UK regulator Ofcom introducing a new Openreach Monitoring Unit to track and review BT and Openreach’s compliance with the spirit and letter of the Digital Communications Review settlement.

  • Monitoring unit to keep tabs on Openreach after legally enforceable Undertakings replaced with Commitments.
  • Openreach progress to be measured against consumer outcomes and industry development.
  • Coordinating with other monitoring initiatives.
  • Extending to BT NI Infrastructure Networks.
  • Ofcom expecting to see rising network investment and industry engagement.
  • Concern that Openreach could be punished for CPs reluctance to have skin in infrastructure game.

Ofcom unveiled plans for a new body that will scrutinise and support BT and Openreach’s compliance with the commitments made in the Group’s settlement on Openreach’s future, as part of the Strategic Review of the Digital Communications Market/DCR (BTwatch, #284). The Openreach Monitoring Unit will be responsible for ensuring:

  • Implementation of the new operating model.
  • Compliance with new corporate governance requirements.
  • Genuine Openreach independence, and equal treatment of all communication provider (CP) customers.

The unit’s proactive review of Openreach behaviour will include coordination with other monitoring bodies, such as the Openreach Board Audit, Risk and Compliance Committee, and other Ofcom regulatory initiatives. It will also regularly communicate with industry stakeholders to identify potential issues and challenges as they arise.

While monitoring work will be conducted throughout the year, the unit is to publish annual reports after the first year of the establishment of the legally separate Openreach.

During the first year, it will provide a review every six months to measure the progress of implementation of the new working environment.

  • The new Ofcom unit will also consider how BT is performing in Northern Ireland, where Openreach does not operate, but where its activities and approach are replicated by BT Northern Ireland Infrastructure Networks, which is part of BT Business and Public Sector. The Northern Irish business is expected to meet behaviour and standards of the new Openreach business.

Unit to work collaboratively, carry a structural separation stick

Ofcom suggested that the Openreach Monitoring Unit will be working closely with Openreach, to supervise internal and external communications and facilitate cooperation between Openreach and other stakeholders.

This level of collaboration between the regulator and the access services division is likely to be at its height in the early stages of Openreach’s legal independence, when new working practices are still bedding in.

The Ofcom unit will work to address minor breaches of the behavioural requirements on Openreach, in a relatively informal manner with all parties involved. There will, however, be mechanisms in place to escalate more serious potential breaches to include senior management.

Should a pattern of breaches and non-compliance emerge, the prospect of revisiting structural separation or other measures is still on the cards, according to the regulator.

Three-year timeframe for changes to have consequences

Ofcom has indicated that it expects a clearer picture of the effectiveness of the DCR settlement will come into focus after three years.

The regulator will consider a range of metrics to determine how effective the new Openreach structure is proving to be. The performance indicators will include end-user outcomes, such as:

  • Availability of fibre broadband. This will include fibre-to-the-cabinet, G.fast, and ‘full-fibre’ services.
  • Average speed and quality of broadband received by consumers and businesses.
  • Quality of services from Openreach and its performance against service delivery targets.

The conduct and actions of Openreach in its dealings with the industry, and the perceived impact of this activity, will also be monitored by the new unit.

Ofcom will want to see:

  • Rising network investment. Ofcom will consider what Openreach is doing to foster new relationships around network investment, and look for evidence that new models such as co-investment and risk-sharing are being explored.
  • Customer engagement on major projects. The regulator will consider whether in-depth participation in major strategic programmes is being encouraged among the Openreach CP customer base.
  • Cooperation on product development. Openreach will be expected to respond quickly and effectively to calls for new wholesale products from the industry.

BT wary of responsibility for market transformation

While Ofcom is using greater competition at infrastructure level as an indicator of success for the legal separation of Openreach, BT has expressed concern it could be held accountable for reluctance among CPs to engage with Openreach on new products and services.

In its statement, Ofcom stated it would take into account circumstances where Openreach may have proactively engaged with its customer base, but with no CP choosing to progress with developing a new service.

Ofcom is keen to see the spirit of the settlement honoured as much as the letter of the deal. Openreach is therefore likely to be required to demonstrate it is keeping up efforts to engage with customers – a raised media presence for its Chief Executive Clive Selley and publicity for campaigns such as the full-fibre consultation (see separate reports) are early signs of Openreach playing its part.

Image: © BT.

Table of Contents

3 Executive brief

5 Group

Associations
AGM
6 “Humbled” BT survives AGM relatively unscathed
Ofcom Winter 2017 spectrum auction
Regulatory
7 Ofcom unveils updated 5G auction plans
7 Table 1 Current UK total mobile spectrum holdings
Management update
8 McKinsey overseeing latest BT restructure plan
Pension
8 Lowth pondering BG trick to curb pension crisis
8 Ofcom takes gradual approach to curbing spectrum dominance
8 Regulator warns on slower pace for future auctions
Q1 FY17-18 results
9 Q1: body-slammed again, regrouping
9 All over by Christmas, unless Three opens new front
9 BT rises above hoarding allegations to act for good of the nation…

11 Consumer

Competitors
12 Sky and Virgin Media pull ahead of YouView on targeted ads
12 BT completes rugby takeover
Plusnet
13 BT props up its live offering
13 Rugby on the up as pricy soccer stutters
13 BT’s international hockey rights expanded

15 EE

Restructuring
16 Confirmed: Allera to lead merged Consumer-EE from September
Products and services
16 EE expands Apple Music offer with zero-rating play
16 EE breaks with BT strategy on ensnaring customers in contract extensions
Net neutrality
17 Zero rating in the UK
17 EE and rivals playing in net neutrality grey area
17 Zero-rating to lure users into bigger data bundles
18 No just EE testing the limits…
18 EE to zero-rate BT Sport next?
Networks
19 Allera on planning challenges
Networks
19 EE scores 750Mbps at Wembley; Qualcomm, Sony assist
20 Table 2 You say you want an evolution: picking up speed from Cat-4 through to Cat-16
20 Playing away from Wembley is more difficult
Retail
21 EE to expand retail presence through J Sainsbury link-up
21 EE to mobilise it retail workforce; pop-ups
21 Sainsbury relationship follows earlier Argos links
22 Pimped-up stores to trade on tech razzamatazz
22 Keeping BT at a distance?
Suppliers
22 VoltServer supporting safe electricity for balloon masts

24 Business and Public Sector

Channel
25 BT reboots Business Partner Channel
25 One-stop partner shop
25 Business time
Products and services
Health sector
26 BT signs new five-year deal with Surrey CCG
26 BT’s health services unit reinvigorated by injection of new blood
Products and services
27 BT trumpets air power

28 Global Services

BT Italia
Legal and regulatory
Security
29 BT goes on security offensive
Security
30 RedShield added to BT’s security portfolio
30 Good neighbours make good (cyber) fences
30 White paper sets out blueprint for corporate response to cyber threats
30 Virtually secure

32 Openreach

DCR
33 Ofcom launches new Openreach compliance squad
33 Unit to work collaboratively, carry a structural separation stick
Management update
34 Openreach calls for inputs on FTTP future
34 Three-year timeframe for changes to have consequences
34 BT wary of responsibility for market transformation
Management update
36 Progress being made on conditions for new Commitments to come into force
Management update
36 New look Openreach to reflect new world order
Trials and pilots
37 Openreach updates at ISP Forum event
37 Selley goes on media charm offensive
Trials and pilots
38 G.INP trials on ECI cabinets to resume
38 Selley asserts independence with challenge to established thinking
38 Selley on the BT pension
G.fast
39 New G.fast council certifies first products
39 BT partners – and some new names — secure certification
Trials and pilots
Regulatory
40 Ofcom’s dark fibre access derailed
40 Table 3 G.fast-certified customer premises equipment and distribution point units
Regulatory
41 Poacher-in-chief: Ofwat’s Ross to replace Ofcom’s Williams
41 NetComm Wireless linked with BT FTTdp work
41 Fight the power

43 Further reading

46 Index

Index

Symbols

21st Century Fox
Sky
– Sky Sports 12, 13
– – A
Adobe Systems, Inc. 6
ADTRAN 41
Apple 7, 16, 17, 22
Apple Music 16, 17
– iPhone 7
– Arbor Networks 30
Aviva 12, 13

B

BG Group 8
Body of European Regulators for Electronic Communication (BEREC) 17
Broadband Forum 39, 40, 45
Gfast Council 39, 40, 45
– Broadcom 40
BT Group 6, 8, 29, 36, 38, 39, 40
BT Business & Public Sector 8, 25, 26, 27, 33
– BT Local Business 25
– – BT Northern Ireland 33
– – BT Consumer 8, 12, 13, 18, 22
– BT Commitment 36
– – BT Infinity 27
– – BT TV 12, 18
– – Plusnet 13, 40
– – BT Global Services 8, 28, 29
– BT Americas 30
– – BT Italia 6, 29
– – BT Security 29, 30
– – BT Pension Scheme 36
– Crown Guarantee 36
– – BT Technology, Service and Operations 8
– Business and Public Sector
– BT Air Logistics 27
– – Directors
– Rake, Sir Michael 6
– – Rose, Nick 6
– – EE 7, 8, 9, 15, 16, 17, 18, 19, 21, 22, 25
– Executives
– Allera, Marc 8, 9, 19
– – Brandt, Etienne 21
– – Foster, Kevin 39
– – Hall, Jason 26
– – Hughes, Mark 29
– – Lowth, Simon 8
– – O’Neill, Colm 27
– – Patterson, Gavin 6
– – Rathborne, Steve 25
– – Selley, Clive 34, 37, 38
– – Openreach 6, 32, 33, 34, 36, 37, 38, 40, 41
– C
Cabinet Office (UK)
Public Sector Network 26
– Calix 40
Cisco Systems, Inc. 6, 30
CK Hutchison 7, 9
Three Group
– Three UK 7, 9, 17
– – Cloud Industry Forum 6

D

Deezer 17
Dell 6
Deloitte 6
Deutsche Telekom 29, 30
T-Systems 6
– Digital Economy Act (UK) 36

E

ECI 38
Electronic Communications Code 19
European Professional Club Rugby 12
European Rugby Cup
Heineken Cup 13
– European Union 16, 17
Experian 6

F

Fédération Int. de Football Assoc. (FIFA)
World Cup 13
– Football Association
Premier League 13
– G
General Electric Co. (GE)
NBC Universal
– National Broadcasting Company (NBC) 12
– – Google 22

H

Heineken Holding 13
HM Revenue & Customs 27
HTC 7
Huawei Technologies 30, 37, 38, 40

I

Intel
Intel Security 30
– International Hockey Federation 13

J

Juniper Networks 30

K

KPMG 6, 29, 30

L

Liberty Global 12
Virgin Media 12, 16
– M
Mainline Communications 25
McKinsey & Company 8
Metanoia Communications 40
Microsoft 6
MTV 12

N

National Health Service (NHS, UK) 26
N3 26
– NetComm Wireless 41
Netflix 17
Nokia 40
NTT 29

O

Ofcom 7, 8, 9, 16, 17, 33, 34, 36, 37, 38
Strategic Review of the Telecoms Sector 33
– Orange 30

P

Pace Micro Technology 40
PricewaterhouseCoopers 6, 29
Public Company Accounting Oversight Board 29
Public Sector Network 26

S

Sainsbury, J 21
Argos 21
– Samsung 7, 22
Sckipio 40
SoundCloud 17
Strategic Review of the Digital Communications Market 33
Surrey County Council 26
Swisscom 40
Symantec 30

T

Technicolor 40
Technology
ADSL 13
– Broadband 9, 13, 17, 25, 27, 34, 37, 38, 39, 40, 41, 45
– Ethernet 40
– Fibre 13, 22, 34, 37, 38, 40, 41
– Fibre-to-the-cabinet (FTTC) 40
– – Fibre-to-the-premises (FTTP) 34
– G.fast 34, 39, 40, 41
– IPTV 40
– MPLS 26
– VDSL 37, 41
– VoD 12
– Telefónica 7, 16
O2 UK 9, 16
– TVPlayer 17

V

Viacom 12
Channel 5 12
– VMware 6
Vodafone 7, 9
UK 9
– VoltServer 22, 41

Y

YouView 12

Z

Zscaler 30

About

About BTwatch

Report: #288
Covering: July 2017
Published: July 2017
Next report: September 2017
For more information visit: BTwatch