Chapter 1 Responses to public consultation
Chapter 2 Access to buildings and on-site sharing
Chapter 3 Sharing on public land
Chapter 4 Trench sharing
Chapter 5 On-site duct and pole ownership
Chapter 6 Oftel’s conclusions on the consultation process
Oftel published a Consultative Document entitled Duct and pole sharing in February 1996. Its main objective was to seek views from public telecommunications operators (PTOs), site-owners and customers on whether duct and pole sharing would enhance competition.
The Consultative Document looked at BT’s current policy as regards duct and pole sharing and broader concerns that there were circumstances where the absence of sharing might be an impediment to network competition.
In the Consultative Document Oftel reached a number of provisional conclusions on different aspects of sharing:
In the light of BT offering some experimental voluntary arrangements for sharing of ducts leading from its network onto a customer site and ducts on a customer site, Oftel was not minded to pursue this aspect separately, at least for the time being.
Although there was little evidence of enthusiasm among PTOs to get involved in sharing on public land, Oftel had an open mind whether sharing should be required at all; or, if it was, whether it should be required of BT alone.
While this had many of the benefits of duct sharing without some of the complications, Oftel saw no need for it to seek to intervene unless there was evidence that PTOs were not co-operating on sharing trenches.
Oftel was of the view that this was a property rights issue and it would be inappropriate for it to get involved.
This statement sets out Oftel’s conclusions in the light of the representations received and of the adoption of the Interconnection Directive (97/33/EC) (the Directive), which is due to be implemented into national law by 31 December 1997.
Any comments on this statement should be sent to:
Nicholas Woodrow
Oftel
50 Ludgate Hill
London EC4M 7JJ
Fax: 0171 634 8949
Written comments will be made publicly available in Oftel’s library except where respondents indicate that their response or parts of it are confidential. Comments should be received by 30 November 1997.
There will then be a further period up to 14 December 1997 during which comments are invited on any submissions made to Oftel in the initial period.
Oftel intends to set up a link between this document on Oftel’s Web pages and any comments about it placed on respondents’ own Internet pages. Please contact Cate McLaurin at Oftel on 0171 634 8752 to organise this. Or e-mail press.office.oftel@gtnet.gov.uk
Confidential responses should not be sent via the Internet.
1 The purpose of this statement is to publicise the views expressed by respondents and to obtain the views of interested parties on those results. Oftel was interested to see whether there was a competitive need to take further action in relation to the sharing of facilities to ensure effective network competition. Oftel was told by respondents that there was not an acute need for sharing, but wishes to ensure that genuine needs are not ignored.
2 The Interconnection Directive ( the Directive bxi ) recognises that sharing will normally be a matter for commercial and technical agreement, but requires Oftel to encourage facility sharing between operators. Where sharing is of obvious benefit (including where ducts and poles may be described as essential facilities) and duct and pole owners are unwilling to grant access to other operators, the Director General is prepared to intervene and resolve disputes in accordance with the provisions of the Directive.
3 Oftel therefore encourages BT and other licensed operators (OLOs) to make duct and pole capacity available to each other, on a commercial basis, especially where access to ducts and poles is limited, ie crossing natural and structural obstacles. Oftel will use its powers under the Directive to ensure facilities are shared where alternative methods of delivery are not commercially viable and effective competition is threatened. However, this is less likely to be necessary in the UK than elsewhere in the European Union because of the existence of network competition.
4 Oftel does not expect at this stage that there will be requests for an imposed system of sharing ducts and poles on public land in the light of the views expressed. The majority of UK operators do not believe it will increase competition and many UK operators competing with BT have already invested heavily in constructing their own parallel networks.
5 Oftel invites comments from PTOs on whether the terms and conditions being offered by BT for its trial for sharing on-site ducts are fair and reasonable (see paragraph 2.3).
6 Trench sharing appears to be an unevenly established practice. Oftel encourages PTOs to share trenches where it is of economic and environmental benefit.
1.1 In total, 39 representations were received from a variety of quarters including 19 telecommunication advisory committees (TACs) and 11 PTOs – a full list of respondents is in Annex A.
The Consultative Document asked for responses to a series of nine questions and also for more general comments on duct and pole sharing. A summary of respondents’ comments is provided below and their views are outlined in more detail in Annex B.
1.2 Of all operators, BT believes that sharing would have the greatest impact on it. BT’s view is that sharing will not encourage competition and that there should not be regulation in this area. Although BT does not explicitly argue that the costs of sharing would be in excess of the benefits, BT seems to imply that this would be the case.
1.3 BT states that it wishes to retain ownership of all its network infrastructure and, if it were to share ducts and poles with competing operators, it would expect payment for the capacity taken by those operators.
1.4 In relation to natural or structural obstacles, such as bridges or rivers, which may restrict the cable capacity on a particular route, BT does not consider that they create a problem for operators trying to gain access to these routes as there are always alternative methods or routes available (eg in the case of a river, installing new duct on the same, or an alternative, bridge, sub-aqueous cable, tunnelling or microwave links). However, BT has said that it is willing to consider voluntary and reciprocal arrangements with other operators.
1.5 BT believes that it could adopt a more flexible policy with regard to on-site sharing to satisfy the requirements of OLOs in that area. BT also states that it has no concerns about trench sharing as it has been sharing trenches with other utilities, as well as with PTOs for many years.
1.6 The view that duct and pole sharing will, in principle, encourage competition is held by just over half the other respondents. However, the majority of OLOs appear to agree with BT that it will not. Those OLOs who have already invested heavily in competing infrastructure are not enthusiastic about sharing it with competing operators. Based upon these respondents’ views, it is by no means clear that sharing is desired by market participants.
1.7 As regards the costs and benefits of sharing, the majority view of OLOs is that the costs would be greater than the benefits. This majority is even larger if due weight is given to the views of the Cable Communications Association (CCA) which represents a number of cable operators.
1.8 OLOs are not all in agreement about whether all operators should be obliged to share off-site ducts and poles (ie, in or on public land, such as a public highway). If sharing is to take place, most respondents believe that payment should be made to the owner of the ducts or poles being shared. OLOs have suggested various methods to determine the level of such payments.
1.9 All those who responded to the question of whether natural or structural obstacles cause particular problems disagreed with BT and have confirmed that this is a real issue. OLOs have said that such obstacles can make network building more time consuming and that access to existing ducts and poles would be beneficial. Some OLOs believe that in these circumstances the duct owner should be obliged to share with other operators.
1.10 In general respondents were uncertain whether BT adopting a more flexible policy towards the sharing of its own ducts and poles would be a practical solution to the issue. OLOs have said that a fair and reasonable commercial offering would be better than Oftel regulation.
1.11 Some concerns remain about the issue of ownership of ducts and poles on private land, but there is some acceptance that this is a property rights issue and that Oftel should not intervene.
1.12 There is general agreement among the OLOs who responded that benefits would accrue from a more flexible approach from BT with regard to on-site sharing. Some respondents regarded the sharing of on-site ducts and poles as a very important issue because, in the absence of sharing, customers may be deterred from switching operator because of the disruption caused by another operator installing its own ducts and poles.
1.13 It is also considered that, although trench sharing does occur, it is not yet a universally established practice.
2.1 The Consultative Document noted that new holders of PTO licences had not pressed Oftel to intervene to achieve greater access to BT’s ducts and poles. However, Oftel had received a small number of complaints from customers which mainly related to the sharing of ducts leading from a PTO’s network onto a customer site (lead-in ducts) and the sharing of PTO ducts on a customer site (on-site ducts).
2.2 It was stated in the Consultative Document that BT had agreed to liberalise its policy in respect of sharing on-site ducts and poles, and also sharing where access to a customer site was limited. BT proposed a trial for sharing on-site ducts as a first stage in implementing this policy.
2.3 BT notified Oftel of the following criteria and prices for the trial sharing of on-site ducts.
`Surplus’ in this context means a duct bore not needed for BT network growth or maintenance in the next five years, which in practical terms will amount to:
2.4 Oftel understands that BT invited two licensed operators
to participate in the trial to iron out any difficulties in
providing this product, with four sites being identified as being
suitable for sharing. To date no agreement has ever been reached
in respect of sharing BT’s ducts with any OLO. According to
BT, only four OLOs have expressed any interest in the product. It
is not clear whether the cost of sharing has proved unattractive
to other operators or whether there
is a lack of demand for this product.
2.5 BT’s view is that its policy meets OLOs’ and customers’ concerns in respect of on-site duct and pole sharing. While some operators welcomed BT’s willingness to be more flexible about sharing ducts and poles, concerns were expressed that BT may argue that it has insufficient capacity to allow sharing by other PTOs. BT has now published criteria for determining whether there is `surplus’ capacity in a given duct.
2.6 Oftel supports the view emerging from the consultation that a commercial offering would be preferable to regulation but, like some respondents, it is concerned that in the absence of sharing customers may be deterred from changing operator because the option would mean the acceptance of disruption caused by another operator installing its own ducts or poles.
2.7 Oftel believes that while it may be too early to judge whether a more flexible approach by BT would itself be sufficient to meet the concerns raised in respect of duct and pole sharing on-site and customer access sharing, regulatory intervention would be inappropriate if voluntary sharing arrangements are working to the satisfaction of those wishing to share with BT.
Oftel invites comments from PTOs on whether the terms and conditions being offered by BT for its trial for sharing on-site ducts are fair and reasonable.
3.1 It has been a long established policy in the UK that the best way to promote the development of the telecommunications market to the benefit of customers was through a policy of encouraging the establishment of competing networks. The alternative, based on regulated access to an open network, would require delivery of services over a network belonging to a monopoly supplier and would involve permanent detailed regulation.
3.2 The 1996 Consultative Document noted that BT’s current policy is that it will not share, in any circumstances, off-site ducts and poles (ie, in or on public land, such as a public highway) for legal, technical, operational and commercial reasons.
3.3 A PTO’s statutory powers to execute works in the street and on others’ property are set out in Schedule 2 of the Telecommunications Act 1984 (the Code). BT is of the view that the powers granted under the Code permitting a PTO to install apparatus in streets and on private land are expressly limited to the installation and running of that particular PTO’s system authorised under the licence granted to it under the Telecommunications Act 1984(the Act). The provisions of the Code have therefore been interpreted to mean that sharing between operators of telecommunications apparatus installed under those powers, including ducts and poles, is not authorised under the Code. Further, neither the licences granted to the individual PTOs under the Act nor the relevant provisions of the New Roads and Street Works Act 1991 require the sharing of ducts, poles or trenches.
3.4 Section 189 of the Broadcasting Act appears to provide a limited remedy in that BT may share its ducts with a cable operator who is permitted to carry cable TV signals. However, the Broadcasting Act does not permit such sharing with any other operator to whom the Code applies, unless that operator is also permitted to carry cable TV signals.
3.5 The Directive, which must be implemented into UK law by 31 December 1997, does not itself impose an obligation on operators to share facilities. However, Article 11 requires national regulatory authorities (NRAs) to `encourage’ the sharing of facilities and/or property with other organisations providing telecommunications networks and publicly available telecommuni-cations services. Facility and/or property sharing arrangements between operators `may’ be imposed by the NRA, but only after an appropriate period of public consultation during which all interested parties must be given an opportunity to express their views.
3.6 The Department of Trade and Industry has published a Consultative Document on implementation of the Directive into national law. In implementing the provisions of the Directive it is proposed that the Act will be amended so that undertakings providing public telecommunications networks and/or publicly available telecommunications services with Code powers are permitted to share infrastructure built using those powers with other such undertakings. The proposed amendment includes a provision in similar terms to section 189 of the Broadcasting Act 1990.
3.7 The Directive states that the NRA shall encourage the sharing of such facilities, but the presumption will be that sharing is normally a matter for commercial and technical agreement between operators.
3.8 Where operators cannot reach agreement, the Directive also gives the NRA a power, but not an obligation, to intervene to resolve disputes between owners of facilities and/or property and prospective sharers. Furthermore, the Member State may impose facility and/or property sharing arrangements after an appropriate period of public consultation.
3.9 Although the Broadcasting Act permits operators who provide or convey cable programmes to share ducts, Oftel is not aware of any such sharing arrangements. This may be because currently only one broadband and local delivery operator is licensed to operate in each franchised area. Therefore, to impose a mandatory obligation on such operators to share their ducts with each other would appear to be unnecessary at the present time.
3.10 It is BT’s stated policy not to share, in any circumstances, its off-site ducts and poles with other PTOs. BT believes that off-site duct and pole sharing would discourage infrastructure-based competition and that no situation exists where service competition could not be achieved by alternative means. On the other hand, some operators have argued that sharing will lead to economic and environmental efficiency and more easily allow new entrants to offer competing services. BT also believes that sharing of infrastructure raises concerns over the integrity and security of its network.
3.11 A number of respondents to the public consultation believe that sharing should be addressed by the application of pragmatic commercial interests as opposed to regulation. This is consistent with the approach adopted in the Interconnection Directive, but is not the preferred regime in the USA where duct and pole sharing is now regulated. However, the US regime is, as yet, largely untested in practice. A brief outline of the US regime is set out in Annex D. In the UK, OLOs have not generally sought Oftel’s intervention to obtain access to BT’s ducts and poles and Oftel does not expect to be requested to impose any sharing of ducts and poles on UK operators at this stage.
3.12 On the other hand, Oftel believes that BT’s total rejection of off-site sharing is not acceptable because there may be situations where it would be desirable for sharing to take place; for example, where there is limited access across natural or structural obstacles.
3.13 It is not clear whether BT’s current attitude towards sharing of its off-site ducts and poles is actually causing problems where there is a natural or structural obstacle. BT says it does not view this as being a general problem because of the availability of alternative ways round, over, under or through such obstacles.
3.14 Oftel is aware of at least one instance where an OLO has approached BT to seek its co-operation, requesting BT to make available some of its duct capacity across a bridge for the OLO to lay its own cables. In responding to that request, BT took the view that the OLO concerned had not demonstrated that access was not possible via routes or methods other than via BT’s duct. The result was that the OLO laid its own ducts at a substantial extra cost because of the urgency to continue with its network build programme.
3.15 Although the OLO concerned no longer requires access to the ducts concerned, this particular incident supports Oftel’s view that BT’s current policy not to share, in any circumstances, its off-site ducts and poles may be damaging to the promotion of competition and to the enviroment. Oftel considers that BT’s attitude to off-site sharing is all the more regrettable where access over natural or structural obstacles is restricted and encourages BT to adopt a more cooperative policy, making duct or pole capacity available to OLOs in such situations. BT has stated that it would be willing to consider entering into voluntary and reciprocal arrangements in such situations.
3.16 The demand for sharing appears to be reduced by the fact that many operators have already built their own parallel networks. What is more, the advent of radio fixed access networks has also reduced the demand for ducts and pole sharing to the extent that such networks do not require access to ducts and poles. However, sharing may be appropriate where an operator has market power and prospective competitors have no commercially viable alternative to sharing.
3.17 It would therefore appear that, on the one hand, there is an arguable case against duct sharing where new competing networks have already been built and on the other hand there could still be a case for duct sharing where this would permit the extension of networks to areas where no competition to BT exists at present. Cable operators have more or less built their own networks in urban areas but sharing would have greater benefits in less urban areas and would encourage extension of networks to less densely populated areas.
3.18 A legislative framework permitting voluntary sharing arrangements based on commercial agreements between operators is Oftel’s preferred approach, and is in keeping with the approach favoured under the Directive. The Directive also provides that the Director General, as NRA, may intervene to resolve any disputes that may arise. If BT, as the major owner of duct and pole resources, refuses to cooperate with other operators where access is restricted, Oftel may consider further the imposition, in accordance with the provisions of the Directive, of obligations to share duct and pole capacity in certain circumstances.
3.19 As stated above, if operators cannot reach agreement on sharing by negotiation, the Directive states that the Director General, as NRA, may intervene to resolve disputes. The Director General would only intervene as a last resort, as the presumption in the Directive is that facility sharing is to be a matter for commercial and technical agreement. The Directive also permits the Director General to impose sharing after an appropriate period of consultation.
3.20 The Director General may also be able in limited circumstances to intervene under the existing terms of operators’ licences issued under the Act, for example the Fair Trading Condition (introduced as Condition 18A into BT’s licence on 1 October 1996 and which took effect on 31 December 1996) where refusal to share ducts and poles might be regarded as an abuse of a dominant position. (See paragraph 71 of the Guidelines on the Operation of the Fair Trading Condition issued in March 1997.)
4.1 BT considers that trench sharing is not a contentious issue for PTOs because it has been occurring for many years between utilities and PTOs. Other PTOs consider that it is an unevenly established practice which should be further encouraged. BT concedes that trench sharing does not carry the same risk to the integrity of the network as the sharing of ducts because it does not involve sharing access to individual duct bores and locked joint boxes.
4.2 Oftel does not consider that regulatory intervention is justified in this area as all parties agree that it is good practice, although not yet universally established. Oftel will review this situation if evidence is subsequently produced that operators are proving reluctant to share trenches.
5.1 BT wishes to maintain its current policy of owning all its network infrastructure. Other respondents expressed the view that consideration should be given to BT having already obtained wayleaves for its own ducts and poles whilst being the monopoly provider. It was also considered that, in the absence of sharing, OLOs may not be able to gain access to customers because a landowner does not wish to have a multiplicity of ducts and poles on his land.
5.2 This can cause particular concern when the prospective customer is a tenant and access has to be granted by the landlord rather than the customer. If the OLO cannot gain access speedily, either via a sharing agreement with BT or a wayleave from the landlord, the customer may have no effective choice of network provider.
5.3 Oftel encourages BT and other operators to share lead-in and on-site ducts and poles where sharing is of benefit and will promote network competition.
Oftel invites comments from PTOs on whether the terms and conditions being offered by BT for its trial for sharing on-site ducts are fair and reasonable and whether they see any technical or commercial problems in the arrangements proposed by BT for sharing of lead-in and on-site ducts (see paragraph 2.3).
Oftel does not expect at this stage to be requested to exercise its power to impose a system of sharing. Many UK operators competing with BT have already invested heavily in constructing their own parallel networks. These operators would be severely disadvantaged if, having invested heavily in their own networks, including ducts, other operators were allowed to take advantage of the operator’s own ducts (or BT’s) at a reduced cost. The position may be different where an operator has market power and other operators have no viable alternative to sharing.
Oftel considers that a legislative framework permitting a voluntary system of sharing is more appropriate and is in accordance with the provisions of the Directive (see paragraphs 3.5 to 3.8). Implementation of the Directive should permit such a framework to be established. Sharing will normally be a matter for commercial and technical agreement. However, in circumstances where sharing is of obvious benefit and duct and pole owners are being recalcitrant in granting access to other operators, the Director General will have the power to intervene and resolve disputes in accordance with the provisions of the Directive, and, if necessary to impose sharing as appropriate.
Oftel therefore encourages BT and OLOs to make duct and pole capacity available to each other, on a commercial basis, especially where access to ducts and poles is limited, ie crossing natural and structural obstacles.
As stated in the Directive, sharing arrangements should be concluded on a commercial basis. It is Oftel’s view that normally it would be unreasonable to expect operators to lease space to competitors at below an appropriate measure of cost. The on-site trial leasing charges published by BT (see paragraph 2.3) provide a good example of the terms infrastructure owners might expect from leasing space to competitors, ie reimbursement of replacement costs and engineering costs plus a rental charge. Oftel does not consider at this stage that prescribed charges are appropriate, but welcomes operators’ views on BT’s trial rates.
Trench sharing appears to be an unevenly established practice, but Oftel does not consider that regulatory action is appropriate in this area as all parties agree that it is good practice.
Oftel again encourages PTOs to share trenches where it is of economic and environmental benefit, as this will reduce the capital cost to the parties and reduce the impact on the environment.
Oftel but encourages operators to share on-site ducts and poles where it is of benefit and will promote network competition.
Aylesbury TAC
BAA
Basildon Post Office & TAC
Bell Cable Media
British Approvals Service for Cables (TIA)
BT
Commerce & Industry
Clacton & District, Colchester & District TAC
Colt
Communications Workers Union
Dungannon & District TAC
East Suffolk TAC
Electricity Association
Energis
Federation of Electronics Industry
Gloucester & District TAC
Ionica
Ipswich & District TAC
Kingston Communications
MFS
Mercury Communications
NIACT
North Lancashire & South Cumbria TAC
Norwich & District TAC
NTL
Orange
Peterborough & Huntingdon TAC
Poole, Dorset, Christchurch & District TAC
Preston, Blackpool, Fylde & Southport District TAC
Purbeck & East Dorset TAC
Scarborough & District TAC
Scottish Enterprise Operations
Scottish Telecom
Shropshire TAC
Mr P N Tomlinson
Telecoms User’s Association
Telecommunications Industry Association
Torch Telecom
Truro Area TAC
Worcester TAC
W2-W14 TAC
B1 Whether off-site duct and pole sharing would help to encourage competition?
BT’s view is that off-site duct and pole sharing would discourage infrastructure-based competition and that there is no situation where service competition could not be achieved by other means. In contrast, most of the TACs that responded take the view that off-site duct and pole sharing will encourage competition.
Other operators appear to be split on the issue. One has argued that sharing will lead to economic and environmental efficiency and more easily allow new entrants to offer competing services whilst another supports the idea of sharing but believes that it will be difficult to enforce. Concern was expressed about quality and standards being jeopardised. Another operator believes that sharing will raise insurmountable legal difficulties and that it will make no contribution to network competition. It argues that sharing should be addressed by the application of pragmatic commercial interests as opposed to regulation.
Mercury believes that sharing should be a matter of commercial agreements where mutual benefits are recognized. It has further argued that sharing of infrastructure is incompatible with a policy of infrastructure competition; that the imposition of a requirement to share ducts and poles would entail undesirable interference in the market and that it will deter investment. It is Mercury’s view that operators will be reluctant to build spare capacity which they will be required to make available to others and they will be discouraged from creating new capacity if instead they can share.
Kingston has argued that the notion that there exists vast quantities of spare duct capacity is mistaken. Although it suggests that sharing may produce short-term benefits, in the long-term it would result in a `just enough’ mentality, i.e. operators would avoid installing excess capacity that it would then be required to share at less than commercial rates.
The CCA’s view is that duct sharing does not offer any advantages and that lack of sharing has not so far proved to be a barrier to operators investing in their own networks. Pole sharing may offer benefits but the CCA does not consider that it should be mandatory.
B2 Whether the benefits to competition and the cost savings which could result from sharing would outweigh any extra costs incurred, including the potential risks to the network?
BT has provided a cost study based upon the installation of a typical cable network and estimated the effects of using surplus BT duct bores upon its network costs. It is not clear whether there would be any overall cost benefit derived from duct sharing but the implication appears to be that costs are in excess of benefits.
Of those respondents that believe that costs exceed benefits, half are particularly concerned about risks to the integrity of the network. One operator has argued that costs and benefits need to be considered case by case whilst another view is that a cost benefit analysis is required. Others have commented that a code of practice or careful policing of contractors would be required to deal with issues of safety and working standards.
B3 If off-site sharing was felt to be appropriate, should only BT be required to share or should such an obligation be placed on all PTOs?
BT’s view is that off-site sharing should not be subject to regulation. However, it argues that if it became an obligation then it should fall equally upon all operators. The majority of TACs support the view that all OLOs should be required to share ducts and poles, along with several operators and trade bodies. The Telecommunications Users’ Association believes that sharing by all operators should only be required on public land and that private land owners should not be forced to have different contactors working on their land without prior approval.
Of the operators that disagree, one has maintained the view that sharing should only result from commercial arrangements, another believes that sharing is inappropriate per se, and a third has argued that only dominant operators should be obliged to share whilst others should be free to share when it is to their advantage.
B4 Whether operators should pay for sharing and if so how should payment be made in respect of:
All respondents to this question agreed that payments are due in respect of both new and existing ducts and/or poles but no obvious formula emerged. Various respondents commented that payments should reflect installation and maintenance costs and that there could be rental charges or payments to reflect duct space occupied.
BT’s view is that if sharing went beyond surplus duct space, it would expect to be compensated for the opportunity cost of prematurely exhausted capacity. Another operator suggested that pre-privatisation ducts should only attract a maintenance charge. One respondent suggested that the level of payments for sharing should act as an entry barrier for serious entrants to overcome. Opinions differed as to whether Oftel should have a role in determining payments or not.
B5 Whether limited access across natural or structural obstacles causes serious problems, irrespective of whether sharing is felt to be appropriate more generally?
BT does not view natural or structural obstacles as being a general problem but is willing to consider voluntary and reciprocal arrangements with OLOs to overcome difficulties. However it has argued that BT capacity in current circumstances is limited.
OLOs have made various comments. One operator believes that there are advantages for all parties to share ducts and poles but any agreements would have to allow for an operators future requirements. Another explained that obstacles make network building more time consuming and often results in fewer ducts being laid. Some operators suggested that situations of this kind might be the exception requiring mandated sharing of both ducts and poles. Kingston supported sharing in these circumstances and argued that sponsors of development schemes should be encouraged to provide combined service structures, even where there is no immediate perceived need. Another operator argued that the original installer should be obliged to provide a basic resource to third parties. One respondent argued that should efforts to encourage duct and pole sharing become stalled, the issue of sharing in limited access situations should be taken forward separately.
B6 If BT agreed to put into practice a new policy in respect of duct and pole sharing on-site and customer access sharing, would this meet the concerns raised in respect of these two issues?
BT’s view is that its policy meets concerns in respect of on-site duct and pole sharing. Some operators welcomed BT’s willingness to be more flexible about sharing ducts and poles. One believes BT is going some way to allow fairer access to on-site sharing whilst another has argued that a commercial offering would be preferable to Oftel regulation.
Another respondent expressed concern that despite a liberalised policy, in practice BT may argue that it has insufficient capacity to allow sharing. It also feels that in the absence of sharing, customers may be deterred from changing operator because the option would mean the acceptance of disruption caused by another operator installing its own ducts or poles. It believes that BT should be required to allow for additional capacity.
B7 Does ownership (mainly by BT) of ducts and poles on private land continue to raise issues of concern?
BT wishes to maintain the current position, i.e. its policy is to own all its network infrastructure where possible.
One operator argued that when charged for construction the customer should own the property rights rather than BT. A second operator believes that BT should be required to share on private land and that BT should not be allowed to restrict customers’ choice. Another believes that sharing is a property rights issue and that it is inappropriate for Oftel to be involved.
Concerns voiced by TACs were that sufficient consideration should be given to BT having obtained wayleaves, that there may be a size issue, i.e. shared ducts may not conform to the proposed usage of the site involved, and landowners will not want a multiplicity of ducts and poles on their land. One of the TACs argued that there are no remaining concerns if BT agrees to satisfactory terms for sharing.
B8 Do other PTOs perceive likely benefits from BT’s more flexible approach to on-site sharing?
BT believes that its approach will be welcomed by OLOs.
OLOs commented that it is too early to say but a more flexible approach by BT would be particularly important where a landlord is obstructive; that the Fair Trading Condition will be an essential backup (Condition 18A was incorporated into BT’s licence on 1 October 1996 and took effect on 31 December 1996). The TUA is opposed to a blanket requirement for sharing on private land since it raises issues about owners’ rights to determine who has access to their land.
B9 Is trench sharing with other PTOs and utilities sufficiently established that it does not require further consideration by Oftel?
BT does not believe that trench sharing is an issue for operators. As far as other respondents are concerned, it appears to be an unevenly established practice. However, most operators feel that it should be encouraged. One operator argued that it might allow more widespread expansion by operators from the urban to the semi-urban fringe and to more remote concentrations of the UK population.
Another argued that it is a mistaken assumption that trench sharing always leads to cost savings, e.g. when shared use results in construction being forced into the carriageway, which is more costly and leads to greater traffic disruption. It was also argued that different services have different depth requirements.
BT is currently trialling leasing arrangements under which other operators may make use of surplus BT ducts on customers premises, i.e. the sharing of on-site or lead-in duct bores not needed for network expansion or maintenance in the next five years. BT is not aware of demand for similar arrangements with regard to poles.
BT argues that sharing on public land is unacceptable on the grounds of network integrity, it believes that duct sharing could lead to increased risks of damage, either accidental or malicious, or to unauthorised access involving criminal activities. It argues that its poles are used in such a way that sharing would be difficult, in terms of the positioning of cables, clearance heights and loading limits. Should breaches of network integrity occur BT believes that it would be difficult to establish responsibility. It also has concerns about breaches of safety standards. Regarding the availability of duct space, BT argues that there is little continuity of spare capacity, i.e. space is not universally or evenly distributed in continuous runs.
In planning future network requirements, BT has not planned to accommodate the needs of other PTOs. Even though BT plans greater use of fibre cables, it believes that surplus duct bores will only become available in the longer term. Future access network enhancement is also thought to require the placing of electronics in joint boxes and thereby limiting spare joint box capacity.
BT also reported that it already has sharing arrangements with the electricity supply industry.
One respondent believes that PTOs should be encouraged to build their own competing network infrastructures. If duct sharing takes place it should mean that a PTO has sole use of a duct in a group of multiple ducts, i.e. there should be no sharing of the same bore. PTOs that do share should not be allowed a competitive advantage over those who have laid their own ducts, particularly as sharing offers savings in the time required to set up a network as well as cost. It also argues that the PTO making use of a bore should have full operational control of it. It believes that Oftel should set prices or a price formula for sharing in the case of dominant or former monopoly operators.
One of the mobile operators challenged the view that primary legislation will be required to enable non-cable operators to share ducts and poles. It believes that the owner of a shared site or resource should be empowered to impose standards.
Kingston accepts that there are some advantages in sharing but there should be no obligation imposed upon PTOs to give up capacity earmarked for development of their own networks. It argues that PTOs that agree to share should be allowed to recover construction costs and a reasonable return on their capital investment.
Another operator favours duct sharing only in special circumstances where constraints exist upon installing new ducts and considers that substantial regulatory involvement would be necessary.
Several TACs are critical of what they believe to be the uncontrolled proliferation of mobile radio antennae. This is not an issue addressed by the consultation and Oftel has passed these views on to the Department of the Environment. Several are also eager to see a move to more underground plant in rural areas, i.e. fewer poles.
One respondent believes that Oftel is not giving sufficient consideration to the concerns and aspirations of landlords. It would like to be both the provider and owner of its own pit and duct system.
The CWU is concerned about its members’ safety, particularly regarding shared use of poles since it argues that the increase in the totality of `furniture’ increases the difficulty of climbing and working. The union is involved in testing and validating BT’s access network but this role is not recognized by other PTOs. In turn the union is not confident about the technical and safety integrity of other PTOs. The CWU also argues that sharing undermines security measures to protect plant crucial for national security and the emergency services. In summary the union is opposed to sharing sees no benefits in it for customers.
Scottish Enterprise believes that sharing will allow sector investment to go into product development and customer service measures rather than in civil engineering work.
BT argues that most of the other PTOs that have made representations share its view that there should be no regulatory requirement to share ducts and poles. Instead BT says they argue that sharing should not be precluded and on the basis of voluntary commercial arrangements. It also believes that most respondents agree that BT’s current sharing policy does not represent a barrier to competition.
BT rejects the suggestion that it should be required to share on private land regardless of available capacity. It argues that there is no justification for such a power. If it was required to lease capacity required by its own customers it would then have to replace it.
BT rejects the suggestion that it has built and is continuing to build capacity in excess of its requirements. It also rejects the notion that it would act anti-competitively as regards pole sharing. Pole sharing would not allow it to accommodate all operators in all circumstances.
Responding to the suggestion that BT should be required to allow for additional capacity to be provided on-site, BT does not believe that sharing charges should be kept artificially low to deter infrastructure investment. It argues that this would entail one operator subsidising the activities of another.
Figure 1: Diversion of on-site bores
Figure 2: Diversion of bores where customer premises has no curtilage
D1 The Communications Act 1996 requires that poles, ducts, conduits or rights-of-way controlled by utilities (ie local exchange carriers or any other public utilities, except the railway, which are not Federal Government or State property) are made available to other cable carriers on `just and reasonable’ rates, terms and conditions, regardless of whether the cable system is providing cable television services or telecommunications services.
D2 The Federal Communications Commission (FCC) is authorised to regulate the rates, terms and conditions between the utility and the cable carrier and can adopt procedures necessary to hear and resolve any complaints. Only electricity utilities can deny access, but only where there is insufficient capacity or for reasons of safety, reliability and generally applicable engineering purposes.
D3 Each State Public Utilities Commission (SPUC) has the authority to draw up its own regulations, but it must certify them to the FCC. The carrier/utility has the right to appeal to FCC against any determination made by a SPUC.
D4 The Communications Act 1996 contained several new provisions on pole attachments, and established the following regulatory framework for sharing poles, ducts, conduits or rights of way which are controlled by utilities:
m parties are encouraged to negotiate the rates, terms and conditions for any sharing arrangement. The FCC has to produce new regulations by 1998 to determine the rates for pole attachment where the parties have failed to agree. The Communications Act establishes a new rate formula to be charged to telecommunications carriers for the non-useable space (ie the space below the minimum level which can be used for the attachment of wires, cables and associated equipment) of each pole. The new formula allows the utility to apportion the cost of providing usable space among all the carriers attaching wires or cables to the pole;
