Ofcom just told BT to up its game on fibre investment

But is it just more regulatory posturing?

By Kat Hall

Posted in Policy, 4th December 2017 11:20 GMT

Comment The chief exec of Ofcom, Sharon White, has told BT it must up its game to improve Blighty’s piss-poor fibre broadband penetration. While that might sound like tough talk, it’s also only words.

In a recent speech at the former state monopoly’s rival Virgin Media HQ, White outlined the fact the UK still only has around 3 per cent of full-fibre penetration. "While most of us rely on decades-old copper connections, seven in 10 people in Spain and Portugal can access full-fibre broadband,” she said.

"To catch up, we need still bolder commitments. And the biggest player remains BT. We welcome Openreach’s commitment to reach two million homes with full fibre by 2020.

"The company has also outlined plans to reach 10 million by the mid-2020s, but dependent on up to £7 a month being added to broadband bills. We expect BT to go further, and make a reality of the ambition it has set itself to be - and I quote – "a national champion with the scale and expertise to meet Britain's future communications needs".

She added: "We recognise, of course, the competing priorities that any major operator faces – be it investing in sports or other content rights, dividends, pensions or its broadband infrastructure.

"But the national priority is clear."

White is correct. As many observers have noted, BT has historically been more interested in sweating its copper assets than in investing in fibre. And because it has been in a monopoly position for so long, it has had little incentive to do otherwise. Although, as she noted, Openreach has increased its Fibre-to-the-Premises commitments, in consultation plans that are currently underway.

She said: "BT has the financial and technical wherewithal to transform its digital infrastructure for the modern era. The question for BT is – does it lead the transformation today as the self-proclaimed national champion? Or does it follow, playing catch-up on its nimbler rivals?

An Openreach spokesman said the organisation had invested “more than any business — £11bn over the last decade — to upgrade Britain’s digital infrastructure.” He added that investing in a major FTTP network needs commitment from the whole industry "and we’re engaging with Ofcom and Government to build an environment that both encourages and facilitates investment.”

The point is BT is moving exactly as fast as one would expect it to.

Let’s not forgot this is the company that has said it will take four years to TipEx off the name BT from its Openreach vans, following the decision to legally separate the two companies. In fact, digital minister Matt Hancock has criticised the slow progress of the Openreach in becoming a legal entity, something that has largely been held by the pension guarantee arrangement of 30,000 of its engineers.

BT is a massive, hugely bureaucratic organisation, with its own priorities and shareholder interests. Which is exactly why some folk had wanted the regulator to go further and formally separate Openreach, meaning the infrastructure division would own the assets and wouldn’t have to go cap in hand to the BT Group for budgetary sign off.

It’s all very well for White to criticise its progress, but words don’t lay cables. However, as she also points out greater "competitive pressure" might. But just how successful Ofcom's plans to get BT to open up its infrastructure to other providers, via duct and pole access and dark fibre remains to be seen. ®

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