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FTTx

BT Relaxed on FTTX Unbundling

12:05 PM -- Usually, when regulators announce that incumbent carriers must open up their next-generation fixed-access networks, including their fiber ducts, to competitive operators, all hell breaks loose, with papers thrown in the air, crockery broken, and expletives aired.

But when British telecom watchdog Ofcom announced today that BT Group plc (NYSE: BT; London: BTA) "should be required to offer access to its underground ducts and to its telegraph poles… [to] allow its competitors to roll-out super-fast broadband to areas where BT does not plan to deploy its fibre network and to target specific areas earlier than BT’s roll-out," the British national operator was so laid-back it was almost horizontal. (See Ofcom Unveils FTTX Access Decisions.)

In a comment emailed to Light Reading, the carrier stated: "BT has said many times that it is willing to open its ducts and we have been working with industry for some months on the detailed specification. This formal requirement comes as no surprise as it was part of the original consultation. We agree with Ofcom that there are challenges with such access but we will continue to work with industry to define a suitable product that meets everyone's needs."

That "work" will need to conclude soon, though, as Ofcom says it will "require BT to make available a draft reference offer describing its duct and pole product by mid January 2011."

Somewhat strangely, BT, which has pledged by pump billions of pounds into its fiber-to-the-curb (FTTC) and fiber-to-the-home (FTTH) rollout, adds in its comments: "Duct access is unlikely to be the 'silver bullet' to get fibre to the countryside but all options should be explored." (See BT Preps 'Landmark' FTTC Investment, BT Ramps FTTx Plans, Turns a Profit, and BT Ups Its FTTP Target.)

While "fibre to the countryside" would cover the deployment areas referred to by Ofcom as "where BT does not plan to deploy its fibre network," it doesn't really cover rivals' plans to "target specific areas earlier than BT’s roll-out," which would occur in more urban areas. And while the queue may not be very long, there are other British players ready to invest in fiber. (See i3 Tackles Broadband Not Spots and Fibrecity Plans More UK FTTH

Ofcom also stated that its "decisions will allow competitors to have access to a dedicated virtual link over new fibre lines laid by BT (known as virtual unbundling). This will give other companies control of the lines to provide super-fast broadband services to their own customers." BT is allowed to set prices that enable it to "make a fair rate of return reflecting commercial risk," but the regulator notes that the prices will be "subject to rules to prevent anti-competitive pricing."

BT is at pains to point out that it isn't being forced into this "virtual unbundling" by Ofcom, as it already offers a "Generic Ethernet Access" product to wholesale customers, a move that the regulator recognized in its announcement today.

"This statement is reassuring in that Ofcom agrees that we have been providing suitable unbundled access to our fibre for some months now, that our product provides others with substantial control and that it will be the most likely way that fibre will be delivered in the future. That recognition, combined with us having pricing freedom for that product, provides much of the regulatory clarity and certainty that we have been seeking."

BT says its fiber-based access services (including the FTTC option that still connects the customer with a short copper tail) now pass 2 million premises in the UK. The carrier estimates this will double to 4 million by the end of the year.

— Ray Le Maistre, International Managing Editor, Light Reading

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