BT loses battle to get at Virgin's ducts

3 August 2011, 15:24   By Neil Hawkins

VIRGIN Media will not be forced to open up their underground pipes and ducts to other broadband providers, Ofcom announced today.

bt openreach
Credit: Ceri Breeze/

The regulator's decision comes despite a ruling made earlier in the year that BT must allow broadband providers access to its ducts and telegraph poles in order to boost competition in the UK market.

BT Openreach argued that other large networks - Virgin Media's former NTL network in particular - should be opened up on the same principle.

Earlier in the year a BT spokesperson said, "BT already provides numerous ways in which third parties can access our network and we have committed ourselves to providing yet more forms of access.

"It is highly ironic that we are being criticised by some companies who provide little or no wholesale access to their assets."

It's that point of principle that Ofcom has rejected today.

Point of contention

The requirement for BT to open up its broadband infrastructure was made because of the dominant position it holds in the market, particularly in rural areas.

The regulator's aim was to introduce a system whereby competition was increased, benefiting broadband users.

A typically 'hands off approach' statement from Ofcom issued to broadband news site Ispreview clarified why Virgin Media doesn't have to share its broadband pipes, yet BT does.

"Where operators have a position of Significant Market Power (SMP), Ofcom can require them to share their networks. When we last assessed the market, we used these powers to require BT to share its ducts and poles on a wholesale basis with other providers.

"We did not find Virgin Media to have SMP."

Although Virgin Media might be a little unhappy with Ofcom's characterisation of it not having 'significant market power' it will no doubt be joyous that it does not have to reciprocate and allow BT to put fibre in its cable broadband infrastructure.

However, there's more behind this decision.

Under the EU Communications Framework which came into force in the UK just a few months ago, it's not necessary for a provider to have SMP for the regulator to get involved with how they use their network infrastructure.

Yet Ofcom still declined to intervene, preferring to step back and continue to stick to the spirit of the older rules.

Being difficult

But, even bearing that in mind, did BT really expect a victory?

You have to wonder whether the company was really expecting Ofcom to change its mind or being difficult after long being ignored on precisely this point as it struggles to balance the books.

As part of the terms for its Physical Infrastructure Access (PIA) product, BT had indicated that it wanted to see any operator signing up to shin up its poles returning the favour and giving access to its own pipes.

In reality, the only other operator with significant infrastructure which BT doesn't have access to is Virgin Media, a company that also happens to be its biggest rival in the UK broadband market.

Some have argued that BT have chosen to respond to that perceived slight by digging in their heels: first going to Ofcom to query the decision and then failing to come up with a reasonable pricing structure for the PIA system which would allow providers to get stuck into the network.

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