five competitive characteristics that we have identified in our work with operators, vendors and consumer groups[^(-1-)]. We will continue to work with industry to ensure that the identified characteristics are supported by wholesale access products, and will help push forward the process of standardisation.

Replication of existing regulatory products

1.10 Currently BT and KCOM (in the Hull area) have been found to hold a position of significant market power (SMP) in certain markets and accordingly regulatory obligations have been placed on them. In fulfilling these regulatory obligations BT and KCOM are offering a number of ‘regulatory’ products. However, in a new build fibre network we recognise that it may be impractical and/or unnecessary to exactly replicate these existing regulatory products. Therefore we prefer to adopt a pragmatic approach to the wholesale products that are used to fulfil any regulatory obligations or expectations.

Uninterrupted access to emergency services

1.11 Ofcom’s interpretation of General Condition 3.1(c) is that the access network needs to be capable of supporting uninterrupted access to Emergency Organisations in the event of a loss of power in the consumer premise. In a ‘copper’ access network this requirement is usually fulfilled by the ability to power the telephone line from the exchange. However, it seems that there are currently no technologies commercially available that enable such line powering in a fibre access network and therefore in order to fulfil this requirement it is likely that backup power supplies would need to be installed in the consumer premise.

1.12 We would expect the network providers to initially supply the relevant customer premise equipment with a backup power supply. As per our VoIP guidelines[^(-2-)], the voice service providers do not always have the necessary control of the underlying network infrastructure and therefore may be unable to have control of the necessary network integrity and service reliability to ensure uninterrupted access. We would therefore expect these providers to take all reasonable steps, such as completing risk assessments and coming to service level agreements with network providers in order to comply with the General Condition but would, at this stage, leave to the voice service provider the decision to provide an alternative power supply themselves.

1.13 The decision about the exact length of time a backup power supply should last is for network and service providers to determine. However, to provide an indication of what level of time we would consider practicable and reasonable, we support the option chosen by new build fibre providers that are generally initially opting for backup lasting at least 4 hours. This is also in line with the options followed internationally.