This document discusses several issues related to regulating the telecommunications environment in the UK to promote a competitive full fibre broadband market: 1. Full fibre networks are likely to develop through market forces but Openreach needs a transition plan and framework to support broader FTTP rollout. Ofcom should include reasonable FTTP demand in future reviews. 2. Access to ducts and poles alone has limited use but could help alternative providers if incorporated into agreements between Openreach and partners. Long term asset ownership is still an issue. 3. Ofcom should request BT forecasts for FTTP rollout and include FTTP connection costs in price controls to better support the goal of more widespread full fibre coverage.

1. The BiT Commons
INCA Newcastle Conference – November 16th
Workshop Number 5 – Regulating for a
competitive environment.
Notes in support of possible questions.
Opinions of author only and expressed to
generate debate and increased understanding.
Mike Kiely
Founder
The Bit Commons

2. The BiT Commons
1. Full Fibre – a strategic plan or market
driven
• Market likely to deliver based on demand and opportunity.
• Openreach – needs a support framework through a national transition plan, legacy services
imbedded in law. Ofcom should be able to include ‘reasonable demand’ for FTTP in WLA 2021
review. WLA already assumes copper=fibre in cost recovery terms –(not price).
2. Importance of Duct and Pole access.
• On its own, it is of tactical and niche use, business parks, some BDUK patches (exchanges) at a
stretch.
• DPA would need significant policy support to be used in a OR partnership agreement, e.g. rural
wireless provider with funds being granted unique rights to upgrade exchange using PIA
mimicking BT wholesale offers, competing with existing ‘copper gain fabric.
• Lack of asset ownership prevents long term shareholder value is a problematic issue.

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3. Ofcom –full fibre & K. Bradley intervention
• More full fibre (not Fibre transition) – Ofcom accept or request a BT FTTP forecast and
include FTTP connection costs in 40/10 price control, including a FTTP 40/10 product.
• BT currently ‘only’ capable of 200k FTTP a year, this is in addition to new build (?) which
is a substitute for PSTN new build budget, and in addition to BDUK FTTP which is
significant in showing just far deep FTTP can reach.
• Karen Bradley 40/10 query, - accepting a BT FTTP forecast (in addition to new build
volumes) and modelled in the price control would answer KB’s question. Modelling a
FTTP forecast would be better than accommodating a B-USO cost in the proposed price
control.
• DCMS/BT/Ofcom need to show how BT Capital Deferral of £477m (and rising) is
converted into coverage.

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4. Openreach and alt-nets!
• OR-alt-nets, a series of polygamous shotgun sexless marriages, officiated by Ofcom
supported by required public utterances of happiness, where ones first wife (now
separated-but still married) holds supreme, and who prefers footballers to the engineer
she is married too.
• It is a partnership by virtue of imposed regulation.
• ‘Partnership’ limited by BT control and ownership of assets and defined by regulation not
customer need or opportunity.
• Openreach – nevertheless can be a great place when they are allowed to build the
network they wish to build.
• Openreach separation, (first wife remains first wife) an improvement, scale of
improvement is dependent on size of annual of budget settlement which first wife still
influences and the level of capitalisation of labour dictated within that budget.

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5. 10Mbps B-USO by 2020, first step or diversion?
• Unhelpful Diversion – BT would need to stop BDUK work due to resource constraints, recover
costs while sitting on a Capital Deferral of £477m and another £400m of contracted work yet to
be delivered.
• Nov 9th 2015, B-USO announcement a political whim uninformed by the level of BT Capital
Deferral and underspend within BDUK process.
• Ofcom Dec 2016 modelling ignored BDUK programme of work, Scotland R100, Superfast Wales, or
the £150m promised to NI, at least 12 LA’s programmes with 98-100% coverage.
• Need to exhaust BDUK funding and BT Capital accruals, 4 years of FoD(native FTTP GPON)
aggregation is needed where ‘copper gain kit’ has failed to deliver in rural, include a set BT
contribution (e.g. £700 per FTTP build forecast) in the price control.
• Ofcom WLA definition includes FTTP for cost recovery purposes, so ‘reasonable demand’ clauses
could be notified now and formalised in WLA 2021 thus meeting the B-USO using wholesale ‘fibre
path’ components, capable of supporting a retail ISP service. No need for secondary legislation.

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6. Contestability in rural areas?
• Need to bring intervention to a close, where BT Capital Deferral is not permitted to rest in BT’s
accounts, LA Capital account balance need to be made public and applied to Government objective.
• Need for public visibility of BT capital contribution where 1m of VM premises were overbuilt by BDUK -
~20% of entire programme.
• <500 (agree a number) contiguous properties in white areas should be subject to change control on
existing contracts.
• ‘Victims’ of the shortcomings of copper gain technology should be able to able to aggregate demand
and order Fod (Native FTTP GPON at affordable rates.)
• Contest area more > 500 premises (or pick a number) subject to Expression of Interest by qualified
operator – winner of BDUK/LA contract.
• BDUK operator (Airband, BT, Gigaclear..) has first call on B-USO status based on exchanges covered.
• Spectrum policy – need for rural spectrum with wholesale clauses for B-USO providers, including
spectrum for open femto capability, license fees charged where spectrum is not used.