Sky slams 'excessive faults' on BT copper lines

British internet service provider Sky has called for a full separation of BT's wholesale and retail arms, accusing the incumbent of failing to adequately maintain the last mile of copper lines.

BT's wholesale fixed-line arm, Openreach, should be completely separated from BT, British ISP Sky has argued, claiming the company is not providing adequate service to retail competitors.

Openreach was formed in 2005 to allow retail competition in the fixed-line telecommunications space on BT's legacy copper network. Since then, companies like Sky, TalkTalk, and Orange have entered the market, offering new services such as ADSL2+.

In a submission (PDF) to UK telecommunications regulator Ofcom's review of digital communications, retailer Sky has said that BT has made it difficult through Openreach for retail competitors to deliver super-fast broadband services using their own infrastructure, while at the same time failing to adequately maintain its own copper infrastructure.

"This network is old; most of it was laid many years ago. Its reliability is therefore critically dependent on effective maintenance," Sky said.

The telco said that while the number of faults on the legacy network dropped between 2005 and 2009, analysis by Frontier Economics found that faults increased again by 2012, with around 3 million faults on copper lines.

"This level of faults on the network is unacceptably high. Such faults cause substantial consumer detriment and, in the case of small firms, can have a significant impact on their livelihood."

Openreach should fix faults by the next working day, but, according to Sky, the company meets this target less than 70 percent of the time.

In June, Ofcom set new rules demanding that Openreach complete fault repairs in one to two working days of being notified, with this increasing to 80 percent in 2016. If Openreach fails to meet this target, it can be fined or face sanctions.

In requesting new lines, Sky said its appointment dates are knocked back by Opeanreach 11,000 times on average per month. Once one is agreed to, it is often moved to a later date -- with this occurring around 36,000 times per month.

The company also has a target of 12 working days for a new line to be installed, and in the last year, 400,000 Sky customers waited 10 calendar days or longer for a line to be installed. 14,000 of these customers waited more than 45 days for a line to be installed.

In February this year, Openreach missed over 500 appointments to install new lines for Sky customers, and a further 4,000 jobs per month went uncompleted.

Sky said it is evident that one of the key causes of service quality issues was that given Openreach had stable revenues, the company's cost cutting had allowed money to be diverted to other activities in BT's overall business.

"As part of the large BT Group, Openreach must compete for resources, capital budgets, and management time and focus -- often against activities with potentially higher returns to BT Group -- or activities considered to have greater strategic importance to BT, such as its re-entry into mobile services."

Sky said the cost for a retailer upgrading a customer on BT's network to fibre-based broadband services -- that is, fibre to the cabinet -- is much higher than what Openreach charges its parent company BT.

The result is that BT has captured much of the retail market, with Sky estimating that 74 percent of all super-fast broadband users sign up with BT.

Sky said it has considered rolling out its own "last mile" fibre infrastructure, but the economics are "challenging" and would depend on getting enough demand for the network infrastructure. Given that Virgin also owns some infrastructure, a split BT retail from Openreach that considers alternative infrastructure providers might help improve the economics of rolling out another network, Sky said.

BT, which has already announced trials of G.fast technology designed to deliver higher broadband speeds over short copper lines, is also allegedly steadfastly refusing to allow its retail competitors to conduct similar trials.

Sky said it has no detailed information on the copper network, despite requests to Openreach, and was told it was "unnecessary" to test its own G.fast units.

The BT model is one often cited by Australian Communications Minister Malcolm Turnbull as being the ideal for the National Broadband Network (NBN). BT has even entered into an agreement with NBN to share information about the rollouts in the UK and Australia.

Unlike BT, NBN is a wholesale-only company, but the government-owned entity will need to work closely with incumbent fixed-line company Telstra as the copper network is handed over to NBN for the so-called multi-technology mix.

Telstra is planning the design of the fibre-to-the-node network, and is in the running to maintain the copper network under the current model.