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The Independent Networks Co-operative Association (INCA), which represents many of the UK’s alternative broadband networks, has today called on incumbent network operator Openreach (BT) to clarify which homes it’s likely to sacrifice if they carry out their threat to scale-back the deployment of full fibre (FTTP) broadband. The altnets will then know where to target.
The issue centres on last week’s comments from Openreach’s CEO, Clive Selley, who warned both the Government and Ofcom (here) that he was “going to hold fire” on seeking approval for the final phase of the operator’s plan to expand full fibre gigabit broadband beyond their current 25 million premises target for December 2026 (i.e. the goal to expand FTTP up to 30 million premises by 2030); at least until the regulatory and tax environment showed themselves to be favourable.
Selley’s warning was clearly issued with a view to the threat from both rising business rates and Ofcom’s forthcoming market review (i.e. the desire for softer regulation given today’s more competitive environment). However, any reduction in their deployment would naturally hit rural areas the hardest, since those are often the last to benefit from such upgrades.
The CEO of INCA, Paddy Paddison, has now followed Gigaclear’s earlier remarks (here) by calling upon Openreach to be transparent about which homes it claims it cannot invest in so that altnets can carry the can and bring forward their own business cases without fear of overbuild; something that their investors would very much welcome.
Paddy Paddison, Chief Executive of INCA, said:
“Openreach’s problem isn’t regulation – it’s competition. Nearly a million customers a year are choosing Altnets over the tired old network operator because they offer better products, better value, and better service. That’s what a functioning market looks like.
Investors are backing Altnets because they see innovation and delivery, not dependency on regulatory favours. The danger is that Ofcom confuses BT’s investment interests with the UK’s investment interests. The success of the broadband rollout depends on maintaining competition, not cushioning the incumbent.
Openreach’s threats to reduce investment say more about its struggle to compete than about the regulatory framework itself. The best way to serve consumers and investors alike is to protect the diversity of networks that are already driving real progress.
If Openreach cannot compete on a fair playing field for all, the regulator should not be forced to help them out. Last time Openreach refused to invest, it opened the door to Altnet investment, a move that has since delivered more than 16 million full-fibre homes across the UK.”
The response is a useful way for altnets to remind people – as well as the incumbent itself – that this isn’t a completely Openreach dominated market any more and if the incumbent steps back, then they could step in. On the other hand, there are currently only a few altnets with a strong rural focus and many of those have recently had to scale-back their own build plans and cut jobs, due to the pressures from high interest rates, rising build costs and a highly competitive environment (here and here).
Suffice to say that it’s currently unclear how many altnets would have the drive, funding and scale needed to completely fill any big holes that may be left by an Openreach retreat. At the same time, it remains unclear whether Openreach will actually scale-back their infrastructure deployment plans or are merely applying pressure to help focus minds in their desired direction of travel.
INCA added that they would also be writing to both the Government and Ofcom to set out their concerns and to seek assurances that the UK’s regulatory framework will continue to promote investment, competition, and consumer choice.