Broadband deregulation from Ofcom

In a notice issued this week, Ofcom reached the final conclusion of their broadband market review process. They have found that in 70% of the UK, there is no longer a situation comprising Significant Market Presence for any provider in the wholesale broadband access and backhaul market, leading to the immediate deregulation of those services in the areas concerned.

For many of us in the broadband industry, this signifies that we’re nearing the end of a long and difficult journey. For the past 4 years, representatives from the larger LLU operators have participated in a scheme run by the Office of the Telecoms Adjudicator (OTA) whose brief was to oversee the implementation of robust systems and processes with BT (mostly Openreach) and its LLU customers in order to stimulate and support the LLU marketplace, providing a genuine choice of operator (excluding the ‘last mile’) for wholesalers and consumers in the UK.

This scheme has presided over the complete replacement of Openreach’s order management and orchestration systems for LLU and Wholesale Line Rental (WLR), and supporting the establishment of BT Wholesale’s position as an equivalent to its competitor LLU operators, removing any commercial or technical advantage it had as a subsidiary of BT. New fault management and MIS systems have also been introduced, allowing Openreach to handle the new connection, migration and in-life support for an install base of around 4.5M unbundled lines (April ’08), which is growing steadily at a rate of around 200k/month.

The landscape is unrecognisable from the one we saw in the early days of the OTA scheme. BT had creaky systems, order management processes which invariably involved manual intervention at several stages, their provision of backhaul circuits (which connect an operator’s equipment in the BT exchange back to the operator’s own network) was backlogged, and the rate at which BT could build out racking and power with the exchanges for the other operators to use was way below market demand.

The original OTA, under Peter Black, Clive Fedida and Jim Reilly, presided over months of painful meetings between the operators and BT. Weekly performance reports showed KPIs which were never met, project deadlines missed, operators impatient that their business plans around LLU were being held up by slow performance by BT. The popular view was that this we deliberate gerrymandering by BT – I’m not sure this was actually the case; BT had many hard-working dedicated people working on LLU, but they were frustraated in their efforts to deliver by the inevitable inertia to change within BT’s mammoth operation.

But gradually, things began to improve. A new well-engineered platform was built to handle the order volumes predicted by industry (‘Equivalence Management Platform’ – EMP). The design of the interfaces and processes within EMP was shared with industry over the course of about a year of weekly workshops – quite a departure for BT, who have never in the past involed a customer in their IT development process. A project board, chaired by OTA, oversaw EMP’s development and launch. It wasn’t without its problems at first, but those have been ironed out over time leaving a platform and service wrap that meets industry expectations.

Openreach has also improved its delivery of backhaul circuits and exchange build-outs to within industry KPI targets.

As a result of these improvements, LLU has enabled competition in the marketplace to such an extent that in 70% of the UK, Ofcom finds that no operator has Significant Market Presence – indicating that the playing field is sufficiently level in those areas that no economic or other regulation is required to ensure that the consumer is protected.

The industry as a whole should pat itself firmly on the back. We’ve changed the world in 4 years.