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ENTIAL VE

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com itself

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Ofcom’s pr

Ofcom’s pr

Ofcom’s pr

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se of refere

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at Ethernet is s

ERSION

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ly restricte

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4

bile operat

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markets and

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have impo

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acity 5

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10.

WD

11.

N CONFIDE

ECUTIVE S

erall

We not

price co

BT and

Genera

current

circuits)

some k

e pricing of

The ch

excessi

constra

allows B

Etherne

a speci

1Gbit/s

basket.

DM

We hav

on WDM

wholesa

enable

within s

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availab

build ag

all usin

ENTIAL VE

SUMMARY

te that Ofco

ontrols fram

KCOM’s re

ally, we are

regime (fo

). However,

key issues s

1Gbit/s Ethe

harge contr

ive pricing

ain the ove

BT flexibility

et sub cap i

ific sub cap

circuits se

ve reservati

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ale service

multiple p

shared phys

each regime

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ERSION

om has conc

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espective S

e supportiv

or example

, notwithsta

still remain.

ernet circuit

ol structure

of 1Gbit/s

rall basket

y to price 1

s set at RP

p, we belie

t at no less

ons in resp

(e.g. OSA

e. In partic

roviders to

sical WDM

e which, we

its own use

networks w

n of availab

5

cluded that

mains an ef

MP.

ve of the a

in respect

anding these

We summa

ts

e fails to p

circuits. W

of BT’s E

1Gbit/s circu

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eve that the

s than the

pect of Ofco

, OSEA) wh

cular regula

o provide s

circuits. Th

understand

e. This crea

with these p

ble capacity

t, with some

ffective and

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t of ECCs,

e adjustmen

arise the ma

protect mob

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Ethernet pro

uits at their

he same wa

ere should

RPI – X lev

om’s propos

hen WDM a

ation of O

services ov

his would be

d, requires

ates a situat

products wo

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s Ofcom pr

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nts, we are

ain ones be

bile operato

broad Ether

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current lev

ay that RBS

be a speci

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sal to not im

affords grea

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er individua

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each CP to

tion where

ould build si

cuits would

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nate remed

roposes to

above 1G

concerned

low.

ors against

rnet basket

o RPI], this

vel because

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overall Ethe

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ater flexibili

products c

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o invest in W

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appear to

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the

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e the

ect to

p for

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ty of

could

ngths

rrent

WDM

ng to

orks,

offer

NON

Pas

12.

WE

13.

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14.

N CONFIDE

increas

architec

econom

such w

regulati

ssive Acces

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or wher

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access

product

necessa

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the WE

st orientation

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requirem

previou

justified

in respe

ENTIAL VE

ing oppor

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mies of sca

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ss

ntinue to be

re not avai

power in th

has expre

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ts and ser

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re concern

ments. We

s BCMR a

d given the

ect of Exces

ERSION

rtunities t

d build st

le can be r

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lieve that p

lable, dark

he Business

essed in re

for examp

rvices. We

arrier to the

m over estim

n.

ed at Ofc

believe th

and that th

history prici

ss Construc

6

to create

rategies e

realised tho

Ofcom pro

passive acce

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s Connectiv

espect of t

ple, the reb

are not c

e introductio

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com’s prop

his is incon

here is cle

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competiti

emerging i

ough sharin

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ess remedie

rd a real op

vity Market.

he potentia

balancing o

convinced

on of passiv

opportunity

posals to

sistent with

ar evidenc

yond inputs

es and vari

ve altern

n mobile,

ng at wavel

eave these

es (duct an

pportunity to

We note th

al implicatio

of the pricin

any such

ve access.

for greater

remove c

h Ofcom’s

e that cos

(see Ofcom

ous dispute

ative netw

particularl

ength level

products o

d pole acce

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e concerns

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issues sh

r competitio

cost orienta

decision in

st orientatio

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work

ly if

l. As

ut of

ess -

BT’s

that

ssive

r BT

hould

on in

ation

n the

on is

sions

).

NON

Ofco

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BT

16.

N CONFIDE

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the star

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enter th

believe

ENTIAL VE

ng

opose som

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nts

concerned

rt of the new

new period n

he new char

protection

ERSION

me adjustm

tions in res

ns and the n

that the ga

w controls w

notwithstan

rge control

should be p

7

ments to O

pect of RBS

need for cla

ap between

will permit B

ding its com

period at a

provided to

Ofcom mod

S and Ethe

arity in a num

the lapse o

BT to increas

mmitments.

higher leve

prevent this

delling (for

rnet) as we

mber of are

of the existin

se prices pr

This would

l than other

s.

example,

ell as identif

eas.

ng controls

rior to the s

d enable BT

rwise. We

the

fying

and

tart

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NON

OFC

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17.

18.

19.

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20.

6 Trabelow(WDBCM7Andabov8“Cogene

N CONFIDE

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s section

In this

and Ge

Genera

econom

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We not

definitio

differen

conclus

connec

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specific

olesale Pro

mbined mar

We no

backha

voice/ d

appears

services

solution

aditional Interw) and Multi

DM) and otherMR] d we note Ofcve 1Gbit/s. ombined markeral, CPs are l

ENTIAL VE

OPOSED M

section, we

eographic m

ally, we ag

mic markets

tive (AI) or

te that Ofc

ons are sim

nces betwee

sion that the

ctivity and th

et market ca

c market for

oduct defin

rkets exist fo

te that Ofc

ul market

data or TI a

s operators

s, noting “T

ns that wo

rface (TI or Tiple Interface r leased line s

fcom has conc

kets exist forlikely to conti

ERSION

MARKET DE

e comment

market defini

gree with O

s exist on

Multiple (M

om explain

milar to thos

en its 2012

ere are sep

hat a specif

an be distin

r MI product

nitions

for wholesal

com consid

(e.g. carryi

and AI serv

s continue

There is no

uld entail

TISBO), Alter

(MI or MISservices (regar

cluded that it

r wholesale anue to purcha

8

EFINITION

on Ofcom’

itions.

Ofcom’s ap

the basis

I)6), bandwi

ns that, with

se identifie

analysis a

perate mark

fic wholesa

guished. W

ts7.

le access a

ders the p

ing leased

vices). As re

to split n

reported us

TI services

rnative InterfaBO)(Wavelenrdless of inter

is a single m

access and base access and

S

’s proposal

pproach to

of interface

idth and ge

h some ex

ed in the 20

nd that of t

kets for regi

ale Multiple

We believe O

nd backhau

possible em

lines, broa

egards the

etworks us

se of circuit

s being run

face (AI or AIngth Multiplerface type) ab

market for WD

backhaul prodd backhaul tog

s in respec

assess w

e type (Tra

eography.

ceptions, it

007/8 Revie

he 2007/8

ional and n

Interface/ H

Ofcom is rig

ul products8

mergence o

adband, mo

latter, Ofco

sed to deli

t emulation

n over Eth

ISBO) (Etherxed Services

bove 1Gbit/s).

DM and other

ducts, particugether.” [§1.1

ct of Whole

whether dis

aditional (A

ts 2012 ma

ew. The m

Review are

national TI t

High Bandw

ht to consid

8

of a conve

obile and f

om notes th

iver TI and

or pseudo-

hernet.” [§4

ernet – 1Gbit/at any bandw

[§4.52 and

r Ethernet ser

ularly becaus17 BCMR]

esale

stinct

I) or

arket

main

e the

trunk

width

der a

rged

fixed

hat it

d AI

-wire

.175

s and width §4.55

rvices

se, in

NON

21.

22.

23.

N CONFIDE

BCMR]

to disti

evidenc

We con

observa

conclud

being ru

We ag

Backha

were al

a separ

howeve

On the

is theor

limited

ENTIAL VE

. But overa

nguish a s

ce of use or

nsider that

ations of CP

des there is

un over Eth

ree with O

aul. The typ

lways “poin

ration could

er enable Ac

Access sid

retically ava

in practice.

ERSION

ll, Ofcom co

separate a

r demand fo

Ofcom’s as

Ps outside o

no reported

ernet,

Ofcom’s con

pes of TDM

t to point” f

d not exist.

ccess and B

de Openrea

ailable from

9

oncludes th

access and

or separate

ssessment

of the mobil

d use of cir

nclusion on

M link purch

from cell to

The move

Backhaul to

ch remain d

use of Virg

hat at this st

d backhaul

access and

here appea

le industry.

cuit emulati

n historic p

hased for m

mobile swi

to Ethernet

o be disaggr

dominant, a

gin Media fi

tage it woul

market (th

d backhaul)

ars to be ba

For examp

ion or pseud

urchasing

mobile back

tching cent

t in the mob

regated.

although so

bre and mic

ld be prema

here is lim

.

ased in par

le, while Of

dowire serv

of Access

khaul previo

tre and so s

bile industry

ome compet

crowave, th

ature

mited

rt on

fcom

vices

and

ously

such

y will

tition

his is

NON

TISB

24.

25.

26.

Who

Ser

27.

9 “MSymmnew]10 Oncomp11WhStati1.17 12 Anbaseincluor co13 Foconn

N CONFIDE

BO, AISBO

As abov

assessm

In respe

we beli

Constru

AI (e.g

Ofcom’s

product

where t

deploye

there a

BCMR)

In respe

is a com

and WD

bandwid

olesale Loc

rvices11

We con

Markets can co

metric Broad] MI Symmetrn the basis ofpetitive condiholesale serviion (RBS) serBCMR]

nd we note th stations and

uded within thore). [§4.195 aor RBS, as Onectivity betw

ENTIAL VE

O and MISBO

ve, general

ment.

ect of Tradit

eve that in

uction Costs

at 100Mbi

s proposals

t is more e

the CP site

ed 21 CN.

are “signific

).

ect of Multip

mbined mar

DM circuits1

dth Etherne

cal Loop Un

nsume both

ontinue to be dband Originaric Broadbandf demand sideitions [§4.101 ices used to prvices still fall

hat Ofcom’s “Rd the core nehe scope of mand §4.196 BCOfcom notes ween RBS sit

ERSION

O markets9

ly we agree

tional Interf

addition to

s (ECC) to

it/s and 1G

s in respect

expensive t

e is within t

We also no

cant barriers

ple Interfac

rket for circ10. We sup

et services i

bundling (L

LLU and R

distinguished

ation (TISBO)d Origination e and supply s

BCMR] provide backhl within the m

RBS backhautwork. Core obile backhauCMR] the “The lowes back to B

10

9

e with Ofco

face (TI) an

o those asp

establish f

Gbit/s) is c

t of ECC la

than EAD

the serving

ote that oth

rs to switch

ce (MI), we

cuits above

pport the co

is required.

LLU) and Ra

RBS wholes

d according to), AI Symmet(MISBO);” [§side constrain

haul for Locamarkets for wh

ul” refers to thnetwork conn

ul for market d

wer bandwidthBSC/RNC and

m’s use of

d Alternativ

ects identif

ibre mean t

constrained

ater in this

–LA, but th

g area of a

her mobile

hing from T

note that O

1Gbit/s (re

onclusion th

adio Base S

ale services

o the interfacetric Broadban§ 1.17 BCMRnts (between E

al Loop Unbuholesale symm

he connectivitynectivity (sucdefinition pur

h 2Mbit/s lind the higher

interface ty

ve Interface

fied by Ofco

that switchi

. We comm

response. A

he latter is

n exchange

operators h

TI to AI pro

Ofcom concl

gardless of

hat the regu

Station Back

s1213.

e of the leasednd Origination]

Ethernet and W

undling (LLU)metric broadb

y over SDH lich as betweenrposes (as this

nks are predobandwidth 15

ype in its ma

(AI) (Ether

om, the Exc

ing from TI

ment furthe

Also, BT’s

s only avail

e whereBT

have noted

oducts” [§

ludes that t

f interface t

ulation of hi

khaul (RBS)

d line producon (AISBO) a

WDM) and si

U) and Radio band originati

inks between n switches) is is more like

ominantly use55Mbit/s link

arket

net):

cess

and

er on

EAD

lable

has

that

4.31

here

type)

gher

)

ts (TI nd [a

imilar

Base on [§

radio is not trunk

ed for ks are

NON

28.

29.

typica “hu14 AtMEAEtheincorbasereliaIEEE“RB15 An16 Inthey 17 PDtechnrespemobthat becoBCMand o

N CONFIDE

We not

(technic

demand

identify

conclud

such th

market

relevan

We hav

i)

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cally used in Mub” site that st §4.222 BCM

AS which usesernet connectirrect. Pseudowd radio base s

able timing toE1588v2 servS” PDH/SDHnd presumably

n the previoususe the same

DH and SDHnical requiremect of Ethernile Ethernet ahaving spoke

ome essentiallMR]. As suchother Ethernet

ENTIAL VE

te that Ofc

cal14, dema

d for mobil

ing separa

ded that the

at mobile b

(depending

t AISBO ma

ve the follow

Technical

would also

Sync E pro

Supply side

Virgin Med

backhaul s

such, this

general Eth

market to s

MNOs’ core nerves a numbe

MR, Ofcom ns ‘Pseudowireions in order wires are usedstation equipmo act as a syvice as part ofH E1 TI producy the relevant s BCMR Ofcowholesale inp

H are internatiments for mobnet, Ofcom noare potentially en to vendorsly standard feh Ofcom conct (AISBO) ser

ERSION

com has co

and/ supply

e or LLU b

ate wholes

e technical

backhaul ca

g on interfa

arket [§4.19

wing comme

assessmen

draw Ofcom

ducts.

e substitutio

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solutions in

suggests

hernet lease

supply Eth

networks and er of base statotes that: “BTe’ technologyto deliver syn

d to emulate Tment. A pseudynchronisationf the product, ct in order to pMISBO mark

om concludedputs (PPCs) [§onal standardbile backhaul otes that in p

different to es “it seems li

features of cacludes that thervices.

11

onsidered w

y substitut

backhaul th

sale mark

, demand/

an be includ

ace type15)

92 BCMR].1

ents on Ofc

nt - We no

m’s attentio

on - Ofcom

ovided, or

addition to

that mobile

ed lines ma

hernet circu

in some casestions”. [§4.21T has deployey. This enablenchronisation

TDM circuits adowire emulatn source. WitBT has to prprovide this syket for high bad that RBS ba§ 4.197 BCMds used for m

(including syprinciple, the enterprise custikely that therrier Etherneere is unlikely

whether the

tion, compe

hat rely on

kets [§4.19

supply and

ded in the re

and LLU b6

com’s asses

ote Ofcom’

on to our co

m notes that

are about t

o their exist

e Ethernet

arket (i.e. ne

uits to mobi

s as high capa6 BCMR]

ed an interim es 2Mbit/s TDn”. To clarify and therefore ted TDM circuth BT MEASovide a separynchronisatioandwidth (aboackhaul to beR]

mobile and fixynchronisationtechnical (syntomers (usinge synchronisaet services ovy to be a distin

ere are par

etitive cond

leased line

90 BCMR]

d competitiv

elevant AIS

ackhaul is

ssment here

s conclusio

omments lat

t some prov

o provide, m

ing Etherne

can be in

ew entrants

le networks

acity links to b

solution in itsDM circuits to

Ofcom’s undprovide suppouit does not p

S, pending thate, or leave in.

ove 1Gbit/s) e in the TISB

ed applicationn) can be metnchronisation)existing Ethetion methods er the next fenction betwee

rticular feat

ditions) of

es that just

]. Ofcom

ve features

SBO and TIS

included in

e:

ons here17

ter in respe

viders (suc

mobile Ethe

et solutions

ncluded in

could ente

s). We sug

backhaul traff

s Ethernet proo be emulatedderstanding, tort to legacy

provide sufficihe provision oin situ an exi

BO market be

ns and the get by TI circui

n) requirementernet solutionss [for mobile]few years” [§4en mobile Eth

tures

the

tifies

has

s are

SBO

n the

but

ect of

h as

ernet

s. As

the

r the

ggest

fic for

oduct d over his is TDM iently of an sting,

cause

eneral its. In ts for s) but ] will 4.223

hernet

NON

18As

N CONFIDE

iii)

iv)

discussed bel

ENTIAL VE

that the fa

Ethernet se

no interven

prevailing s

have histor

mobile op

establish it

operators n

already con

wayleaves.

wayleaves

change. Th

challenged

this absen

market and

access to

services is

effectively a

A combine

there is no

premium fo

operators w

increased

high capac

constraint

Ofcom’s co

Competitive

competitive

to general

(it is not un

single prov

low.

ERSION

act that jus

ervices doe

ntion or reg

situation, p

rically taken

erators me

self in the m

need to re-

nnected by

. Practical

within Tele

his leaves o

due to hig

ce of real

d in the abs

BT’s fibre

key to su

against lice

d RBS/ Eth

ot a comb

or TI circuits

would not s

(SSNIP tes

city is not n

on RBS p

onclusion he

e conditio

e conditions

circuits to s

nique to MN

vider of circu

12

st one alter

es not in its

gulation,

particularly f

n more BT l

eans that

market face

-invest sign

BT, but als

experienc

efónica has

only microwa

gh costs as

alternatives

sence of m

e, then effe

pport the m

nce covera

hernet back

ined marke

s above 2M

switch to RB

st)). And in

needed, Eth

pricing. [§4

ere.

ons – Ofc

s for mobile

substantiate

NOs that the

uits; nor is

rnative sup

elf indicate

We wou

for Telefón

eased line t

any altern

es not only

nificantly m

so the chal

ce of tryin

s proven th

ave as an a

sociated wi

s/ competit

ore radical

ective regu

mobile indus

ge obligatio

khaul marke

et since th

Mbit/s relativ

BS/ TISBO

respect of

hernet is un

.235 and §

com conc

backhaul a

e a separat

ere could be

it unique to

pplier is off

a healthy m

ld also poi

ica ( and V

transmissio

native sup

the challen

ore CapEx

lenge of ob

g to get

ese to be

alternative, a

ith dish righ

tion in the

measures

ulation of B

stry in depl

ons.

et – Ofcom

ere is a s

ve to Ether

services if

f base stati

nlikely to be

§4.236 BC

ludes that

are not suffi

te mobile b

e benefits o

o mobile tha

fering back

market nee

nt out that

Vodafone)

on than the

pplier trying

nge that mo

x to reach s

btaining sec

these sec

real barrier

and this is

hts etc18. G

mobile acc

such as PI

BT’s AI “E

loying LTE

concludes

significant p

rnet (and he

Ethernet pr

ion sites w

e a compet

CMR]. We

t overall,

iciently diffe

ackhaul ma

of supply fro

at there ma

khaul

eding

t the

who

later

g to

obile

sites

cond

cond

rs to

itself

Given

cess

A or

EAD”

cost

that

price

ence

rices

here

titive

note

the

erent

arket

om a

y be

NON

30.

N CONFIDE

v)

We are

be dist

market

custom

particul

specific

ENTIAL VE

“first-mover

unique to m

with BT out

here. Howe

distributed

premises s

mobile ind

outside the

mover adv

§4.250). F

these cable

Self supply

cannot me

cannot act

in the conte

unlikely tha

We wou

be engaged

e not convin

inguished.

we believ

ers are pr

ar, via the

c sub cap on

ERSION

r” advantag

mobile that

tside the ma

ever, we w

nature of c

serviced by

ustry has

e footprint re

vantage/ loc

urther, BT

e accesses.

y – microwa

et MNO’s

as substitu

ext of an inc

at an MNO

uld urge Of

d here to ad

nced that a

However,

ve that it

otected in

RBS specif

n 1Gbit/s Et

13

ge in the su

alternative

ain urban a

would add t

cells (as not

y BT’s AI a

invested s

equired by

cations of

has obtain

.

ave links. O

backhaul re

te for mobil

crease in le

would swit

fcom to co

ddress this

market for

in the abs

is essentia

the design

fic cap and

thernet circ

upply of cir

providers c

areas). We

that in addi

ted in the B

and TI prod

significantly

the majorit

base statio

ned and us

Ofcom concl

equirement

le backhaul

eased lines

tch to micro

nsider wha

issue.

r mobile ba

ence of th

al that mo

n of the c

, moreover

uits (discus

rcuits; nor i

cannot com

note Ofcom

tion to the

CMR), com

ducts, over

in BT’s a

ty of other c

ons as deb

ed its own

udes that m

ts in all cas

leased line

charges (S

owave. In o

t regulatory

ckhaul can

e identifica

obile opera

harge cont

, with the in

ssed elsewh

is it particu

mpete effect

m’s assessm

geographi

mpared to o

r the years

access netw

customers

bated §4.24

n wayleaves

microwave

ses and he

es. Furtherm

SSNIP test),

our experie

y response

nnot necess

ation of suc

ators and

trol baskets

ntroduction

here).

ularly

ively

ment

cally

other

s the

work

(first

42 to

s for

links

ence

more

, it is

ence,

can

sarily

ch a

their

s: in

of a

NON

Sep

ban

revi

31.

The

32.

33.

A hi

34.

19 “Tof thregiosigni20 “Tthe mnetwtrafficircu[§6.221“CwholWDM

N CONFIDE

parate mar

ndwidth brea

iew still hold

Genera

ere are sepa

By “trun

whethe

Aggreg

propose

it outwa

We not

BCMR]

adjacen

circuits

definitio

to point

market

technica

igh bandwid

We agr

There are sepahe market we onal trunk mificantly differTrunk or coremajor urban

works is combfic on their neuits) are ofte2BCMR]

Consistent withlesale MI maM equipment a

ENTIAL VE

rkets can

aks we defi

d.”) [§1.17 B

ally, we agre

arate marke

nk” we und

r the curre

ation Node

ed a “comp

ards to a low

te that Ofco

, but that “a

nt TANs (m

on the bas

on criteria.”

t Ethernet

(i.e. acces

al and econ

dth/ Multiple

ree with the

arate marketsdefined a sin

market are verent from those networks arecentres where

bined with othtworks more een used to p

h our provisioarket which inat the end-use

ERSION

be disting

ned for TI a

BCMR]

ee.

ets for regio

derstand O

ent market

s [§6.19 BC

petitive core

wer tier of s

om conclud

a distinction

more simila

sis of variat

[§6.129 BC

circuits suc

ss and bac

nomic limit o

e Interface E

determinat

for regional ngle TI trunk ery similar tse of national e used to trane businesses a

her traffic streefficiently. Byprovide the

onal view in rncludes any seer’s premises,

14

guished acc

and AI whol

onal and nat

Ofcom to m

definition b

CMR] need

e” redefining

maller node

des that the

n can be ma

ar to termin

tions in com

CMR]. We n

ch as EAD

ckhaul) [§6

on them bei

Ethernet ma

tion of a hig

and national k market. We to those of strunk routes.”

nsfer data oveare concentraeams (using my contrast, term

connectivity

relation to theervice faster irrespective o

cording to

lesale servi

tional TI trun

ean “core”2

being a circ

ds to be alte

g the trunk

es) [§6.77 B

e TAN conc

ade between

nating segm

mpetitive co

note that Of

are part o

.138 BCMR

ing used for

arket21

gh bandwidt

TI trunk connnow considersymmetric br” [§1.18 BCMer long distanated”. Data tmultiplexers), minating segmfrom end-us

e retail markethan 1Gbit/s

of bandwidth a

bandwidth

ces in the p

nk connecti

20. And Of

cuit linking

ered (for ex

market bou

BCMR].

cept remain

n regional c

ments) and

onditions an

fcom determ

f the termin

R] – that t

r trunk.

h/ MI marke

nectivity. In our that the charoadband orig

MR] ce national ro

transposed ovwhich allows

ments (such asser sites into

et, we are propand any serv

and interface.

h breaks

previous ma

ivity19.

fcom consi

different T

xample, BT

undary, pus

ns valid [§6

circuits cros

d national t

nd other ma

mines that p

nating segm

there is bo

et.

ur previous rearacteristics ogination, and

routes and betver trunk (or s CPs to trans AISBO or T

o core netwo

oposing to defvice delivered.” [§1.18 BCM

(“the

arket

ders

Trunk

has

shing

.102

ssing

trunk

arket

point

ment

oth a

eview of the d are

tween core)

nsport TISBO orks.”

fine a d with MR]

NON

Who

Sep

35.

Hull

36.

WE

37.

38.

22 “Sdefindefin8Mb

N CONFIDE

olesale Ge

parate geog

We agr

l

We agr

rest of t

ECLA

We no

compet

In our

arrange

emerge

Separate geogrned area of Loned wholesalebit/s) and very

ENTIAL VE

eographic d

graphic mark

ree.

ree with Ofc

the UK. We

ote Ofcom

tition are mo

experience

ements) wh

e. We discus

raphic marketondon (the Wee leased lines p

high bandwid

ERSION

definitions

kets can be

com’s concl

e discuss H

concludes

ore favoura

e, there re

hich limit th

ss these in

ts exist: (i) in estern, Easternproduct markedth (above 155

15

e distinguish

lusion that

Hull in more

s that the

ble in the W

emain certa

he degree

the section

the Hull arean and Centralets other than5Mbit/s) TISB

hed: Hull, W

Hull should

detail elsew

prospects

WECLA than

ain aspects

to which

n on SMP.

a for all wholel London Area

n the low bandBO markets.”

WECLA and

be distingu

where in this

for the d

n outside (fo

s (for exam

effective c

esale leased lina, or ‘WECLAdwidth (up to a[§ 1.19 BCMR

rest of UK2

uished from

s response

developmen

or Ethernet

mple, wayle

competition

nes, and (ii) inA’) for all the and including R]

22

m the

.

nt of

).

eave

can

n a

NON

OFC

This

39.

SMP

40.

41.

Hul

42.

43.

N CONFIDE

COM’S PRO

s section

In this s

and KC

P designat

We agr

Ofcom

Etherne

here, w

We als

compet

regulate

“core”.

part of t

l

We agr

Mobile

the Hu

“interco

ENTIAL VE

OPOSED A

section we c

COM.

tions of BT

ree that BT

concludes

et products

which we dis

so note tha

titive and th

ed). [§10.1

RBS acces

the TI trunk

ree with Ofc

“We propos

alternative

share in ea

wholesale l

is therefore

KCOM’s be

backhaul T

ull area ha

onnect links

ERSION

ASSESSME

comment on

T and KCOM

T and KCOM

that BT do

(MI) in the

scuss below

t Ofcom co

hat BT does

87 BCMR]

ss and back

k market.

com’s identi

se to find th

fixed netwo

ach of the m

level in the

e unlikely t

ehaviour.” [§

TI services c

ave proved

” charged to

16

ENT OF SM

n Ofcom’s p

M - Ofcom’

M have SM

oes not hav

WECLA. A

w.

oncludes th

s not have

. By “trun

khaul being

fication of K

hat KCOM

work infrastru

markets is a

Hull area i

to be a su

§1.34 BCM

connecting

d particula

o BT by KC

MP

proposed S

s approach

MP in the m

ve SMP in

As above w

hat the TI t

SMP in the

nk” we und

g classified

KCOM’s SM

has SMP b

ucture in th

at, or very cl

is very unlik

ufficiently cr

MR]

sites in Hu

rly expens

COM. Microw

MP designa

h and prop

markets iden

respect of

we have som

trunk marke

e market (an

derstand O

as TI term

MP in the Hu

because the

he Hull area

lose to, 100

kely in the r

redible thre

ll to switch

sive due to

wave has b

ations for B

posal

ntified. We

high bandw

me reservat

et is effect

nd hence is

Ofcom to m

minating and

ull area:

ere is almos

a, and KCO

0%. Entry a

review perio

eat to cons

sites outsid

to the cos

been used t

T

note

width

tions

ively

s not

mean

d not

st no

OM’s

t the

od. It

strain

de of

st of

to try

NON

44.

Out

45.

46.

N CONFIDE

and ove

in the U

Whilst s

believe

that eg

circuits

appear

or an is

tside Hull a

In respe

of BT’s

AI and

recogni

AI serv

largely

ENTIAL VE

ercome this

UK have pro

strictly a co

the BCMR

gress the H

within the

to be avail

ssue for reg

and WECLA

ect of low b

SMP in this

“In the cas

propose th

WECLA. W

despite gro

unchanged

circumstan

of this revie

are unlikely

means that

to serve ne

has been m

However,

despite stro

position sin

currently es

MI are o

ises. We ag

vices betwe

a question

ERSION

s but high a

ovided only

omment in

should add

Hull area fo

Hull area.

able and it

ulation.

A

bandwidth A

s area:

se of AI s

at BT has

We conside

owing CP in

d from the 6

ces are not

ew. The cos

y to reduce

t OCPs will

ew custome

more infras

despite ex

ong growth

nce the las

stimate to b

of increasin

gree with O

en up to a

n of volume

17

ancillary/ re

partial mitig

respect of

dress the p

or connectio

Howe

is not clear

AI/ Ethernet

services, sim

SMP in the

er that outs

nvestment,

69% we est

t likely to ch

sts of diggin

e significan

l continue to

ers. In the W

structure inv

xtensive alt

h in demand

st market r

be in the ran

ng importan

Ofcom’s ass

and includin

e and curre

ntal costs a

gation.

remedies,

rice regulat

on to BT, a

ever, compe

r whether th

, we agree

milar to ou

e UK exclud

side the W

BT’s 67%

timate in 20

hange over

ng trenches

tly, and the

o incur high

WECLA our

vestment th

ternative n

d, BT has

review with

nge 45%-50

nce to mo

essment of

ng 1Gbits, a

ent expecta

associated w

we mentio

tion of interc

and not jus

etitive servi

hat is just a

with Ofcom

ur last mark

ding the Hu

WECLA and

share of vo

007. We bel

the forward

s and buildin

e ubiquity o

her average

r analysis sh

han in the r

etwork infr

maintained

a volume

0%.”[§1.26

bile operat

f the split in

and above

ations in the

with microw

on here tha

connect circ

st regulatio

ices do not

a matter of t

m’s identifica

rket review,

ull area and

the Hull a

olume is alm

elieve that th

d-looking pe

ng duct netw

of BT’s netw

e costs than

hows that t

rest of the

rastructure

d its compet

share that

BCMR]

tors as Of

n the marke

1Gbits. Th

e areas of

wave

t we

cuits

on of

t yet

time,

ation

, we

d the

area,

most

hese

eriod

work

work

n BT

there

UK.

and

titive

t we

fcom

et for

his is

use

NON

47.

N CONFIDE

within a

1Gbits)

for serv

access

network

parts of

traffic f

Points o

capacity

alternat

alternat

BT’s DW

In respe

that BT

“W

the

has

vol

exp

per

app

the

hig

com

adv

are

sup

Con

thro

effe

ENTIAL VE

a mobile ne

, Telefónica

vices at 1G

technology

k where BT

f the netwo

from multip

of Concentr

y managed

tives to BT

tives could

WDM produ

ect of high

holds SMP

We are propo

e Hull area

s been grow

umes have

pect that thi

riod. We es

pears to be

e volumes o

gh average

mpetitive en

vantage fro

e delivered

pport effe

nsequently

oughout the

ective comp

ERSION

etwork. In t

a and othe

Gbits (the ne

y above 10

T has SMP.

rk. Here, th

ple sources

ration (e.g.

d bandwidth

T available

be encoura

ucts.

bandwith E

P in this mar

osing that B

and the W

wing very fa

e increased

is rate of gr

stimate tha

highly conc

of the secon

revenue p

ntry in this

m the ubiq

with WDM

ective inte

CPs whic

e entire rou

petition and

18

the low ba

r mobile op

ext and onl

00Mbitbeing

. 10Gbit se

he economi

(cell sites

BT LLUs) f

h services

e. However

aged and in

Ethernet/ MI

rket:

BT has SMP

WECLA. Dem

fast since th

d more tha

rowth will co

at BT’s sha

centrated, w

nd largest

per custom

market may

quity of its n

equipment

erconnectio

ch use thei

ute of such

d gives BT a

ndwidth ma

perators wil

ly available

g 1Gbit/s)

ervices will

es of scale

s) and the

from other

mean that

r, as disc

ncentivised

I, we agree

P in the MI m

mand for se

he last revie

an threefold

ontinue thro

are of volu

with BT sup

provider. W

mer sugges

y be favour

network. Mo

whose tech

on betwee

ir own infra

h a service

a strong adv

arket (up to

l have sign

capacity s

in the acce

feature in t

of providin

increased

providers o

t there are

cussed els

through reg

with Ofcom

market in th

ervices fast

ew. We bel

d since 20

oughout the

mes is 59%

pplying more

Whilst the h

st that the

rable, BT d

ost services

hnology cur

en differe

astructure n

. This limit

vantage.” [§

o and inclu

nificant dem

step in Ethe

ess part of

the aggrega

ng links carr

accessibilit

of fibre and

e, to a deg

sewhere, th

gulation aro

m’s assessm

he UK exclu

ter than 1G

lieve that ci

006/07, and

e coming re

%. The ma

e than six ti

high growth

e prospects

derives a st

s in this ma

rrently does

ent netwo

need to do

ts the exten

§1.28 BCMR

uding

mand

ernet

f the

ation

rying

ty of

high

gree,

hese

ound

ment

uding

Gbit/s

ircuit

d we

view

arket

imes

and

s for

trong

arket

s not

orks.

o so

nt of

R]

NON

WE

48.

49.

Tru

50.

N CONFIDE

CLA

As abo

effective

may ex

These a

nk TI

Noted.

ENTIAL VE

ve, in our e

e competiti

xist in WECL

i. Investm

installat

operato

duct in

investm

backha

alternat

ii. BT ins

Telefón

provide

negotia

negotia

aspects inc

 

ERSION

experience,

on can em

LA:

ment in BT

tion simply

ors have pa

addition to

ment that BT

ul market a

tives; and

ists on us

nica to use

er requires n

ate Waylea

ate upfront to

rease the b

19

, the followi

merge, notw

solutions m

y duplicates

aid BT (thro

o the capita

T derives i

and which

sing its ow

its own. Ac

new Waylea

ves on thi

o allow alte

barriers to sw

ing aspects

withstanding

means that s

s investme

ough Exces

al for equip

ts significa

now make

wn Waylea

ccordingly,

aves. Were

ird party p

ernative prov

witching.

s limit the d

that altern

switching to

nt already

ss Construc

pment. It is

nt presence

es it difficul

ves. BT d

switching to

BT to perm

premises/ la

viders.

degree to w

native provi

o an alterna

made. Mo

ction Costs

s from this

e in the mo

lt to implem

does not a

o an alterna

mit Telefónic

and, we c

which

ders

ative

obile

s) for

very

obile

ment

allow

ative

ca to

could

NON

OFC

This

51.

Ofc

52.

53.

N CONFIDE

COM’S PRO

s section

In this s

respect

i)

ii)

iii)

iv)

com’s overa

Ofcom

As Ofc

continu

provide

service

submiss

ENTIAL VE

OPOSED R

section we c

t of Ofcom’s

not to requ

not to impo

to impose a

to impose a

safeguards

all approac

notes:

“In providin

heavily on

the Hull a

appropriate

which wou

services.”[§

om will rec

e to provide

ed as they w

, choice co

sions

ERSION

REMEDIES

comment on

s proposals

ire Passive

ose a Cost O

a sub-baske

a single Eth

s.

ch

ng their cus

wholesale

area) prov

e SMP rem

uld ensure

§1.35 BCM

cognise, it

e services.

would be in

omponents

20

n Ofcom’s p

:

remedies;

Orientation

et for RBS;

hernet baske

stomers wi

leased line

vide on re

medies in t

that BT an

MR]

is not just

It is also a

n a compet

etc. As Ofc

proposed re

obligation;

and

et and asso

ith services

es services

egulated te

this review,

nd KCOM

about ens

bout ensur

titive marke

com will be

emedies, in

ociated sub-

s, CPs curr

which BT

erms. Havi

, we propo

continue to

uring that B

ring that su

et, including

e aware fro

particular,

-baskets/

rently often

and KCOM

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BT and KC

ch services

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m our prev

in

rely

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dered

tions

such

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Pas

54.

55.

56.

57.

23, ht

N CONFIDE

ssive Reme

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and pol

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that pas

mobile

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opportu

solution

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that MNOs

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com will r

unities for c

ns will brin

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sions: we

unity to add

sed this in d

ders.ofcom.org

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m does not

e we consi

milar benefi

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competition

entry.“ [§1.3

that in resp

dies should

nd transmis

nt view is

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its passive

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s’ concerns

by price c

BCMR]

recognise,

competition

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as per our r

continue

ress BT’s m

etail in our

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t propose pa

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its for consu

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de wholesa

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controls wh

there has

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response to

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58.

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remedie

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ii)

 

iii)

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te Ofcom’s

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be addres

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are not add

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industry an

in respect

models as

Ofcom clar

any analys

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introduced

appreciate

a network

speed up

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cumulative

Ofcom als

remedies c

practice, B

higher ban

charges for

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operating

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noted that

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s assessme

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uding:

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ssed by th

our conce

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f the BCMR

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rify? As it s

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cost is mat

so express

could lead to

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at 100Mbit

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maller” [§ 8

the re-bala

22

ent of the

at §8.43 – §

MNO’s conc

he propose

rns in resp

the propose

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n of costs a

rs. Ofcom

support of

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stands, we

any event,

at passive a

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sk of passiv

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ses concer

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sale Etherne

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t/s, even t

osts of the

8.62 BCMR

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case for

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cerns about

ed price c

ect of the p

ed price con

xpresses co

nd add to t

points to ou

f this. We a

ent in the

are unclea

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access solut

cess oblig

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ement to i

services to

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ancing its ta

ately more

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cern is not

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pricing of 1

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ations. Of

ready propo

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passive acc

tive costs o

he models u

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es market.

has underta

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appropriate

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duplication

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59.

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60.

61.

24 Th

N CONFIDE

 

iv)

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remedy

with NG

st Orientati

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apply c

control”

the spe

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means

propose

impositi

[§5.72 L

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his is contraste

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and that

intervention

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strategic in

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costs. W

determinati

such that a

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cost orienta

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LLCC].

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Ofcom conc

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hat Ofcom

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ion elsewhe

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de in the c

tional cost o

ul, we unde

specific (

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r services w

essive pricin

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23

of rebala

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is not awa

achieve ina

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note that (in

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pricing for t

as such, w

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ervices; su

ervice and

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orientation

ss has been us

any regula

hat BT has

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increase M

with Ofco

relation to

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the services

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sses

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nt to

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62.

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ensure

priced i

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that each

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pport Ofco

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conjunction

conjunction

acknowledg

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operators a

in a way th

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charge con

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(see below

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for most s

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least where

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under way,

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sary.

om’s propos

er, we have

n obligation

acknowledg

n with char

n with cha

ge, a specif

Ofcom ex

a degree of

at a cost or

as an expl

(which Ofco

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till be exces

tation provi

ntrols rely

udgments th

nding charg

w) BT contin

we do note

services [wh

nificantly ab

plained whic

erators will

e Ethernet

the migratio

MNOs are

n of this rev

24

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sal to app

e a number

:

ges [§4.21 L

rge control

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fic RBS con

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transparan

rientation ob

licit obligati

om conside

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ssive.

ides an ong

on Ofcom

hat BT has

ge controls.

nues to hav

Ofcom’s a

hich?] we p

bove curren

ch services

have a con

is not feas

on of mobil

e likely to co

view.” [§10.7

ssociated s

ply specific

of concerns

LLCC] cost

s. Indeed,

ols in pre

ntrol is new

PI controls

ncy in respe

bligation do

ion to ensu

rs means c

C] – charges

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ve the ince

ssessment

proposed t

nt price leve

are above

ntinued reli

sible. Indee

le circuits t

ontinue to re

72 BCMR]

service is n

charge co

s regarding

orientation

they have

evious yea

in this revie

can give B

ect of charge

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ure that ch

charges sho

s may be t

cit requirem

ment of cos

on a cost o

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that “the D

to include i

els.” [§6.113

this level.

ance on RB

ed, Ofcom r

to AI servic

equire TI RB

not excess

ontrols to

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can be use

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63.

64.

N CONFIDE

v)

vi)

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with Art

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determined

in conjunct

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orientation

cost orient

association

sub basket

that the com

review peri

Ofcom con

other things

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§10.13 BCM

te Ofcom in

ticle 13 of t

ective make

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its prices,

including a

operator co

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ERSION

nding that a

d in the prev

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concludes

is no longe

tation requi

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mpetitive co

od compare

ntinues to c

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MR].

ndicates th

the Access

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operator ha

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retrograde s

25

an overall b

vious BCM

ese (albeit n

that the cu

er necessa

irement wa

ime which i

now – partic

onditions ar

ed to 2007/

conclude th

excessivly h

competition

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s Directive [

t:

as an obliga

n of proof t

le rate of re

step to remo

basket and

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not a specif

urrent cirum

ry. Howeve

as deemed

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cularly, giv

re not mate

8.

at BT has

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in downstr

oval of cos

[§2.24 LLC

ation regard

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ientation wa

fic RBS bas

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overall bas

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vestment sh

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as still requ

sket). We

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not clear w

te in 2007/

sket and ce

com recogn

ent for the 2

ve to, amo

adversely a

ets [§10.12

on is consis

er, Article 1

st orientatio

ived from c

hall lie with

of from BT.

were

uired

note

cost

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rtain

nises

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affect

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on of

costs

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NON

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66.

67.

68.

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69.

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N CONFIDE

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Ofcom

place t

(require

regulate

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compon

basket

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internal

basket

below).

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[§A5.14

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network

accomo

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neering of BTices) to requir

vided without

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l

han the ad

proposes t

today inclu

ements to p

ed with a pr

nderstand

nents, Ofco

along with o

er, because

consumed

cap for RB

pport the es

ere). We n

quirement,

me underly

42 LLCC An

vices

elcome Ofco

k access

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to provide R

s to mobile nere BT provideMR]) manner

derstand this afcom does not

T provisioningre wholesale T“undue” discr

ERSION

dition of a

to maintain

uding the e

provide PPC

rice control

that beca

m proposes

other PPCs

e of the ince

d services,

BS. This ap

stablishmen

ote that, in

since befor

ying costs

nnexes].

om confirm

includes a

d power to

RBS Backhauetwork operates RBS Backhr with suitabpplies to botht consider it prg systems wheTI services to brimination. [§

26

specific RB

n the same

existing PP

C and RBS

[§ 1.46 BC

ause of c

s to include

s and LLU b

entive on B

Ofcom p

pproach is

nt of a sub

respect of

re RBS was

component

mation that

ancillary se

o make us

ul traditional tors in the UKhaul in a non-ble Service Lh terminating aroportionate (

en the TI markbe provided o10.85 BCMR

BS sub cap

e set of SM

PC and R

Backhaul26

MR] .

commonalit

e RBS back

backhaul se

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proposes to

discussed

basket for

f RBS, a sp

s indirectly

ts as PPC

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interface cirK, excluding t-discriminatorLevels (with and regional s(because it woket is decliningon an EoI basiR]

(see below

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BS Backha6) and that

ty of und

khaul servic

rvices.

entrate price

o establish

in detail in

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pecific char

controlled

s (which w

ral requirem

(such as

regulated s

cuits at bandthe Hull area. ry (no undue dcompensationegments [§ 10

ould require mg with migratis but rather th

w) we note

ons that ar

aul directio

charges wi

derlying co

ces within th

e reduction

a specific

the LLCC

see comm

rge control

via their us

were regula

ment to pro

the neces

service [§1

dwidths up to [§ 10.68 BCdiscriminationn for below 0.200 BCMR]

major re-ion to Etherne

hey should be

that

re in

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osts/

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sub-

(see

ments

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se of

ated)

ovide

ssary

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]

et

NON

70.

71.

Eth

72.

73.

74.

27 FoEBD

N CONFIDE

BCMR]

charge

terms,

with ap

the incr

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migratio

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absenc

areas o

custom

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ernet prod

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growing

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discuss

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(exclud

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product

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control, TI

whereas th

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ce of alterna

of the coun

er impact a

mment on t

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te and sup

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ote Ofcom

ing Hull).

pport the re

ts. We note

n services

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t 11.30 to 11.3onnectivity is l

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note that

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hose of Eth

migration si

ward lookin

cognise, fo

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and implicat

the detail o

ous submis

or Ethernet

pport speci

ments on th

proposes

egulation of

e Ofcom’s a

at 1Gbit/s

33, Ofcom disclimited to the

27

Ofcom con

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hernet servi

ignals beca

ng costs” [§5

or mobile th

s not feasib

and/ or res

y, the impli

rease in re

ions for the

of the RBS

ssions and

backhaul p

ific charge

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a seperat

both low (A

assessmen

and below

cusses the 21Crelevant BT c

ncludes tha

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ices will de

ause the inc

5.78 BCMR

here will be

ble (for exa

sultant lengt

ication is th

al terms. T

economics

control be

d as noted

products.

controls o

these cont

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nt that there

and servic

CN/ Orchid arcore (OHP) an

t “Over the

prices will in

crease. Th

crease in c

].

e circumsta

ample, beca

th of EAD

hat the bac

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s of rural co

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in the BC

on Ethernet

rols in the

for WECLA

h (MI) band

e continues

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rchitecture andnd ASN nodes

e course of

ncrease in

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ause of lac

circuits). In

ckhaul costs

has an ov

overage.

section on

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dwidth Ethe

s to be a b

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nd that this mes.

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ck of

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have

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tion).

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NON

75.

76.

77.

Pric

78.

79.

N CONFIDE

We ha

orientat

BCMR]

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respect

i)

ii)

iii)

iv)

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WDM E

below.

cing of Eth

Ofcom

equipm

and we

wholesa

control

WDM a

multiple

would

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ve reserva

tion obligati

pport Ofco

t of low ban

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the allocata

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include se

“including a

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regulated p

e Ofcom’s p

Ethernet.

ernet and W

explains tha

ment at end

e do not p

ale product

on BT’s wh

affords grea

e providers/

appear to

ERSION

ations conc

ons on cha

m in seek

dwidth Ethe

agree with O

ation of acco

y explicitly

eparate acc

accomodatio

th circuits th

reach proc

product rath

proposal to

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WDM

at “Whilst m

d-user prem

propose to

s in this ma

holesale sing

ater flexibilit

multi servic

offer incr

28

cerning Ofc

arges that a

king to ach

ernet produ

Ofcom’s pro

omodation

that BT’s

cess and

on”;

hat cross bo

cess reques

her than a co

distinguish

ent on Ofc

most MI ser

mises, WDM

o impose p

arket. Howe

gle-service

ty of whole

ce over the

reasing op

com’s prop

are subject t

hieve greate

cts [§ 1.50]

oposal to e

and power;

wholesale

backhaul s

oundaries, a

sts to deve

ommercial p

h between s

com’s propo

rvices are de

M technolog

price contro

ever, we do

Ethernet pr

sale service

same circu

portunities

osal to rem

to the price

er clarity o

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extend EoI r

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services. W

and

lop new AI

process [§1

single servic

osals in re

elivered by

gy is still e

ols on BT

propose to

roducts”. [§

e. In particu

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to suppor

move the

e control. [§

of regulatio

ple:

requiremen

products m

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I products a

1.51].

ce Ethernet

espect of W

installing W

evolving rap

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o impose a p

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ular, suppo

h, WDM circ

rt the netw

cost

1.47

on in

ts to

must

add

as a

and

WDM

WDM

pidly,

ased

price

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rting

cuits

work

NON

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80.

81.

82.

WE

83.

N CONFIDE

architec

concern

nchronised

We note

i)

ii)

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capable

the rollo

upgrade

addition

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regulato

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to avoid

future a

CLA

Ofcom

inside

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cture and

ned that Ofc

d Ethernet S

e that Ofco

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providers a

local excha

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control bas

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out of LTE

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ory encoura

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ERSION

build strat

com propos

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m conclude

cessary to

ation provid

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y and/ or

ere purcha

han BT itse

mes, we are

rnal volume

5.174, §A5

bleA5.16 sh

were purcha

capacity at

nclusion on

plains:

rnal custom

of total sales

proportion to

s, the propo

cast to grow

LLCC].

onsumption

or example

lesale sale

categorise

ed as “inte

of “interna

has an incen

its. Allowing

e an

anti-

ased

elf.”

e not

es by

.175

hows

ased

this

n the

ers.”

s for

o fall

ortion

w by

n for

, are

es to

d as

rnal”

l” vs

ntive

g for

NON

123

WD

124

Sub

125

BES

126

Anc

127

N CONFIDE

an upw

may be

this is

Openre

Annexe

3. The evi

transpa

DM

4. We not

control.

b cap on inte

5. Noted.

S

6. We not

(EAD a

flexibilit

increas

custom

cillary servic

7. We not

ECCs,

remaini

will be

cap on

the bas

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ward-sloping

e an efficien

accompa

each’s curre

es].

idence upo

arent in the

te that Ofc

We have r

erconnectio

e Ofcom pr

and EBD) s

ty in pricin

es on sin

ers.

ces

te that Ofc

it would b

ng ancillary

included in

each charg

sket) would

ERSION

g bandwidth

nt way to rec

nied by d

ent chargin

n which Ofc

BCMR asse

com does

reservations

on services

roposes tha

should be

g within th

ngle charge

com consid

be dispropo

y services.

the genera

ge (protectin

adequately

39

h gradient

cover fixed

decreasing

ng structure

com relies

essment.

not propos

s in this resp

at both legac

in the sam

hat basket

es, would

ders that, h

ortionate to

Accordingl

al Ethernet

ng increase

y address t

(i.e. higher

and commo

average

re in Table

to substan

se to includ

pect, see be

cy (BES an

me single b

but also,

give adeq

having crea

o apply a

y, whilst re

basket, O

es above th

the remaini

r costs for

on costs, pa

costs, as

e A5.15.” [§

tiate that co

de WDM w

elow.

d WES) Eth

basket. Thu

the genera

quate prote

ated a spec

separate

emaining an

Ofcom intend

he cap for e

ng ancillary

more capa

articularly w

s observed

§A5.179 L

onclusion is

within a ch

hernet and

us allowing

al sub cap

ection to

cific contro

basket for

ncillary serv

ds that the

each eleme

y services.

acity)

when

d in

LCC

s not

arge

new

g BT

p on

BES

ol for

the

vices

sub

nt of

Can

NON

Syn

128

129

The

130

131

30Synservi31As enco32PayFacil

N CONFIDE

Ofcom

Ofcom

nchronised

8. We no

services

confirm

that it w

adjustm

9. We sup

Howeve

BCMR

e Price Con

0. Given t

proposa

i)

ii)

. Ofcom

services

LLU, t

nchE allows ices are likely Ofcom rema

ouraging the uyable by LLUlities to Acces

ENTIAL VE

clarify how

applies to T

d Ethernet s

ote that Of

s30 within th

ms the launc

will consult t

ments. [§6.6

pport Ofcom

er, we are

and LLCC w

ntrols on A

the importa

al to apply s

To require

the same a

under the L

A specific

aspecifc ca

notes that

s: Co-mingl

he latter e

the distributi

y to be used inarks, the availuse of disaggreU operators ss Locate term

ERSION

w (and if so

TI ancillary s

services

fcom consi

he relevant

ch and pric

to propose

65 LLCC].

m’s propose

not clear,

why Ofcom

ccommoda

ance of acc

specific cap

Openreach

as co-mingli

LLU WLR ch

price cap o

ap on Cable

Openreach

ling and Ac

enables C

ion and mon

n the first instalability of accegated servicewho want to

ms

40

o why) its

services?

ders it ne

t Ethernet b

ing of Sync

the this (in

ed decision

having ma

needs to is

ation and P

commodatio

ps on these

h to price le

ing (the latt

harge contr

on the Acc

elink of RPI-

currently p

ccess Locate

Communicat

nitoring of acance by mobilcommodation es.[ §7.47 LLCo convert the

approach

cessary to

basket and

chE, Ofcom

cluding the

to regulate

ade the pr

ssue a furth

Power

on and pow

services:

eased lines

ter being su

rol [§7.48 LL

ess Locate

-0%)32

provides two

e. The form

tions Provi

ccurate netwoe operators foin BT excha

CC] ir Revised A

here differs

include S

that at the

m’s “current

need for a

e Synch Eth

roposal to

er consulta

wer31, we su

accommod

ubject to a s

LCC];

fee of RP

o types of a

mer provided

ders to p

rk timing ovor mobile backnges is an im

Agreement for

s to that w

Synch Ethe

point when

expectatio

any start ch

hernet serv

regulate in

ation?

upport Ofco

dation prod

separate ba

PI-0% (and

accommoda

d exclusivel

put site-spe

ver Ethernet. khaul. mportant enab

r Access Net

which

ernet

n BT

n” is

arge

ices.

the

om’s

ducts

asket

also

ation

y for

ecific

Such

ler in

twork

NON

The

132

133

134

135

136

The

RBS

137

N CONFIDE

commu

the sam

e Price Con

2. Ofcom

new cir

3. We sup

(rather

Ofcom’s

the RPI

4. We also

adjustin

base).

recover

5. Ofcom

the curr

6. We beli

conside

and gen

to remo

e baskets

S

7. We sup

ENTIAL VE

nications e

me price. [§7

ntrols on Ex

notes that

rcuit”. [§7.22

pport Ofcom

than includ

s proposal

I.

o note Ofco

ng the base

We suppor

ry upfront a

also conclu

rent ECC ch

ieve Ofcom

ers Ofcom’s

nerally. Ou

ove cost orie

pport a spec

ERSION

quipment in

7.45 LLCC]

xcess Con

“The level o

2 LLCC].

m’s intent to

de them in

to use the

om’s propos

e year cost

rt steps to

nd via renta

udes that a

harge levels

m’s conclusio

s proposal to

r reservatio

entation obl

cific control

41

n BT’s exch

.

nstruction C

of ECCs is

impose a s

the genera

General Bu

sal to preve

ts to remov

address th

al charges t

starting cha

s. We supp

ons in respe

o remove c

ons remain

ligations.

for RBS.

hanges. Bot

Costs

significant

separate co

al Ethernet

uilding Cost

ent double r

ve capitalise

he double r

too). [§7.11

arge adjust

ort an adjus

ect of ECC’

cost orientat

here in res

th are curre

in relation

ontrol on ea

basket). W

t Index (GB

recovery of

ed ECCs fr

ecovery of

LLCC]

ment is also

stment.

s are instru

tion obligati

spect of Ofc

ently charge

to the cost

ach ECC ch

We also sup

BCI) rather

f ECC costs

rom BT’s a

ECCs (i.e

o justified g

uctive when

ions from E

com’s prop

ed at

of a

arge

pport

than

s (by

asset

. via

given

one

CCs

posal

NON

Ethe

138

139

Pro

in th

140

141

142

BT

143

N CONFIDE

ernet Baske

8. We no

encomp

WECLA

9. We beli

oposed con

he WECLA

0. We note

the WE

mobile

services

cannot

every c

. We no

“potenti

network

own fib

2. As expl

may be

Commitme

3. We are

the star

of the n

enter th

believe

ENTIAL VE

ets

ote Ofcom

passing bo

A) in the sam

ieve a spec

ntrols for lo

A

e Ofcom’s c

ECLA over t

operators

s) [§8.5 LLC

increase c

harge.

ote that Of

ial of prov

ks” [§8.13L

re deploym

lained elsew

e overestima

ents

concerned

rt of the new

new period

he new cha

this must b

ERSION

m proposes

oth low an

me basket.

cific sub cap

ow bandwid

conclusions

time (and t

as well a

CC]. As suc

charges in

fcom consi

viding CPs

LCC] (pres

ents – since

where, we b

ated.

d that the ga

w controls w

notwithstan

arge contro

be guarded

42

s a relat

nd high ba

[§6.111 BC

p for 1Gbit/s

dth (1Gbit/

s that the pr

that Ofcom

as more co

ch Ofcom p

nominal te

ders the s

with great

sumably us

e passive a

believe the

ap between

will permit B

nding its com

ol period a

against.

tively broa

andwidth E

CMR]

s is justified

s and belo

rospects for

expect a c

ompetition

proposes a

erms (RPI-

safeguard

ter incentiv

ing BT leas

access reme

prospects

the lapse o

BT to increa

mmitments

t a higher

ad basket

thernet se

.

w) Etherne

r competitio

considerable

from altern

safeguard

RPI applied

cap at RP

ves to deve

sed lines ra

edies are no

for compet

of the existi

ase prices p

. This wou

level than

for Ethe

rvices (out

et (AI) serv

on are great

e demand

native Ethe

cap so tha

d to each

PI-RPI has

velop their

ather than

ot proposed

tition in WE

ng controls

prior to the

ld enable B

otherwise.

rnet:

tside

vices

ter in

from

ernet

at BT

and

the

own

their

d).

CLA

and

start

BT to

We

NON

Ofc

Gen

144

Volu

145

146

147

Effic

148

N CONFIDE

com’s appro

neral

4. We no

Ofcom’s

we do

discuss

ume forecas

5. We not

volume

expects

2010/11

25% pe

is likely

need fo

services

6. At §A5.

operato

A5.4 a

whethe

Ofcom’s

7. In respe

circuits

ciency assu

8. In calcu

the effi

[§A5.53

ENTIAL VE

oach to Co

ote Ofcom’s

s assessme

not have.

s below.

sts

te that Ofc

of TI serv

s the total n

1 (and a de

er annum) [

y to be a res

or synchron

s) [§A5.26 L

31, Ofcom

ors and that

nd A5.5.

r these Fig

s clarificatio

ect of Ethe

will increas

umptions

ulating the v

ciency gain

3 LLCC]. An

ERSION

ost Modelli

s explanat

ent is base

However,

com has ta

vices and

number of T

cline in tota

§A5.23 LLC

sidual base

isation whic

LLCC].

explains th

t the trend

However,

gures reflec

on here.

rnet, we no

se by more

value of X f

n BT is exp

nd Ofcom a

43

ng

tion of its

ed on acces

we have a

ken into ac

that by the

TI circuits t

al capacity d

CC]. Althou

e remaining

ch cannot c

at it has de

forecasts o

these Figu

ct mobile fo

ote that Ofc

than 140%

for each ch

pected to m

assumes se

costs mod

ss to BT in

a number o

ccount an

e end of t

to decline b

delivered th

gh, Ofcom

on TI serv

currently be

erived its for

of these ope

ures are re

orecasts.

com forecas

relative to 2

arge contro

make over

eperate effic

delling and

nformation c

of observat

anticipated

he charge

by over 70%

rough TI cir

also recogn

ices (e.g. w

e replicated

recasts from

erators is s

dacted. W

We would

sts the num

201/11 [§A5

ol basket, O

the charge

ciency gains

d assumpti

costs etc w

tions which

decline in

control Of

% compare

rcuits at aro

nsies that t

where there

using Ethe

m those of t

shown in Fi

We are unc

be gratefu

mber of Ethe

5.118 LLCC

Ofcom forec

e control pe

s for the TI

ions.

which

h we

n the

fcom

ed to

ound

here

is a

ernet

hree

gure

clear

ul for

ernet

C].

casts

eriod

and

NON

149

150

151

Ass

152

33 Foeffici34 “Afor a

N CONFIDE

Etherne

for TI a

9. We not

charge

declinin

of the r

conside

Etherne

improve

should

1% to 2

0. In respe

5% per

sources

trend a

the grow

. We not

internal

Openre

clear ho

BT sho

set and cost

2. We not

(Wholes

options

historica

or example, Oiency savings

AVEs and CVEa 1% change i

ENTIAL VE

et baskets (

nd Ethernet

te that in re

controls b

ng [§A5.81 L

range, we d

er that notw

et, in a com

e efficiency

at least ref

2% .

ect of Ether

r annum.Gi

s of evidenc

nalysis33, c

wth in Ethe

te Ofcom’s

targets [§

each with a

ow Ofcom m

uld be able

t volume ela

te that Ofc

sale and O

discussed

al analysis)

fcom calculatbetween 2.7%

Es are in essenin volumes” [§

ERSION

(0% to 3%

t.

espect of T

because th

LLCC]. Whi

do not bele

withstanding

mpetitive m

y and so w

flect the low

rnet, we no

ven that 2%

ce identified

coupled with

rnet volume

comment t

6.165 LLCC

n incentive

makes the j

to make ab

asticities (A

com propos

Openreach)

at §A5.106

).

tes that “over % and 4.6%” nce the percen§6.168 LLCC]

44

(BTW) and

TI, the range

e TI servi

ilst, this ass

eive that 0%

g the matu

market there

we believe

w end of th

ote Ofcom a

% is below

d at Table

h the oppor

es, we belie

that this ra

C] but that

to exceed

judgement

bove the ch

VEs/CVEs3

ses to use

via Informa

6 LLCC (e.

the period fro[§A5.89 LLCntage changes]

d 2% to 3%

e is relative

ces are m

sessment m

% should b

urity of the

e would re

the low en

he historica

assumes an

w the bottom

A5.8 [LLCC

rtunities and

eve the lowe

ange is also

t Ofcom co

the model

as to what

arge contro

34)

AVEs and

ation Requ

g. those us

om 2007/08 toCC] s in capital an

% (Openreac

ely low com

mature and

may apply to

e set as th

market an

main incen

nd of the e

l trend ana

n efficiency

m of the ra

C] including

d incentives

er end is too

o below Op

onsiders tha

led efficien

level of eff

ol?

d CVEs su

ests rather

sed in prev

2010/11 BT h

nd operating c

ch) respect

mpared to o

the marke

o the upper

he low end.

nd migratio

ntives on B

efficiency ra

alysis at aro

range of 2%

ange for all

g BT’s histo

s as a resu

o cautious.

penreach’s

at this prov

cy. We are

ficiency “bo

ubmitted by

r than the o

vious LLCC

has achieve an

costs respectiv

ively

other

et is

r end

We

on to

T to

ange

ound

% to

l the

orical

ult of

own

vides

e not

nus”

y BT

other

and

nnual

vely

NON

153

Star

154

155

Ass

156

Ass

157

N CONFIDE

3. Whilst

would b

sources

idenitifie

rting charge

4. Ofcom

of price

Openra

subject

that Of

services

5. As Ofco

regardin

well as

an “abs

sessment of

6. We not

subject

as C&W

sessment of

7. We (an

pricing.

bandwid

differen

ENTIAL VE

Ofcom may

be prudent f

s of informa

ed and teste

e adjustmen

notes that “

es and th

ach flexibilit

t to meeting

fcom does

s.

om recogni

ng the ban

more gene

sence of com

f BT Wholes

te Ofcom’s

to previous

WW (PPC A

f Openreach

nd others)

As Ofcom

dths as one

ntiation at a

“...the step

EAD, 12%

ERSION

y rely on t

for Ofcom t

ation menti

ed.

nts

“in the abse

e pricing s

ty to determ

g the charg

not propo

ses elswhe

dwidth grad

eral compet

mpetition co

sale charge

conclusion

s Ofcom sc

Appeal).

h charges fo

have expr

m notes the

e goes up th

product lev

increase in

for BES a

45

the BT sup

to sense ch

oned). Sign

ence of com

structure,

mine the m

ge control c

ose any st

ere, Telefón

dient pricin

ition conce

oncerns”.

es for TI ser

nsand in pa

rutiny as we

for Ethernet

ressed con

ere is signif

he bandwid

vel too:

n price betw

and 32% fo

pplied inform

heck it (for e

nificant adv

mpetition con

we conside

most approp

conditions.”

art charge

nica and oth

g in respec

rns. We do

rvices

articular tha

ell as that o

t services

ncern abou

ficant step

th gradient

ween 10Mbit

or WES. Ho

mation, we

example, ag

verse varian

ncerns on th

er it appro

priate struc

[§A5.182 L

adjustmen

hers have r

ct of Ethern

o not consid

t PPC char

of the CC (a

t the band

changes in

– and furth

t/s and 100M

owever, the

e believe th

gainst the o

nces should

the current l

opriate to

cture of pri

LLCC] We

nts to Ethe

raised conc

net service

der that the

rging has b

and others s

dwidth grad

n the pricin

hermore the

0Mbit/s is 8%

e step incre

hat it

other

d be

level

give

rices,

note

ernet

cerns

s as

ere is

been

such

dient

ng of

ere is

% for

ease

NON

158

159

160

Ofco

161

35 Ofbandcomm

N CONFIDE

8. We not

“tend[s]

discrim

higher

and §A

consum

conclud

9. Howeve

vs prop

ask for

proport

whethe

classifie

0. Ofcom

concen

at the c

apply a

forms a

om modellin

. We not

sensitiv

TI volum

volume

welcom

fcom also con

dwidth accompmon costs [§A

ENTIAL VE

between 1

100% incre

e that Ofco

]” to have a

inatory and

prices for h

A 5.178 LLC

me Ethernet

des that BT’

er, Ofcom’s

portions of a

r greater c

ions) of ex

r BT Whol

ed as extern

has of cou

tate price re

cost of RBS

at the cost

a significant

ng

te that Ofco

vities of the

mes fall by

s increase

me clarificati

ncludes that supanied by decA5.179 LLCC

ERSION

00Mbit/s a

eases for all

m’s respon

an incentive

d/ or anti-co

high capac

CC Annexe

t circuits as

’s pricing ca

s assessme

all Ethernet

clarity as t

xternal vs in

lesale’s use

nal consum

urse already

eductions (f

S circuits, w

of 1Gbit/s

proportion

om seeks to

costs base

70% over

by over 80

on:

uch pricing (recreasing averaC Annexes].

46

and 1Gbit/s

l three serv

nse to this is

e to price t

ompetitive w

ity circuits

es]) becaus

s well as ex

an be an eff

ent here ap

circuits, no

to Ofcom’s

nternal con

e of circuit

mption.

y concluded

for example

we see no r

s Ethernet

of the dem

o provide so

e case to its

the charge

0%. There

ecovering morage costs) may

s is substan

vices.” [§A5.

s that it doe

the differen

way (i.e. no

(relative to

e BT’s own

xternal cust

ficient appro

pears to be

ot specifical

s assessme

sumed 1Gb

ts for resa

d that there

e) on those

reason why

circuits wh

and for 1Gb

ome transpa

modelling

control per

e are some

re fixed and cy be an efficie

ntially grea

166 LLCC A

es not consi

t bandwidth

o strategic i

low bandw

n downstre

tomers. Mo

oach.35

e in respect

ly 1GBit/s.

ent of the

bit/s circuits

le to mobi

e is an ince

PPCs cons

such incen

ere externa

bit/s.

arency as t

assumption

riod, whilst

apsects w

ommon costs ent way to rec

ater: more

Annexes]

ider Openre

h products

incentive to

width) [§A5

eam busines

oreover, Of

t of the inte

Hence, why

balance

s. In partic

le operator

entive for B

sumed by it

ntive should

al consump

to the indica

ns (for exam

Ethernet ci

where we w

from higher cover fixed an

than

each

in a

o set

.173

sses

fcom

ernal

y we

(and

cular,

rs is

BT to

tself,

d not

ption

ative

mple,

ircuit

would

d

NON

N CONFIDE

i)

ii)

iii)

ENTIAL VE

Ofcom rem

cost foreca

this has be

The degre

example,

information

1Gbit/s se

Ofcom use

We note th

increase by

estimates a

ERSION

marks that “

asts carried

en achieved

ee of robu

we note

n for modell

rvices. [§A

d in respec

hat Ofcom’s

y 80% over

a 140% incr

47

“EAD servic

d out at com

d and wher

ust sense

that Ofco

ing the esti

A5.228 LLC

ct of 1Gbit/s

s sensitivity

r the period

rease?

ce costs co

mponent lev

re that analy

checking

m propose

mated cost

CC Annexe

circuits?

y analysis a

d. However

ould be obt

vel”. We a

ysis can be

of 1Gbit/s

es to use

ts of WES a

s]. What in

ssumes Eth

, at §A5.11

tained from

are unclear

found.

services.

e Openrea

and BES ab

nformation

hernet volu

8 LLCC Of

m the

how

For

ach’s

bove

has

umes

fcom

NON

CO

162

163

164

165

Tele

Sep

N CONFIDE

NCLUDIN

2. We not

price co

BT and

3. Genera

exampl

above)

particul

from ex

inputs),

up acce

aggrega

Openre

4. We trus

conclus

5. We look

efónica UK

ptember 20

ENTIAL VE

G COMME

te that Ofco

ontrols fram

KCOM’s re

ally, we ar

e in respec

that Ofcom

ar, that the

xcessive pri

that Ofcom

ess to BT’s

ation netw

each DWDM

st Ofcom fi

sions and B

k forward to

K Limited

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ERSION

ENTS

om has conc

mework rem

espective S

re supportiv

ct of ECCs

m has not

e charge co

icing of 1Gb

m could stim

s assets via

works, Ofc

M systems.

nds our co

CMR and L

o hearing ho

48

cluded that

mains an ef

MP.

ve of the

s). However

t addressed

ontrol struct

bit/s circuits

mulate opp

a passive a

com shoul

omments in

LLCC regula

ow Ofcom p

t, with some

ffective and

adjustmen

r, we are c

d certain k

ture fails to

s (and is no

portunities fo

access solu

ld support

this respon

atory framew

proposes to

e adjustmen

d proportion

nts Ofcom

concerned (

key issues

o protect m

ot reflective

or competit

utions and,

t multiple

nse helpful

work.

deal with o

nts, the exis

nate remed

proposes

(as we disc

for mobile

mobile opera

e of the cos

tion by ope

in the cas

CPs sha

in finalisin

our concern

sting

dy to

(for

cuss

e. In

ators

ts of

ening

se of

aring

g its

s.

NON

ANN

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in co

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very

1Gb

EA

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EA

1000 

EA

1000 (

period

 

For

the p

cost

N CONFIDE

NEX 1 - Ext

uts: 5 Sept

ernet 1Gb p

we say in the

omparison w

y be a small d

port 1Gbits in

re is dedicate

ll Gbit make

note (see fol

y different, ev

bits vs the 10

AD Local Access

AD Local Access

AD Local Access

AD Local Access

(60 month minim

d) 

the non “LA

per km charg

ts of providin

ENTIAL VE

tract (Ann

tember2011

pricing vs 10

e covering let

with and 100M

difference in

nstead of 100

ed to each ser

es no differen

llowing table

ven though t

00Mbits.

Effective

10  30/09

100  01/10

22/04

mum

15/12

A” variant and

ge is the sam

ng dedicated

ERSION

ex 2) from

1?

00mbit

tter, there is

Mbits EAD p

the cost of t

0Mb, the fib

rvice in all c

nce to traffic

e) that the dif

this gives the

e date 

9/2010 

0/2011 

4/2009 

2/2010 

d a main link

me for all vari

fibre to supp

49

Telefónic

a significant

products (Lo

the interfaces

bre is the sam

ases, so whe

loading (the

fferential bet

e same propo

Capacity

increase

compared

to lower

b/width

product

 

x 10 

x 10 

 

k charge app

iants, re-enf

port any of th

ca response

t differential

ocal Access v

s on the netw

me.

ether that fibr

ere is no rout

tween 10Mb

ortional incre

Connection

1,560.00 

1,950.00 

2,500.00 

2,500.00 

lies because

forcing the vi

hese services

e to Ofcom

[Opex] cost

variant) (2.25

work terminat

re is carrying

ing equipme

its and 100M

ease in bandw

%

difference

to product  

 

25.00 

28.21 

 

it crosses ex

iew that in pr

s is the same

m Call for

of 1Gbits EA

5 x). Whilst t

ating box to

g a few Mbit

ent involved)

Mbits service

width as the

Annual

Rental 

2,125.00 

2,131.20 

4,800.00 

3,600.00 

xchange area

ractice BT’s

e.

AD

there

ts or

).

s is

%

difference

to product

 

0.29 

125.23 

 

as,