BEREC – Examining EoI Jon Furmston, Director Equality of Access Office

What is EoI? EoI in Practice QoS Requirements Information Requirements System Requirements Compliance Regime Costs/Benefits Taking each decision tree question in turn…

What is EoI? EoI in Practice QoS Requirements Information Requirements System Requirements Compliance Regime Costs/Benefits My view from UK experience (not a theoretical regulatory perspective) and each country is unique… Terminology Openreach – functionally separate EoI division BT Retail / BT Global Services – downstream retailing divisions Undertakings – the formal ‘contract’ agreement between BT and Ofcom Equality of Access Board (EAB) – independent oversight of the Undertakings Communication Providers (CPs) = altnets Timeline Undertakings signed September 2005 Openreach created January 2006 All legally binding milestones now complete Systems roadmap is the only deliverable not (quite) finished 97% of lines are now EoI and 92% of customers records are on separated systems

What is EoI? EoI in Practice QoS Requirements Information Requirements System Requirements Compliance Regime Costs/Benefits EoI is the heart of the UK model, and is more effectively delivered because it is part of a wider set of measures Undertakings Definition –EOI means that BT provides the same product or service to all Communications Providers (including BT) on the same timescales, terms and conditions (including price and service levels) by means of the same systems and processes, and includes the provision to all Communications Providers (including BT) of the same Commercial Information about such products, services, systems and processes. In particular, it includes the use by BT of such systems and processes in the same way as other Communications Providers and with the same degree of reliability and performance as experienced by other Communications Providers. –In this context “the same” means exactly the same subject only to trivial differences, specific items (eg credit vetting and payment procedures) or as agreed by Ofcom in writing. Does EoI Guarantee EOO? –CPs will combine with differing add-ons to intentionally differentiate –SMPF/MPF: differing business models How tightly is EoI related to Functional Separation? –EoI is most effective when delivered with a functional separation wrap (e.g. separate assets, systems, information, brand, incentives) –The boundaries of the separated organisation help define the EoI boundaries and assure equivalent service delivery

What is EoI? EoI in Practice QoS Requirements Information Requirements System Requirements Compliance Regime Costs/Benefits Price & Conditions are easy to align - other remedies can deliver that. Service equivalence requires systems and processes and that is hard. Price & Conditions are easy to align - other remedies can deliver that. Service equivalence requires systems and processes and that is hard. Which Products –All Access Network-based products (where BT has SMP) –LLU, WLR, Ethernet, Fibre based Broadband –Only one EoI point in the value chain (the Openreach boundary) What makes a product EoI-compliant? –A common front end ordering/fault system for all CPs –Engineers behaviour in front of customers –And the commercials (but that is relatively easy) How to handle new product requests? –Statement of Requirement process to transparently receive, process and deliver or reject all requests

Absolute service levels are outside the remit of the Undertakings. The Undertakings only require that the same level of service is provided to external CPs as is provided to BT CPs (as measured by KPI charts). This could be good or bad levels of service. QoS and EoI In theory, Openreach poor service levels experienced by BT Retail, will make BT Group CEO exert pressure on Openreach to raise levels, that all CPs will benefit from. In practice it is not always as straightforward as that! And in times of bad service the number of questions by CPs about equivalence goes up. What is EoI? EoI in Practice QoS Requirements Information Requirements System Requirements Compliance Regime Costs/Benefits QoS requirements are not needed for EoI to work but… EoI does not guarantee a standard of QoS QoS requirements are not needed for EoI to work but… EoI does not guarantee a standard of QoS

What is EoI? EoI in Practice QoS Requirements Information Requirements System Requirements Compliance Regime Costs/Benefits Information restrictions are essential for there to be trust in the EoI system Information restrictions are essential for there to be trust in the EoI system Two types of restricted information –Openreach Commercial Information (e.g. product launch dates/price changes/network build out) must only be shared on an equivalent basis Openreach monthly commercial working groups and web/ vehicles help with equivalent communication –Openreach Customer Confidential Information (e.g. individual order details a CP has submitted or forecast volumes) must not be shared with any other CPs including BT CPs Only allowing BT CPs system access into Openreach that external CPs use, ensures that BT CPs does not have ‘special’ access to CCI data Information is shared by systems and/or people Stopping employees sharing inappropriate information via s / collaboration tools requires training, reinforced behaviours and continual vigilance.

What is EoI? EoI in Practice QoS Requirements Information Requirements System Requirements Compliance Regime Costs/Benefits System Separation is essential but costly, lengthy and complex It does not have to be physical separation System Separation is essential but costly, lengthy and complex It does not have to be physical separation Separation is essential component, the question is, “what degree of separation?” Logical should be sufficient (hence cloud computing can work). The focus should be on administering the staff access rights BT CPs moved to using the existing Altnet Openreach platform “ Instant” EoI with costs born primarily by BT

What is EoI? EoI in Practice QoS Requirements Information Requirements System Requirements Compliance Regime Costs/Benefits Faith in the EoI system is essential and this is delivered (in part) by a full and transparent compliance regime Faith in the EoI system is essential and this is delivered (in part) by a full and transparent compliance regime Compliance takes place at four levels 1.Individuals trained and systems/processes designed to encourage equivalent behaviour 2.BT/Openreach compliance teams 3.EAB: Independent oversight sitting within BT but having 4 out of 5 independent members (and audited by PwC) 4.External NRA oversight (if and when required) To demonstrate compliance: Significant reporting and meeting with CPs Formal and Informal Complaint handling Product EoI KPIs help CPs can’t easily check EoI themselves –they only ever see one input (their own)!

What is EoI? EoI in Practice QoS Requirements Information Requirements System Requirements Compliance Regime Costs/Benefits Systems cost BT much more than was expected, but there have significant benefits, making the UK one of the most competitive markets System separation and changes were the most costly (and disruptive to end users) element –But EoI without all CPs using a common system is a weak EoI And finally and most importantly…EoI only works if it is trusted. –Put significant effort into ensuring trust can be fostered otherwise all the systems costs and hard work of EoI are a complete waste!