There has been lots of discussion in recent months about ‘dark fibre’, especially after the publication of Ofcom’s BCMR earlier this year, which set out the regulatory framework for the first time. But what is dark fibre, and what will it mean for business connectivity?
We all know that increased connectivity and bandwidth is vitally important for today’s businesses. A fast, always-on internet connection has long stopped being a nice to have; it’s as crucial as the other utilities of gas, electricity and water. However, keeping up with demand has proven difficult, with Openreach often struggling to provide the higher bandwidth Ethernet connections that are increasingly needed. And we firmly believe that we are all – wholesalers and retail customers – being charged too much for Ethernet provision.
However, dark fibre could deliver a real step change in business connectivity. Today’s Ethernet connections are supplied through active, or ‘lit’, fibre. This is where the infrastructure provider (Openreach) provides both the fibre optic cable and the equipment at each end (at the exchange and at the end user) to ‘light’ it – i.e. make it work.
‘Dark’ fibre on the other hand, allows communications providers to run their own equipment at each end of the cable, meaning all they have to do is lease the line on its own.
It’s unlikely that this will be a product for mainstream business users straightaway. It’s more probable that it will be used mostly for backhaul services, or for very large data users, such as data centres. But even before dark fibre becomes an everyday product there is no doubt that it has the potential to completely disrupt the B2B data market.
Nevertheless, before we all get carried away, we have to remember that this is still very early days and Ofcom’s proposals still need refining before we can enjoy a dark fibre product that delivers real value to businesses. Ofcom’s initial regulated price is significantly higher than the cost price, especially for <1Gbit circuits, which means that it will only be cost-effective for wholesalers to offer a limited choice of 1Gbit and 10Gbit circuits. There are also concerns about the ultimate quality of service that will be provided. Ofcom has declined to impose a ‘must use’ obligation on BT – i.e. BT Wholesale will have no requirement to use the service provided by Openreach – which means that BT Group has little incentive to ensure that the service works well and effectively.
It is likely that there will be significant challenges to the proposals as set out in the BCMR, but we’re still excited about the potential dark fibre offers the industry. If priced at the right levels, and regulated closely, this could overhaul the B2B market in the same way local loop unbundling helped to unleash the consumer data revolution 15 years ago, and mean we are a step closer to delivering the transformative, affordable, always on connectivity Britain’s businesses deserve.
For more information, please contact your Account Manager or send an email