Consultation: Business connectivity market review

Published: 2 November 2018
Consultation closes: 18 January 2019
Status: Closed (pending statement)

Ofcom’s Business Connectivity Market Review (BCMR) examines the markets for the provision of leased lines in the UK. Leased lines are high speed, high-quality, point-to-point data connections that telecoms providers use for connecting offices, mobile base stations, and broadband access networks. As such, they are essential to support the provision of mobile, business, and residential broadband services and form the backbone of the UK’s digital infrastructure.

Every three years, Ofcom conducts a review of competition in the markets for the provision of leased lines in the UK. Where we find that a provider has “significant market power” (SMP) in a market (i.e. that they can act independently of competition) we impose regulations designed to address concerns about the impact of that market power on competition.

This document consists of two volumes with supporting annexes:

  • Volume 1 sets out our provisional analysis of business connectivity markets, identifies markets in which we propose to find that a provider has SMP, and sets out what remedies we propose to impose to address such SMP.
  • Volume 2 sets out our proposed detailed design of the price caps, as set out in the remedies sections of Volume 1, which aim to prevent excessive pricing where there is little prospect of competition developing.

The deadline for responses is 18 January 2019. Annexes 1 to 3 set out the process for responding to the consultation. We will take all responses to this consultation into account before reaching our final conclusions, which we expect to publish in spring 2019.

Update 24 May 2019: draft statement published

We have today published a draft statement on our review of the physical infrastructure and business connectivity markets. This has been submitted to the European Commission, which has a month to comment.

We expect to publish our final statement before the end of June 2019.

Further to our update on timing of the BCMR statement, we are pleased that Openreach has made a commitment to continue providing network access and maintain current prices and quality of service from the expiry of existing regulations to our final set of decisions.

Our BCMR consultation closed on 18 January 2019. We received a number of substantive consultation responses. In light of these, we are updating stakeholders on the likely timing of our BCMR statement. In our consultation we said we expect to publish our statement in spring 2019. We now intend to publish our final statement in May.

We anticipate that Openreach will continue to provide network access and maintain current prices and quality of service in the period between 31 March 2019 (the expiry of the current temporary SMP conditions) and the publication of our final statement.

In response to stakeholder queries, we have published a second version of our BCMR consultation, initially published on 2 November 2018, to correct and clarify the inter-exchange dark fibre charge control model and scope of the remedy. We have also made a number of minor corrections and published a list of data centres. We set out our corrections and clarifications below.

We invite stakeholders to consider this information when preparing their responses due by 18 January 2019.

Inter-exchange dark fibre

Increases in certain proposed charge controls for inter-exchange dark fibre:

  • We have identified an error in our modelling arising because of an inconsistency in the base year data used in the dark fibre model (which used an incorrect data set) and the base year data used in the 1 Gbit/s and below model (which used the correct data set). Correcting this error means that several of our proposed charges for inter-exchange dark fibre services have increased, including the proposed maximum charges for connections and rentals. As a result, the following has changed:
    • In Section 1, Table 1.4 and Section 4, Table 4.1, the dark fibre connection charge has changed from £705 to £733 and the dark fibre rental charge has changed from £50 to £51.
    • In Section 4, Table 4.2, the indicative starting charges for element B (other costs not specific to dark fibre) have changed from £572 to £599 for connections and from £41 to £42 for rentals.
    • In Section 4, footnote 63, the indicative starting connection charge for a two-fibre dark fibre circuit has changed from £1,280 to £1,334.
    • In Annex 20, Table A20.5, a number of the proposed maximum charges have changed.
    • In Annex 20, footnote 394, the indicative starting connection charge for a two-fibre dark fibre circuit has changed from £1,280 to £1,334.
    • In Annex 23, Condition 10B.1(i), the Dark One Fibre Access Connection control has changed from £705 to £733.
    • In Annex 23, Condition 10B.1(ii), the Dark Two Fibre Access Connection control has changed from £1,280 to £,1344.
    • In Annex 23, Condition 10B.1(ii), the Dark Fibre Access Annual Rental has changed from £50 to £51.

References for the scope of proposed dark fibre remedy:

  • A number of stakeholders have sought clarification on the scope of the proposed dark fibre remedy as specified in the draft legal instruments (Annex 23). Our proposal, as set out in the consultation, is for the dark fibre remedy to apply along routes from a BT Only exchange to another BT exchange, rather than to another network node. The relevant paragraphs which describe this, which are not changing as part of this update, are as follows:

      “7.41 The objective of our assessment is to identify which connections between BT exchanges are not competitive. To meet this objective, we have considered different possible indicators of SMP.”

      “10.21 We are therefore proposing that the dark fibre remedy will apply only to inter-exchange routes from BT Only exchanges.”

      “12.1 We propose to introduce a requirement for BT to provide access to dark fibre on reasonable request for inter-exchange connectivity circuits from BT Only exchanges.”

      “12.72 We propose introducing dark fibre for inter-exchange connectivity from BT Only exchanges.”

Other corrections

We have corrected errors in the following sections:

  • Volume 1
    • In Section 6, footnote 152 has changed to refer the reader to paragraph 6.41 and to read “…network expansion plans until 2021”, rather than 2023.
    • In Section 6, Table 6.9, the column labelled “HNR Areas outside the CLA” has changed to “HNR in the rest of the UK”.
    • In Section 12, footnote 349 has changed to refer to “competition concerns in backhaul”, rather than “competition concerns relating to the costs associated with core infrastructure.”
  • Annexes
    • In Annex 11, Table A11.2, row (c), the range for Openreach has changed from 1%‑10% to 11%-20%.
    • In Annex 14, Table A.14.6, in the row labelled “Number of VHB customer ends”, the figures for HNR Metro Areas and Other HNR Areas have been swapped, so that HNR Metro Areas is now 49 and Other HNR Areas is 90.
    • In Annex, we have added a note under Table 18.2 to explain that 2016/17 RFS data in the first row include services at 1 Gbit/s and below and services above 1 Gbit/s aggregated together, and so are not strictly comparable to the other rows.
    • In Annex 18, Figure A18.4, the high and low volume forecasts for 100 Mbit/s and below have been updated to include the volume forecasts for 10 Mbit/s services.
    • In Annex 18, paragraph 18.51, the compound annual growth rate has changed from 7.9% to 7.2%.
    • In Annex 23, Condition 10D, Section 3, the reference to Condition 10D.13 has changed to Condition 10D.12.

List of data centres

In response to stakeholder comments, we have published a list of data centres (XLSX, 39.3 KB), including the data centre postcode and name (where publicly available) - any names not publicly available are marked as unknown. The list is to help industry identify the locations where our proposed regulation would not apply and supplements the consultation document. This list has been updated from the list used in the original consultation following corrections and stakeholder responses to information requests.

Inter-exchange dark fibre pricing model (XLSX, 74.2 KB)

Update 14 November 2018

Following a request from Openreach, we have provided it with a copy of the cost model for active services. In the interest of transparency, we will consider all requests to be provided with copies of our models.


Contact information

Riverside House
2A Southwark Bridge Road
London SE1 9HA
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