Fibre access for new build premises and Community Broadband Access networks

Guidance document published 02|03|06

Introduction

Background

1.1 It is increasingly common for property developers to wish to build fibre access to new premises from the start in order to provide telecommunications services. A number of such developers have approached Ofcom for guidance on regulatory questions. Underlying these questions are a number of common themes relating to regulation and new build fibre deployments.

1.2 These projects are often undertaken by a wide range of organisations that may not normally be considered as communications service or network providers. Such organisations include private sector development companies, Regional Development Agencies, Urban Regeneration Companies or Local Authorities. Often they are unfamiliar with the workings of the telecoms industry and its regulation. This guidance document seeks to provide information and clarity on current regulation with respect to the common themes identified.

1.3 The majority of issues identified and addressed within this guidance document have been raised from projects looking to deploy fibre to new build premises and housing developments. However, the guidance can be applied to a number of different business models and emerging developments in local access networks. For example, this could include community broadband local access network developments considering fibre deployments. The remainder of this guidance document will refer to new build local access fibre networks, covering both deployments to new build premises and those by community broadband access providers.

1.4 A variety of business approaches are being considered by providers of new build local access fibre networks, ranging from the provision of ducting only with the ability for network providers to lease space within the ducts, to full scale fibre access network and core network deployment and service provision (both wholesale and/or retail). Some proposed approaches include a combination of several options.

1.5 Whilst the purpose of this document is to provide guidance to organisations seeking to deploy new build local access fibre networks, it does not contain any new policy announcements or new explanations of how Ofcom will carry out its functions. Consequently, Ofcom has not carried out a consultation process in relation to this document.

1.6 This document makes reference to Ofcom’s Regulation of Voice over IP (VoIP) Services consultation, which sets out Ofcom’s revised approach for fostering the development of VoIP services to ensure they best meet consumers’ interests and sets out a number of proposals. This document is currently out to consultation and stakeholders should ensure they read the final statement.

Objectives

1.7 One of the regulatory principles that Ofcom established in its recent Strategic Review of Telecoms is to promote a favourable climate for efficient and timely investment, in particular by ensuring a consistent and transparent regulatory approach. The objective of this document is to provide guidance on a number of common issues and questions arising from property developers and other potential investors in fibre local access networks. The guidance aims to allow such investors access to the information about relevant regulation to ensure informed decisions are made on investment in physical infrastructure and new build local access fibre network deployments. It seeks to:

• raise awareness of some issues; and
• provide clarity on the implications of current regulation of fibre access network deployments.

1.8 A number of the items raised and discussed with Ofcom by stakeholders in respect of new build local access fibre network deployment relate to commercial issues. However, the focus of this document is not on commercial aspects, but rather on the implications of existing regulation for new build fibre access networks and community broadband networks.

Scope of the document

1.9 This document’s focus is on investors looking to develop limited scope new fibre local access networks for provision of commercial residential and SME higher bandwidth broadband services. It is not aimed at addressing the issues faced by incumbent communications providers in the upgrade of existing access networks or deployment of new fibre access networks.

1.10 The scope of this document is necessarily limited. A number of the issues that investors in new build local access fibre networks may encounter will be dependent on the business model adopted, technology selected or partners chosen. Ofcom has a duty to take account of the desirability of carrying out its functions in a manner which, so far as practicable, does not favour one form of electronic communications network, electronic communications service or associated facilities. It is not a regulator’s role to advocate specific technology or architecture choices. As a result, the guidance in this document must be relatively high level and generic, applying to all technology options.

1.11 This guidance is not intended to suggest any new regulatory policy relating to new build local access fibre networks. Instead, it seeks only to provide clarity on the relevant existing regulation. As a result, we have not undertaken any regulatory impact assessment for this guidance.

What are new build premises fibre deployments?

1.12 For the purposes of this document, fibre deployments to new build premises are the deployment of local access infrastructure to new build premises at the time of construction by the development company.

1.13 There are a wide range of business models available to new build developers in the deployment and operation of local access infrastructure, with varying levels of investment and involvement of the developer in ongoing operation and maintenance. Organisations are likely to use a combination of business models in order to deliver on their commercial objectives. In summary, the general business models available are:

• Ducting - provision of physical ducting only where a new build developer lays ducting at the time of construction. This ducting is then offered on commercial terms to other network operators;
• Dark fibre - provision of ducting and laying of dark fibre within the ducting. This dark fibre is then offered on commercial terms to other network operators;
• Wholesale services - provision of ducting, laying of fibre, installation of electronics in order to light the fibre and provision of wholesale access services to third party service providers; and
• Retail services - provision of ducting, lit fibre, core network and peering and retail services provided to customers.

1.14 Each of the issues addressed in this document may apply to a greater or lesser degree to developers, network providers or other investors in fibre deployment to new build premises, depending on the business model selected.

1.15 It may be that the new build development company does not own the final communications infrastructure or operate the local access networks under discussion. This is likely to be the case where the new build developer provides ducting only. It is also likely to be the case for some varieties of the other business models, where the development companies may form partnerships with communications service providers, or indeed sell the infrastructure to third party communications providers once it has been installed.

1.16 This guidance document is written on the assumption that new developers of new build local access fibre networks may have a continuing interest in the operation and maintenance of the local access infrastructure deployed.

1.17 Although the guidelines set out the approach Ofcom expects to take, they do not have binding legal effect. In the case where Ofcom investigates a potential contravention of a regulatory obligation, Ofcom will consider each case on its own merits. We will only apply the approach outlined in this document where it is appropriate to do so and in the event that Ofcom decides to depart from the guidelines, we will set out our reasons for doing so.

The full document is available below: