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Fibre and the changing role of PIA

Ben Allwright, CEO
27.07.2017

With ~80% of a typical CP’s’ CapEx costs attributable to network build, the PIA remedy developed by Ofcom has garnered considerable interest. The ability to lease physical infrastructure from Openreach is seen as a key catalyst for Ultra-Fast fibre network deployment and residential broadband competition.

Flomatik recently completed two planning projects that delivered savings of ~60% in the cost-per-premise, when compared to traditional civil construction methods (the extent of the savings available being highly dependent on local network conditions).

If this was not incentive enough, Ofcom recently published their “Wholesale Local Access Market Review, Consultation on Duct and Pole Access remedies”, which moves things on further, showing a clear commitment to enable ‘mixed use’ PIA.

Mixed use PIA will be very attractive to CP’s, enabling them to offer the broad mix of residential broadband and business-orientated, symmetrical services.

With the economics further improved, we expect this development to stimulate considerable activity for both fixed and wireless providers.

The Ofcom consultation was supported by Flomatik and the full paper can be found here (with sections 1.14 to 1.16 below):

Access to BT’s ducts and poles

1.14: In considering the form of network access obligations generally, our starting point is not to impose any restrictions on use or scope, and in most instances, such restrictions are unnecessary. However, PIA can be used as an upstream input into several downstream products and, in this market review, it would be inappropriate to put in place a PIA remedy for purposes which make no contribution towards remedying the competition concerns in the WLA market.

1.15: The current PIA remedy was designed to address this issue and allows duct and pole access to deploy broadband access networks to support both business and residential customers, but not symmetric-speed point-to-point leased lines (typically used to support the needs of large businesses). However, our provisional view is that this use restriction has undermined the effectiveness of PIA, deterring network investment due to concerns over the ability to adjust technology choices as the market develops and exploit economies of scope in delivering different services over a shared network infrastructure. For example, a fibre network is costly to build, but once deployed has almost limitless capacity. The commercial business case for the initial investment therefore typically relies on using this capacity to generate as many different revenue streams as possible, through a wide range of different services.

1.16: Our provisional view is that it is appropriate to relax the current PIA usage restriction to allow ‘mixed usage’. Our aim is to allow PIA to be used to deploy local access networks offering both broadband and non-broadband services, provided the purpose of the network deployment is primarily the delivery of broadband services to homes and businesses, where the inclusion of non-broadband services enables the investment. This will support the effectiveness of the PIA remedy in the WLA market.

The time is now

Late 2018 should see the conclusion of Ofcom’s efforts. We’re increasingly optimistic about its intent and outcomes.

In the meantime, Flomatik has extensive PIA network planning experience, supported by BTOR accreditation, national survey and planning resources, and innovative, automated software tools.

In just six weeks, we can equip CP’s with the information needed to make fundamental PIA business case decisions and complete the submission of PIA applications to Openreach, helping clients to achieve a valuable market lead on their competitors.

This article was originally published on LinkedIN. Click here to read the comments.