Selley TAR comments draw mixed industry reaction

Openreach CEO Clive Selley has sparked industry debate with an open letter to Ofcom setting out a blueprint for its upcoming Telecoms Access Review (TAR), which will re-set the fibre rules for the next five years.

Particularly contentious was his view that Ofcom and Government should require Virgin Media O2 and others to open their duct and pole networks on the same terms including price as Openreach’s duct and poles product.

These comments drew a strong response from Virgin Media O2 which called the comment divisionary. A spokesperson said:  "Calling for regulatory intervention on others who are building alternative networks is a worrying and diversionary tactic that Openreach has used before with no success.

“The ability to use Virgin Media’s ducts on a commercial basis already exists, but Openreach has significant market power in the UK and a footprint that covers almost all of the country so it is right that it remains appropriately regulated to ensure it cannot use its monopolistic muscle to constrain emerging competition.

"Virgin Media O2 and others are building fibre to increase network choice in the UK and it’s important that Ofcom supports these investments so that truly scaled competition can be realised in future."

Selley also asked Ofcom to reject request for tighter regulation of Openreach, calling these “self-interested calls”.  

He instead advocated for a continuation of the landscape created by the Wholesale Fixed Telecoms Market Review (WFTMR) which took effect on 1st April 2021.

He states: “Fast-forward to today and more than 150 companies are now using our ducts and poles. It is vital that that Ofcom now protects the certainty and stability the WFTMR delivered… it should reject self-interested calls from some parts of the industry to restrict how Openreach competes.”

On one hand, Spring Fibre CEO Gareth Greppellini merits Openreach and its role in allowing competition to flourish. He said: "Providers of FTTP services have much to thank Ofcom and Openreach for, thanks to the use of poles and ducts.

“Clive's comments on how WFTMR is working better than expected for the UK, is exactly why Ofcom's TAR review is both positive from a timing and beneficial for the wider UK PLC, it'll continue the positive momentum.”

Conversely, Gareth Williams, Non-Executive Board Member at Neos Networks and former Gigaclear CEO wrote: “Openreach once again fail to recognise the outrageous benefit of incumbency. Their dominance is equivalent to Microsoft in Business Apps or Google in Search. It needs to be regulated firmly.”

The key point of regulation up for debate in the latest TAR will be the commercial nature of PIA access.

Greppellini noted: “I do wonder whether the TAR will question the commercial basis, of both lease revenues from infrastructure sharing and new capacity, or direct revenue from Openreach products, does in fact mean, the outcome is now more in the favour of Openreach?"

Guy Miller, CEO at MS3, adds his voice stating that this regulation is necessary stating: “As the CEO of Ofcom said in 2020, deploying fibre in the UK must allow a “fair bet” to those investors putting in the billions of pounds which has allowed our country to soar up the global ranking when it comes to fibre deployment.  

“Fair bet doesn’t come just from building networks however, it comes from the revenue associated with adoption of fibre and this is where we are currently lacking as an industry.

“Allowing Openreach to introduce new offers at a lower cost than competitors can sustain may drive adoption in the short term but the price we will all pay for this in the long term is less competition, less innovation, and less choice. 

“Ofcom are so close to having helped create a thriving, competitive fibre marketplace in the UK. It will see its job done if it doubles down on making sure the incumbent does not take unfair advantage of its privileged position and this can only be achieved by tighter control over Openreach, not by relaxing rules at this pivotal moment.”