Ofcom tells BT its rivals need better superfast broadband access

Businesses could benefit from improved access to superfast broadband in Britain under proposals from the telecoms regulator to further open up BT's fibre network for rivals to use.

Ofcom said on Friday that BT would need to give rival providers of business broadband the ability to take full control of services using its UK-wide fibre network. 

The proposals would mean that they need to pay less money to BT to use the network under wholesale rates, and could bring the cost to customers down if the savings were passed on.

Ofcom is also proposing more stringent targets for BT to install business broadband lines.

The regulator said the measures were designed to promote competition and innovation in the £2bn market for "leased lines" - dedicated, high-speed data links used by large businesses and mobile and broadband operators to transfer data on their networks. Leased lines also provide vital, high-capacity links for schools, universities, libraries and other public bodies.

Poor broadband provision is a common complaint among businesses, especially smaller companies or those based in rural areas. 

Businesses require ever-better broadband services given the insatiable demand for data by employees using PCs, smartphones and tablets, as well as the increasing need for cloud-based storage and off-site data processing.

Jonathan Oxley, Ofcom competition group director, said: "High-speed, fibre optic leased lines are invisible to most people. But they form a critical building block in the UK's infrastructure that underpins people's personal and working lives.

"Today's proposals should help businesses across the UK who rely on high-speed data lines. We want to see more innovation, faster installations and more competition, by providing operators with the opportunity to deploy the technologies of their choice."

Companies such as Vodafone that rely on BT's infrastructure have had to pay BT extra for the equipment that runs the network. The Ofcom proposal would mean they could use their own electronic kits at either end of the cable.

Ofcom is also concerned that BT Openreach often takes too long to install leased lines, and too often changes the date on which it promises to deliver services.

Openreach is the division that oversees BT's network on behalf of competing providers. Since 2011, the average time between a customer's order and the line being ready has increased from 40 to 46 working days, Ofcom found.

The decision will be welcomed in particular by Vodafone, which has long lobbied to take greater control over the superfast broadband network under so-called "dark fibre" rules. Shares in Vodafone rose 0.3 per cent to 236p on Friday morning while shares in BT were down 0.7 per cent at 462p. Neither company was immediately available for comment.

BT is already required to offer wholesale leased line products, which bundle the fibre optic cable and BT's own network equipment, at regulated prices to competitors. But Ofcom said the proposals should increase the opportunity for competitors to create tailored, high-capacity data links at cost-effective prices for their customers.

The requirement on BT to make dark fibre available would apply in all parts of the UK except central London, including the City of London and Docklands, where Ofcom found there was sufficient competition in the market.

Ofcom is also proposing to deregulate some areas of the leased lines market, including lifting supply and pricing requirements on all but the oldest services in central London where competition is sufficient to make this unnecessary.

Ofcom expects to publish its final decisions in the first quarter of 2016, taking effect in April 2016, following a period of consultation. As part of the dark fibre proposals, Ofcom would require BT to publish a draft "reference offer" for industry, containing wholesale pricing and terms for access, in 2016.

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