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CityFibre ups the ante with new Openreach competition complaint

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CityFibre is once again on the warpath against Openreach, lodging a new complaint with UK authorities over the incumbent network operator’s wholesale pricing strategy.

Specifically, CityFibre has filed a Competition Act complaint with the Communications and Markets Authority (CMA) and Ofcom against Openreach for its – in its opinion – attempts to squeeze competition out of the wholesale fibre market. The complaint comes a year after the altnet’s first bid to tackle Openreach’s fibre pricing, when it petitioned the Competition Appeal Tribunal (CAT) to force Ofcom to investigate the competitive impact on the market of the Equinox offer.

Having apparently got nowhere with that, it is now upping the ante with this new challenge.

“The complaint details how BT Openreach is undertaking an aggressive strategy to foreclose infrastructure competition in the UK fibre broadband market,” CityFibre explained in a pretty succinct statement. “This strategy exploits the dependency of its wholesale internet service provider customers (ISPs), deterring them from placing orders with alternative fibre providers, even though these providers offer faster, more reliable, and cheaper wholesale services.”

The altnet goes on to explain that the 1998 Competition Act, the one it is turning to in this case, was designed to prevent abusive, monopolistic behaviour. CityFibre asserts that Openreach’s wholesale strategic could cause “irreversible harm” to network competition in the UK market.

The case centres on the aforementioned Equinox pricing plan the incumbent introduced last October. The aim of the plan is to reduce the price of wholesale fibre-to-the-premises (FTTP) products to retail ISPs in exchange for long-term commitments to use the Openreach FTTP network. That’s naturally a tempting prospect for ISPs and the longer-term contracts are great news for Openreach. Rival wholesalers like CityFibre will naturally struggle to compete though, not necessarily because of the lower prices, but because Openreach is using its scale to draw in ISPs and then lock them in.

And as far as CityFibre is concerned, that is not playing by the rules.

“We welcome fair competition, but BT Openreach’s behaviour is straight out of the playbook of a dominant operator using its market power and advantages to maintain its dominance,” said CityFibre Chief Executive Officer Greg Mesch.

“If left unchecked, BT Openreach will strangle competition and threaten the pace of the UK’s full fibre roll out – all at the same time as BT Consumer is imposing broadband price rises on millions of households far above the rate of inflation,” Mesch said, clearly keen not to lose the opportunity to poke the incumbent in a weak spot as the threat of retail price hikes comes under the spotlight in the UK.

“Were this to happen, it would also send a clear signal to investors that this country is not a place where they can safely invest the billions of pounds needed to improve UK infrastructure,” Mesch concluded, throwing in a touch of patriotism for good measure.

Despite last year’s protest against Equinox seemingly having come to nought, there could be a very good reason why CityFibre is trying again now…aside from its existing desire to level the competitive playing field, that is.

Rumour has it that Openreach is about to launch the sequel to Equinix. The telco did not confirm media reports to that end a month or so ago, but its comments on how well-received the price plan has been, alongside its assertion that it has been approached by retailers asking what is coming next, suggest that, well, something is coming.

At this stage we’re calling it Equinox 2. Very creative.

Back in October telecoms.com suggested that “the formal unveiling of Equinox 2 will presumably be closely followed by Complaint to Ofcom 2.”

It’s starting to look like the complaint may have come before the sequel.

 

UPDATE – 09:30 8/12/22: We received the following comment from Clive Selley, CEO of Openreach.

“We’ve not seen the detail of this complaint yet, but we reject any suggestions that Openreach isn’t competing fairly and we’ll defend that position strongly. We take our legal and regulatory obligations extremely seriously and we’re confident that we comply with those obligations to enable fair competition and choice for UK consumers and businesses.

“Meanwhile we’re building further and faster than any company we’re aware of in Europe, so suggestions of a threat to the pace of the UK’s roll out are very wide of the mark. We’re also in constant discussions with service providers – often at their request – about our pricing and ways to accelerate the adoption of full fibre broadband, so we’ll continue to work closely with them to support and upgrade their customers.”

 

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