CityFibre appeals against Ofcom dark fibre ruling on grounds of competition

CityFibre has announced it will appeal against Ofcom’s 2016 Business Connectivity Market Review on the grounds the new ‘dark fibre’ rules contradict previous efforts to encourage competition in the arena.

Although Ofcom’s recent review has seemingly made efforts to restrict the influence BT has over Openreach, it would appear not to have gone far enough. The review found Openreach still has an incentive to give preferential treatment to BT over competitors, though it could result in Openreach becoming a ring-fenced, wholly-owned subsidiary of BT, with its own purpose and board members, or be spun off as an entirely separate legal entity, with its own shareholders.

“As a major investor in the UK telecom infrastructure market, working to transform digital connectivity across the country, we need to ensure that CityFibre and other fibre optic infrastructure builders can invest against the background of a fair and balanced regulatory regime,” said Mark Collins, Director of Strategy and Public Affairs at CityFibre.

“We believe Ofcom is implementing poor and inconsistent regulation, and we have a duty to robustly contest their decisions and policies in the normal course of business – especially where they conflict with stimulating long-term investment in the critical digital infrastructure which the UK so badly needs.”

Although the statement does not specifically clarify what CityFibre’s objections are, it could be assumed its grievances are linked to the requirement Openreach must open its ducts and poles to allow rival operators can build their own fibre-to-the-premises (FTTP) networks. While this would encourage more competition in the market, CityFibre has been investing in its own fibre-optic infrastructure to provide an alternative to Openreach. Ofcom’s ruling could be seen as a positive one for competition in the industry on the whole, though it would seemingly make life more difficult for CityFibre.

To illustrate its point, CityFibre has also announced mobile internet use on Three’s network in Hull has increased by 380%, which it claims is down to the completion of dark fibre backhaul connections to mobile masts serving EE and Three customers.

Back in April, UK price comparison service uSwitch released findings from a broadband survey which detailed the speeds actually achievable in 42 towns and cities across the UK. Hull was in last place averaging 12.42 Mbps, compared to Middlesbrough which averaged 34.46 Mbps, both between 9 Aug 2015 and 8 Feb 2016. It would appear CityFibre is using this improvement as a justification of an alternative to Openreach.

“Whilst only just completed, this pioneering project is already demonstrating the crucial role fibre has to play in the development of mobile infrastructure,” said Greg Mesch, CEO at CityFibre. “Not only does it improve network performance capabilities and offer long term cost efficiencies, but it also marks the expansion of critically needed diversity in the mobile operators’ supply chains. We anticipate that demand for dark fibre by mobile operators will only continue to increase, and we look forward to supplying it to them.”

CityFibre has a track-record of vocalizing its discrepancies over competition within the industry. Last year, the team submitted a complaint to the Competition and Markets Authority claiming BT’s acquisition of EE would be anti-competitive. The complaint was believed to be surrounding CityFibre’s own deal with MBNL, EE and Three’s network sharing venture, to provide fibre-optic link between mobile masts.