BT Plans to Open Fibre Ducts to Competitors to Boost Broadband Roll-Out—Report

BT is willing to open up its underground broadband cable ducts to rival operators, allowing competitors to lay optical fibre (FTTX) cables without the expense of excavation, according to a report in the Financial Times. The U.K. business daily quotes BT chief executive Ian Livingston as saying the former incumbent would provide open access to its ducts to help extend high-speed broadband coverage across the country.

The announcement comes following a pledge by the Conservative Party last month that they would force BT to open its ducts, to stimulate investment from operators to ensure high-speed broadband networks reach rural as well as urban areas. The United Kingdom will hold a general election in May, and the Conservatives are currently ahead in the polls to take over from the incumbent Labour government.

Outlook and Implications

• BT to Seek Fibre Collaborations? The report quotes CEO Livingston as saying BT has told the U.K. regulator Ofcom that it is willing to provide open access to its FTTX ducts, and it is working with the regulator on how to achieve this, adding that this might help BT and others extend next-generation network (NGN) broadband coverage—but stressed it would expect other operators to follow suit. If BT were to decide to open its ducts to rivals, this would be a significant change of policy, as the operator has previously jealously guarded its infrastructure. This is not least because it expects to gain serious revenue from the sale of wholesale access to its FTTX NGN (see United Kingdom: 3 February 2010: O2 UK Signs Fixed-Mobile Network Consolidation Deal with BT), so will need some assurance from Ofcom that other operators will play fair. However, as competition in the U.K. fixed-line market heats up, BT is showing a willingness to work with the government and its rivals to bring high-speed broadband to the whole country.

• Competition in U.K Fixed-Line Market Threatens Broadband Investment: BT has plans to spend some £1.5 billion (US$2.35 billion) on its FTTX network, which it says will increase download speeds tenfold and should be commercially active in time for the 2012 London Olympic games (see United Kingdom: 22 January 2010: BT Ups Ante in U.K. Broadband Market with "Super Fast" 40-Mbps Offering). However, the reach of this network, especially the super-fast FTTH connections, is limited, and BT's closest rivals BSkyB and Carphone Warehouse's TalkTalk have repeatedly expressed their discontent with aspects of BT's wholesale products, and TalkTalk has said it is considering the case for rolling out its own FTTX network (see United Kingdom: 3 February 2010: Carphone's TalkTalk Ramps Up U.K. Fixed-Line Competition with TV, Mobile Plans). However, former incumbent BT's rivals have been slow to show any intentions to match BT's investment, preferring instead to "piggyback" BT through wholesale access. Chief executive Ian Livingston has repeatedly called for clarity from the government concerning subsidies earmarked for boosting broadband connectivity in the United Kingdom. (see United Kingdom: 8 January 2010: U.K. Government Launches Consultation on US$1.6-bil. Digital Britain Broadband Investment), as the increase in competition and the global economic downturn threatens to stifle NGN investment in the country.