Consultation supports Openreach plan to future-proof Britain's digital infrastructure

Openreach, Britain’s digital network business, has received support from some of the UK’s largest communication providers (CPs) in regards to building a large-scale Fibre-to-the-Premises (FTTP) network across the country.

There is also an understanding that FTTP would safeguard the UK’s position as a leading digital economy.

Openreach, which builds and maintains the millions of miles of wires and cables that connect Britain’s homes, businesses and devices to the internet, has been consulting its wholesale customers. These communications providers include Sky, TalkTalk, BT and Vodafone, as well as hundreds of others represented by the Federation of Communications Services.

Openreach wants to see if there’s enough demand for a large FTTP network that could deliver gigabit speeds and more reliable broadband services.

The consultation, which ran from July to the end of September, found that there is strong support for Openreach to build a large-scale FTTP network which would provide better, more predictable services and faster, more consistent broadband speeds.

It also highlighted benefits for the British economy and society, such as productivity growth, opportunities for smart cities, and greater application of e-health and e-learning services.

Openreach is now working to demonstrate that its engineers can build FTTP connections at scale in urban and suburban areas for a competitive price. It has been trialing new deployment techniques across the country and drawing on the latest techniques from around the world to bring the costs down.

Like other network investors, Openreach is also seeking a more supportive policy and regulatory environment to build more FTTP in the UK, including a resolution to the application of business rates and to Ofcom’s Wholesale Local Access (WLA) market review.

Openreach will also need to recover the costs of a very large investment in a new, faster and more reliable network in the wholesale prices it charges to CPs.

A large scale FTTP network is likely to benefit a broad set of customers over time, so Openreach believes the costs should be spread across a broad customer base to reflect that. This would help to keep down any wholesale price increases required to support the investment case, whilst CPs and Openreach would benefit from cost savings through the increased reliability of the network.

Openreach estimates that building FTTP connections would cost around £3bn to £6bn, so deciding how that investment can be recovered fairly through wholesale pricing will be critical to making a commercial case work.

Clive Selley, CEO of Openreach, said: “We believe that under the right conditions, we could build FTTP connections to ten million homes and businesses by the mid-2020s. We want to do it, we think it’s the right thing to do for the UK, but it’s clear that we can’t do it alone, so I’m encouraged to hear that our wholesale customers support our vision.

“Having said that, we’re under no illusions about the challenges that lie ahead because we need to build a business case that’s workable and fair for everyone.

“That means we need a regulatory environment that encourages investment, and we need to agree how the costs of such a huge engineering project can be recovered fairly from all those that stand to benefit.

“Of course that’s going to be tough, but we need to get into the detail of that now with our customers, with Ofcom and with Government.

“I believe Openreach has a critical role to play in achieving such an ambitious goal, and the prize for our CP customers, their customers and the UK as a whole could be huge.”

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