Greater transparency on PIA sharing needed, says Openreach

With the ongoing debate about Openreach’s PIA being unfairly priced, Deputy CEO of Openreach, Katie Milligan has shared why she believes the industry needs to work together to build a network that will benefit both the community and the environment, with greater price transparency for all.

Billions of pounds of investment have flooded into new gigabit-capable networks since PIA was introduced, and more than 170 companies have now signed up to use it, placing orders to use more than 1.3 million poles and over 193,000 kilometres of duct – around 31% of Openreach’s poles and 39% of its duct network, resulting in a million more customers connected to full fibre broadband.

Milligan explained: “Firstly, I don’t know anyone in the industry who reckons PIA hasn’t been a game-changer. Industry regulator Ofcom says it’s been “transformational” and that it’s delivered a “greater-than-expected” level of build. And that’s hard to argue with.

“We’ve developed a product which has become the bedrock for massive infrastructure investment and an explosion in competition.”

But it’s not just Openreach that’s been key to this success.

One of the most popular industry forums the company holds – chaired by the OTA (Office of the Telecoms Adjudicator) – brings all Openreach’s major PIA customers together to review performance, safety, security, new requirements and its development roadmap.

“It’s always a healthy discussion, with lots of ideas and collaboration around how we, as an industry, can make PIA even better.”

And it’s worth noting that the price of PIA is set by Ofcom, not by Openreach.

Milligan expresses her surprise at some recent claims that PIA doesn’t represent good value for money or that Openreach doesn’t charge itself for using its passive network, which she says, “is simply not true”. 

“For a start, it can cut the cost of building fibre networks by around half according to the regulator. And that stands to reason, because using PIA means not spending a ton of money on construction. It means you can launch new services in a fraction of the time it’d take to source and erect your own poles,” she added.

This is reflected in the feedback from customers, who use around a third of the duct and pole network and proves that PIA is one of the company’s most valued products.

But Milligan points out that PIA customers pay just 4% towards the £850 million cost of maintaining the network but use a lot more of it than that.

“The rest of the cost is borne fully by Openreach. So, in terms of value, the prices are probably too low. They’re certainly not sustainable in the longer term.”

Overall, Milligan believes it that sharing costs across the industry is key, but a review of regulations are ultimately needed.

“PIA’s avoided more than three million new poles being erected in rural areas so far. And that’s why we think other companies, like VMO2, should be sharing their ducts and poles on the same transparent terms and prices as we do,” she said.

And while the regulation to share other passive networks exists – the Access to Telecoms Infrastructure (ATI) regulation – “it’s simply not working” according to Milligan, “because unlike our PIA product, there’s no clear and published rate cards and negotiating access on a case-by-case basis is nigh-on impossible. That’s why we’ve asked the Government to look again at the regulation.”

Openreach was created to enable competition, but others doing the same could amplify the greater good even more. The company has focused on developing PIA to support fibre build, but now the industry must also focus on the rules of engagement where competition now exists, or “working together”. 

As Milligan concluded: “The current regulations for network sharing have never worked effectively but, with a rethink and by working together as an industry, we can accelerate the journey to a bright connected future for the UK.”