Openreach War Ends, Now Market Decides

The war over Openreach (functional or structural separation) is over. BT and Ofcom have reached agreement on a long-term regulatory settlement that will see Openreach become a distinct, legally separate company with its own board, within the BT Group.

In a sense, the disagreements have centered less on the “wholesale” approach (that was never in question) but only on the amount of possible favoritism Openreach might show to BT, compared to all the other wholesale customers. The new arrangement loosens, but does not break, the ties between Openreach and BT. Openreach is an independent company within the BT Group.

To the extent that facilities-based fixed network competition exists or expands, it will come from cable TV companies who rely on their own networks, using different technology standards. Longer term, facilities-based competition will come from mobile networks (5G in fixed mode) and possible other platforms. In fact, mobile substitution already seems to be growing.

Beyond that, we still do not know the extent to which other platforms will prove to have scale (power line, balloons, satellites in low-earth orbit, drones, Wi-Fi). As Openreach starts to build more fiber-to-home facilities, it is likely the shares of “fastest” access will change. Up to this point, cable operators have supplied a disproportionate share of such lines.

That has been true in the U.S. market as well, which chose to rely on facilities-based competition rather than wholesale.

source: ISP Review

Fiber-to-home will be important if Openreach has to compete head to head with cable networks, which already have technology to reach gigabit speeds without plant upgrades, and have suppliers working to boost speeds into the 10 Gbps range with plant modifications.

Distance to cabinet (metres)	Estimated downstream connection speed	Estimated upstream connection speed	Cumulative %'age of premises at this distance
100m	100 Mbps	25 Mbps	5%
150m	80 Mbps	20 Mbps	10%
200m	65 Mbps	18 Mbps	20%
300m	45 Mbps	17 Mbps	30%
400m	42 Mbps	16 Mbps	45%
500m	38 Mbps	15 Mbps	60%
600m	35 Mbps	14 Mbps	70%
700m	32 Mbps	11 Mbps	75%
800m	28 Mbps	10 Mbps	80%
900m	2 5 Mbps	9 Mbps	85%
1000m	24 Mbps	8 Mbps	90%
1250m	17 Mbps	5 Mbps	95%
1500m	15 Mbps	4 Mbps	98%

source: Thinkbroadband