Issue 5 – 03/08/2020 1 of 41

Physical Infrastructure Access (PIA)

Internal Reference Offer (IRO)

August 2020 – Issue 5

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Foreword

On 28 June 2019, Ofcom published its Physical Infrastructure Market Review (PIMR) final statement setting

out the regulation applying to Openreach’s physical infrastructure (ducts, poles and underground

chambers). This document forms part of Openreach’s PIMR obligations commonly referred to as an

Internal Reference Offer (IRO).

Openreach

Openreach Limited is a wholly-owned subsidiary of BT looking after the networks and physical

infrastructure that connect tens of millions of homes and businesses to phone, broadband, and TV. We

have our own Board, separate brand and an independent workforce of approximately 35,000 people,

including the largest team of fibre broadband engineers in the country.

Openreach is a highly regulated and functionally separate business designed to provide products and

services in a non-discriminatory way, primarily through obligations to sell those products on an Equivalence

of Inputs (EoI) basis. The major EoI products include those supporting fibre broadband, local loop

unbundling, and Ethernet amongst others.

Openreach relies on its physical infrastructure (its ducts and poles) to deliver these services and meet its

regulatory obligations, as well as enabling it to compete commercially with operators that have their own

networks, platforms and physical infrastructure (e.g. cable, wireless and TV). Consequently, Openreach

does not have the same discretion as a CP investing in a new network and choosing only to access specific

parts of Openreach’s physical infrastructure.

The PIMR (as did the Wholesale Local Access (WLA) market review) concluded that Openreach should not

be required to purchase its own Physical Infrastructure Access (PIA) product on an EoI basis,1 as this could

increase costs and require new systems and processes to be implemented within Openreach, as well as

potentially impacting Openreach’s ability to invest in new fibre networks.

Instead, Ofcom imposed a ‘No Undue Discrimination’ obligation for PIA.2 This document supports the

regulation by increasing transparency of Openreach’s internal operations and enabling comparison with

the terms and conditions of its PIA product.

This document will be updated regularly to include changes to the PIA product, and where relevant,

additional details of Openreach’s internal processes as they are further developed and documented.

1 See PIMR Final Statement paragraph 4.77. 2 See PIMR Final Statement Annex 26 Condition 4.

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Table of Contents

1. Introduction ........................................................................................................................................................ 4

2. Overview of the PIA product and Openreach’s internal use ............................................................ 6

2.1 Physical Infrastructure Access (PIA) ..................................................................................................... 6

2.2 Openreach’s Fibre First Programme ...................................................................................................... 8

3. Key Differences - PIA product and Openreach Internal Usage for FTTP .................................. 11

3.1 Forecasting and Plan & Build ................................................................................................................. 11

3.2 PIA systems ................................................................................................................................................... 14

3.3 The Order/Notice of Intent (NoI) Process ........................................................................................ 16

3.4 The Build Complete Process ................................................................................................................... 18

3.5 The Network Adjustments Process ..................................................................................................... 20

3.6 PIA Key Performance Indicators (KPIs) ............................................................................................ 24

4. Comparison of PIA legal instrument conditions to Openreach’s usage .................................... 30

5. Regulatory Financial Reporting................................................................................................................ 37

ANNEX A - Network Adjustment Categories ................................................................................................ 38

ANNEX B - Network Adjustments and the ‘Path to Collaboration’ model. ....................................... 39

ANNEX C - Further Information Sources. ...................................................................................................... 40

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1. Introduction

Background to the PIA internal Reference Offer (IRO)

1. The Physical Infrastructure Access (PIA) product, also known as Duct and Pole Access (DPA), is made

available to Communications Providers (CPs) by Openreach. PIA allows CPs to place orders to gain direct

access to Openreach’s physical infrastructure (ducts, poles, and underground chambers) so that they can

deploy their own fibre networks to supply broadband and/or business connectivity services3 to their end-

customers.

2. The PIA product also enables PIA customers to order Network Adjustments from Openreach. Network

Adjustments are a range of network and civil engineering activities which are necessary, feasible and

efficient4 and are required to repair or relieve congestion in existing Openreach physical infrastructure.5

3. Openreach does not purchase the PIA product to use its physical infrastructure. Therefore, this internal

Reference Offer (IRO) document is intended to increase transparency of Openreach’s internal processes,

and where relevant, identify differences with the PIA product. This document is primarily based on two

information sources:

Firstly, the most recent external reference offer issued by Openreach effective from 1 August 2019,

6 which governs the Physical Infrastructure Access product provided to third parties; and

Secondly, Openreach’s internal use of its physical infrastructure for the purposes of deploying Fibre

to the Premises (FTTP) and Ethernet networks, and in so far as possible, comparing this use to the

externally sold PIA product.

4. In this context, we look to Openreach’s major FTTP programmes7 and Ethernet services as the primary

benchmarks as the key policy driver behind the PIA remedy is to support, where viable, further third

party investment in fibre networks in the UK.8

5. To date, we have been trialling many different techniques and operational processes to deploy fibre 9

and are now refining these into more standardised approaches to apply in the future. Therefore this

document will be subject to further development and refinement on an ongoing basis, as it represents a

current broad comparison of PIA with those systems and processes that we apply where we use existing

physical infrastructure.

6. We have reviewed the external reference offer conditions set out in the PIMR legal instrument,10 and

cover these in Section 4 of this document. We have also focussed in more detail on specific areas where

we understand stakeholders require more information regarding Openreach’s internal use of physical

infrastructure and have covered these in Section 3 of this document.

7. In Section 3 we set out the main differences between Openreach’s internal use and the PIA product and

an explanation of why such differences exist. The areas covered include the Plan and Build process, the

PIA Map Tool, the Order/Notice of Intent (NoI) process, the Build Complete process, the Network

Adjustment validation process and we also include information and output relevant to PIA key

performance indicators (KPIs).

3 Previously under WLA regulation PIA customers could only use the PIA product if they were planning to supply ‘mixed usage’ services i.e. primarily broadband services but business connectivity services could also be supplied as a secondary use case. These restrictions were removed by the PIMR final statement. 4 Please see paragraphs 2.31 to 2.93 ‘WLA Market Review: Statement – Volume 3 – PIA remedy’. Ofcom also set a range of other criteria which a network adjustment must fulfil. Also see paragraphs 5.87 to 5.123 of the PIMR final statement. 5 Please see Section 2 of this document for an overview of the PIA product, including Network Adjustments. 6 Please see the PIA contractual documentation at: https://www.openreach.co.uk/orpg/home/products/ductandpoleaccess/ductandpoleaccess.do 7 Please see: https://www.openreach.com/fibre-broadband/fibre-first for further details. 8 Therefore we have not focussed the comparison on products such as LLU MPF for example. 9 Please see Section 2.2 for further background on our Fibre First programmes. 10 The legal conditions covering the IRO are set out in Conditions 7.2, 7.3 and 7.4 of Annex 26 (PIMR Final Statement published 28 June 2019).

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8. The structure of the IRO is as follows:

Section 1 - provides background information on Openreach, PIA and on how the IRO has been

prepared.

Section 2 - contains a high-level description of the PIA product and the Openreach Fibre First

programme.11

Section 3 – covers the main areas that stakeholders have identified as needing further transparency

such as PIA ordering processes and systems, Network Adjustments and key performance indicators

(KPIs).

Section 4 – lists the legal conditions in the PIMR legal instrument for the PIA Network Access

reference offer and comments on the comparison with Openreach’s internal usage of infrastructure.

Section 5 – gives an overview of current regulatory accounting consultations and how they will

develop to give further transparency to both internal and external PIA transactions.

Annex A – summarises our approach to validating different categories of Network Adjustments.

Annex B – outlines how our Path to Collaboration (PTC) approach operates for Network Adjustments.

Annex C – provides links to PIA product and contractual information as well as other supporting

information from the Openreach website including relevant Passives Industry Working Group (PIWG),

and Copper and Fibre Products Commercial Group (CFPCG) information.

11 We aim to include further information on Openreach’s Ethernet services in future versions of this document.

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2. Overview of the PIA product and Openreach’s internal use

9. In this section we highlight the broad similarities between the PIA product and Openreach’s internal

usage of physical infrastructure. Section 3 focusses on the main differences.

2.1 Physical Infrastructure Access (PIA)

10. PIA is a product which enables CPs to utilise Openreach’s physical infrastructure in ways which support

their investment in new fibre networks. CPs are able to rent access to ducts, poles, underground

chambers, plus request Network Adjustments, and purchase a range of other ancillary services to help

link into their own physical infrastructure.12 Openreach uses the same physical infrastructure13 to deploy

its own networks.14 Openreach also uses infrastructure belonging to third parties such as energy

companies but this infrastructure does not form part of Openreach’s PIA product.

11. The access to Openreach physical infrastructure represents only a part of the overall fibre and

infrastructure build required for a network deployment. Openreach and CPs also need to carry out a

much wider range of network build activities which are not part of the PIA remedy (e.g. installing fibre

cabling, new infrastructure asset construction, site surveys, obtaining relevant wayleaves, training and

accreditation of their engineers and contractors etc.).

12. Please see Figure 1 below, which illustrates how PIA customers can access the same Openreach

infrastructure elements that Openreach uses. As an example, and working from the left-hand side of the

diagram below the text boxes explain the common elements which would be used by either Openreach

and/or PIA customers when building an FTTP network from an Openreach exchange/Point of Handover

(PoH) or CP Point of Presence (PoP) to an end-user premises. Because of the unrestricted nature of the

PIA product the same infrastructure elements can also be utilised, as required, by PIA customers for

other fibre based network deployments (e.g. Ethernet, Fibre to the Cabinet (FTTC) etc.)

12 Please see the full set of PIA products at: https://www.openreach.co.uk/orpg/home/products/ductandpoleaccess/ductandpoleaccess.do 13 Where the physical infrastructure exists however Openreach also utilises other build techniques such as Direct in Ground (DIG) to deploy networks (as do other CPs). 14 For all services such as Ethernet, FTTP, FTTC, LLU, WLR etc.

Figure: 1

End-user

4. Duct, poles & chambers occupied by d-side fibre (shown by blue dashed line) – can be used for an FTTP based deployment.

5. Final FTTP drop to end-user could be via a pole or lead-in duct. The Connectorised Block Terminals (CBTs) or alternative CP equipment could be attached to poles or placed in UG chambers.

2. Duct, poles & chambers occupied by e-side fibre (shown by blue dashed line) can be used by both Openreach and PIA customers as part of an FTTP deployment.

1. Cablelink is required if CP wants to link its FTTP network installed in Openreach physical infrastructure to space rented in an Openreach POH/Exchange.

Exchange or CP PoP

Fibre cable Fibre cable

Pole

3. An FTTP splitter or other fibre equipment can be placed in an underground chamber for FTTP by CPs or Openreach.

6. Spine Duct

7. Lead in duct

8. Final drop

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13. PIA customers do not need to collocate at an Openreach Point of Handover (PoH) or in the Openreach

exchange area serving the end-user, and since the introduction of the PIMR regulations they are no

longer restricted to using PIA for their access network.15

14. Openreach does not purchase the PIA product as an input into its services,16 however the Openreach

physical infrastructure elements used are the same (i.e. the occupation of spine and lead-in ducts, poles,

footway boxes and manholes by Openreach network). Openreach also carries out many different civil

engineering activities when it builds networks (both on the active and physical layers of the network)

and therefore if applicable will also use a subset of activities similar to PIA customers Network

Adjustments on its physical infrastructure.

15. The PIA product range maps onto Figure 1 as follows:

Spine duct - this is the main duct infrastructure running from the serving exchange to a distribution

point close to the end-user premises (see 6 above in Figure 1). CPs are granted a licence to install

sub-duct and/or multiple cables up to 25mm in diameter for the spine of their fibre network within

Openreach’s duct infrastructure. Where there is a requirement to install in excess of 25mm the CP

would place subsequent orders.

Lead-in duct - this is the duct between the last chamber/footway box and the end user premise (see

7 above in Figure 1).17

Pole access - Openreach grants a CP a licence to attach and maintain a cable, blown fibre attachment

or pole top equipment to one of Openreach’s existing poles to carry out a final drop (i.e. distribution)

to an end-user premises (see 7 above in Figure 1); and/or to provide the ‘carrier’ element of their

network deployment (i.e. serving a similar function to duct access to build out from their Point of

Presence (PoP)).

Underground chambers - CPs can rent space in Openreach’s underground chambers to place their

equipment (see 3 above in Figure 1), including cable coils and distribution joints.

Network Adjustments - the PIA product also provides the facility for CPs to order Network

Adjustments from Openreach. These are a range of network and civil engineering activities which

are necessary to repair or relieve congestion in existing Openreach physical infrastructure. For a

Network Adjustment to qualify as a legitimate request it has to be a necessary, feasible and efficient

adjustment. 18 CPs can either request Openreach to carry out the adjustment or carry it out

themselves (a self-provide order) in line with the terms and conditions of the PIA contract. Please

see Section 3.5 of this document for more details.

Ancillary Services – CPs can request a large range of ancillary services from Openreach (which are

listed on the Openreach price list19) all of which are charged separately at cost oriented tariffs.

Access to the Exchange - PIA customers are able to use Openreach exchange space (see 1 above in

Figure 1) or their own PoP to house their headend equipment. If they choose to purchase Openreach

exchange space they are also able to buy a Cablelink product (which is not a PIA portfolio product)

to connect their external FTTP network into their space within the Openreach PoH/Exchange.

Alternatively, they can choose to link directly into a non-Openreach duct network or non-Openreach

PoP without using Openreach Cablelink products. Openreach FTTP deployments use Openreach

exchange space to house headend equipment but do not purchase a Cablelink product for exchange

access.

15 Ofcom’s ‘Physical Infrastructure Market Review’ introduced unrestricted PIA and the product can now be used for any purpose in the fixed network including access, backhaul and core. 16 For services such as FTTP, Ethernet, FTTC, LLU, WLR etc. 17 There is also an element of the product which is referred to as Lead-in link duct. Ofcom are currently consulting on the simplification of PIA lead-in products which we expect will conclude in summer 2020. 18 Please see paragraphs 5.87 to 5.123 of the PIMR final statement. Ofcom also set a range of other criteria which a network adjustment must fulfil. 19 http://www.openreach.co.uk/orpg/home/products/ductandpolesharing/ductandpolesharing/ductandpolesharing.do

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2.2 Openreach’s Fibre First Programme

Introduction

16. Openreach already provides over three million premises in the UK with the capability to buy FTTP, and

the Fibre First programme is committed to a much larger upgrade of the UK’s fibre infrastructure

extending well beyond the existing coverage to provide twenty million premises with FTTP capability.20

17. Our current plan is to make 4.5 million premises capable of ordering FTTP by March 2021. This target

will set Openreach on a trajectory to achieve its ambition of building a 20 million FTTP footprint by the

mid to late 2020s if the conditions are right.

18. However, ensuring the majority of properties in the UK can have a full fibre connection is a massive task

and will take significant time, engineering, manpower and investment to deliver. Therefore, Openreach

needs to gain experience in building FTTP networks at scale and at a competitive cost. Our consultation

with industry21 helped us identify a set of enablers which would help to support this ambition.22

19. Fundamentally, we need to reduce the costs of delivering fibre at scale and ensure that there is demand

for and take up of the new FTTP platform. Therefore, we are trialling lots of different processes and

operating models around the country, with the aim of choosing and adopting best practice for all our

projects. Consequently, we have already made significant progress in reducing the cost of delivering

FTTP. We are also piloting new ways of working, for example, with local government to simplify

regulations and traffic management. The multiple Fibre First sub programmes, which are covered in

more detail below, have been particularly effective in enabling us to do this.

Overview of Openreach’s Fibre First and large scale commercial build programmes23

Competitive Landscape

*On the basis of publically stated ambitions

20. The fibre build landscape is becoming increasingly competitive with a potential combined footprint of

38.7m premises passed compared to the total number of premises in the UK of 32.8m. Therefore fibre

deployment may naturally lead to some overlap in commercially attractive areas.

21. Our evolving experience and improved internal skills in planning our FTTP roll out with an increased

emphasis on a forward looking view has led us to consider how we can add further transparency of our

build plans in line with our aim to support the Government’s strategy to accelerate commercial full fibre

network investment, as well as give our stakeholders (like council leaders, MPs, our CP customers and

20 Please see: https://www.homeandbusiness.openreach.co.uk/fibre-first 21 Please see: https://www.openreach.co.uk/orpg/home/updates/briefings/generalbriefings/generalbriefingsarticles/gen04717.do 22 In addition to improving our own operational processes and commercial case, we also need a supportive public policy and regulatory environment that encourages infrastructure investment. 23 The detailed programme and sub-programme information included in this and the following sections was also presented to the Passives Industry Working Group (PIWG) on 20 May 2020.

Altnets have

committed to

at least

18.7m

premises*

Openreach

has an

ambition of

20m

premises

by mid-late

2020s

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the general public) valuable information to make informed decisions on their FTTP investments and sales

efforts, and to help encourage people to take up a full fibre service when it arrives. Tables 1 and 2 below

summarise the key differences between Fibre First sub-programmes and our proposed transparency

initiatives.

Table 1: Summary of differences between Fire First Cities, Rural and Retro Newsites

Announcement Format today

Proposed Announcement format*

Proposed Website Release Info*

Cities

Up to March 2021 (location + total no. of exchanges), exchange names with 3 months forward looking view. Updated quarterly.

24 months ahead (location + total no. of exchanges), exchange names with 3 months forward looking view. Updated quarterly. Includes Northern Ireland locations (Area 2).

Postcode checker updated.

Map/table.

Rural

List of locations, total number of exchanges and exchanges up to March 2021.

24 months ahead (location + total no. of exchanges), exchange names with 3 months forward looking view. Updated quarterly. Includes Northern Ireland locations (Area 3).

Postcode checker updated.

Map/table.

Retro Newsites

No announcement. Rolling target, updated

quarterly

Published list to include quantity of THP per Retro Newsite and postcode.

Postcode checker updated.

*Expected to launch in Q2 subject to internal review and governance.

Table 2: Fibre First Sub-programmes

Programme Definition Area 2/3 Transparency Comments

Fibre Cities Typically large towns and cities Vast majority

A2 Will be included under proposed

transparency arrangement.

Northern Ireland All build in Northern Ireland Majority A3 Will be included under proposed

transparency arrangement.

Rural/Area 3 Market towns, villages and rural

locations. Majority A3

Will be included under proposed publication

Arrangement.

Retro Newsites New Sites built predominately over the

past decade Both

Will be included under proposed publication

Arrangement.

BDUK (including R100/LFFN/CFP

etc.)

Government or community funded Programmes.

Vast majority A3

Not included - competitively tendered and in Area 3 where no-one else will likely

build.

Newsites Fibre New sites are new residential

developments. Both

Not included - all housing developers can choose to competitively award.

These programmes account for over 90% of

FTTP commercial deployment

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MDU The Multi Dwelling Units programme is

for the internal build inside the landlord’s property.

Both Not included - demand driven (landlord

asking us to work).

DIG

Small trial build focused on overcoming challenging

direct in ground network. Both Not included - short-term trial.

Other

Other programmes include but are not limited to:

Escalations/complaints where FTTP is used as a solution, adding network

capacity where VDSL cabinets are full and FTTP is a more appropriate

capacity augmentation, network build to fulfil a USO order, COVID-19 urgent

build for doctors/NHS staff etc.

Both

Not included – this is exclusively demand driven build, not part of any proactive

build plan.

22. However, it is important to note that Openreach decisions on where to build fibre and when are dynamic

in nature and dependent on a number of variables which can and do alter over time and this means that

plans are and remain subject to review and change. This material is shared for illustration and

information purposes only and CPs should not rely on these factors, variables and plans to make fibre

investment decisions on when and where to build fibre networks or to offer other services based on PIA.

23. Further information on how Openreach selects its FTTP deployment locations is given in Section 3.1 of

this document.

Summary

24. Importantly, apart from progressing its own fibre plans, Openreach is also committed to providing CPs

with a ‘fit for purpose’ high quality PIA product to support their own investments in full fibre networks

and/or business connectivity services, both for large scale and more niche operations. As part of its Fibre

First programmes, Openreach uses the same Openreach ducts, poles, and underground chambers for its

fibre programmes as PIA customers do.24 We have also sought to align our processes and systems, as far

as possible, to ensure there is no undue discrimination between how we use our physical infrastructure,

and how PIA customers can use it, including how we deal with the Network Adjustment obligations.

However, legitimate and necessary differences do exist, and we set out key differences in Section 3 of

this document and explain why they are necessary.

25. We are also committed to ensuring transparency by reporting on a range of KPIs to demonstrate PIA

service performance and also that there is no undue discrimination (NUD) across key Network

Adjustment related activities. We have now been producing PIA performance reports since 1 April 2019,

and these have built on significant work carried out to date with stakeholders and PIA customers. The

reports are issued to PIA customers, Ofcom and the Office of the Telecommunications Adjudicator (OTA)

on a monthly/quarterly cycle as agreed.25 We will also continue to work with stakeholders to develop

and improve our KPI information as part of our ongoing product development. Please see Section 3.6 of

this document for more detailed information on the output and specification of the service and

comparator KPI reporting.

24 Openreach may also decide to use the physical infrastructure of other providers to support its programmes through application of the ATI Regulations. 25 The metrics are published on the PIA Closed User Group area of the Openreach Customer Portal under ‘My Dashboard’ at: https://www.openreach.co.uk/orpg/home/home.do

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3. Key Differences - PIA product and Openreach Internal Usage for FTTP

Introduction

26. Stakeholders have raised a number of key items on which they require further transparency, which we

therefore cover in this section.26 They are addressed in the order of a PIA customer deployment process

and include:

Site selection, Forecasting and Plan & Build processes.

The systems used by PIA customers (the PIA Map Tool) and Openreach’s PIPeR system.

The Notice of Intent (NoI) ordering process.

The Build Complete process.

The Network Adjustment process.

The PIA Key Performance Indicators (KPIs).

27. In broad terms, the operational differences arise because a PIA customer is a third party accessing

Openreach assets (i.e. Openreach being a separate legal entity), and the PIA customer is the only party

which knows the inventory of the Openreach infrastructure that they are using and on which date they

start providing ‘live’ end-customer services. These important elements are captured in the formal

contract (i.e. the terms of the Reference Offer) and are not applicable to transactions within Openreach.

28. Further, in the case of Network Adjustments, Openreach has a corporate governance responsibility to

apply sufficient controls to authenticate and control costs and liabilities generated by third parties which

directly impact Openreach’s cash flow and capital budgets.

3.1 Forecasting and Plan & Build

3.1.1 Openreach Process

29. The Openreach FTTP deployment process is subject to a highly structured and phased approach. As part

of the overall coverage objective individual cities, towns or other areas are identified in phases looking

approximately 12-18 months ahead and are included in the rollout plan based on their suitability for an

FTTP product with good economics for Openreach, CPs and end-users.

Footprint Selection Overview

30. We have a set of design principles and objective criteria that we continue to develop, and which help to

guide our site selection process for Fibre Cities, Rural, and Retro Newsites sub-programmes and these

are summarised in Table 3 below:

Table 3: Fibre First Sub-programmes site selection

Footprint Selection27

Building on experience and objective principles used to date, we include the following steps: Initial selection of sites using desk-based exercise driven centrally

by Strategy. The model includes all UK exchanges. A range of core criteria and advisory metrics are considered to

evaluate relative attractiveness and shortlist locations, these include but are not limited to those factors listed below.

Core criteria Blockages per km DiG – Direct in Ground Cabling Multi-Dwelling Unit (MDU) % Total Homes Passed (THP) per Passive Optical Network (PON) FTTP and G.fast overlap Commercial attractiveness – expected take up, modelled cost etc. Building Digital UK (BDUK) overlap

Advisory metrics • Headend capacity • Spine cabling capacity • Traffic management complexity • Resource availability

26 This section does not address every item in the PIA reference offer – the full list (twenty nine items) are covered in Section 4 of this document. 27 These are and remain subject to review and change.

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31. Some of the factors we currently take into consideration during the selection process include amongst

others:

Anticipated demand for the product - taking particular account of CP and regional development

stakeholder demand.

Cost of deployment and potential return on investment.

Existing network performance.

32. No forecast information provided by PIA customers to Openreach is used in any way other than to help

ensure we meet our contractual obligations to the PIA customer and to provide a quality PIA service.

Such information is strictly controlled and restricted to individuals on a need to know basis and who only

need it for operational purposes to support the PIA product.28

33. Underpinning the analysis of the major commercial factors are a number of more detailed activities

which feed into the overall assessment of the viability of deployment in the selected areas. For example:

Engineering assessments may rule out individual areas which are likely to be uneconomic for FTTP

deployment (e.g. due to a low density of premises or where existing broadband take-up is known to

be very low).

Openreach Regional and Public Policy teams continuously engage with local development agencies

and stakeholders to assess their commitment to fibre roll-out which can change over time.

Other factors can also come into play, such as conflicting demands on the available Openreach

resource and that of its contractors which might restrict the capability to install the infrastructure in

the target timescales or in a particular geography. 29

34. After a deployment area has been chosen for an FTTP network deployment, a coordinated and

committed delivery plan is agreed internally and with engineering contractors, concerning the coverage

and other infrastructure related work on duct, poles and chambers. Detailed internal forecasts of

resourcing and costs are then generated during January and February covering the whole upcoming

financial year commencing in April, and it is this process which enables the correct scaling of engineering

resource to be committed by Openreach and its contractors to the specified area to achieve the plan.

Additionally, all major operating and capital expenditures by fibre programme will be subject to a

detailed five year overview as part of our Medium Term Plan (MTP). We set out further operational

details of the Fibre First planning process in Section 3.5 of this document.

35. After the FTTP build is completed, engineers are also assigned to the area to carry out the skilled tasks

required to support the product ordering and fulfilment process. In particular the FTTP end-user

installation process is very important in achieving a robust and premium quality product.

3.1.2 PIA Customer Process

36. PIA customers have control over their site selection and build process in the same way as Openreach

does; and to the extent that they require access to Openreach physical infrastructure to build their

network, the PIA Map Tool provides the Openreach inventory information they need to feed into their

planning tools, as well as estimates of duct availability by individual duct section.

37. Openreach has no knowledge of the extent of prospective CP build, or where it is likely to be located, or

how dependent it is on the PIA product (and associated Network Adjustments) unless PIA customers

provide sufficiently accurate and granular forecasts of likely PIA usage to Openreach.

28 Openreach held a briefing session for CPs on 22 July 2019 (organised by the OTA) to explain the extensive controls we have in place to ensure the confidentiality of commercially sensitive CP information, including the operation of the internal directory ‘PIA Marker’ system. Any requests for further information on our internal controls can be made through the Passives Industry Working Group (PIWG) where a presentation by the Business Integrity team (part of the Openreach Legal team) can be arranged. 29 Openreach works closely with its public funding partners such as BDUK, and civil engineering suppliers and depending on their priorities this can lead to tactical changes to coverage plans being agreed which will be picked up in revised forecasts.

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38. The use of PIA is a discretionary decision made by CPs and at the point that they decide that they wish

to use Openreach infrastructure, then good quality forward looking forecasts from the CPs are required

for Openreach and its civils partners to ‘right size’ resources in the right locations at the right time, as

well as to look ahead and potentially tailor processes and systems to scale appropriately for future

demand, just as we do for our own deployments.

39. Openreach and its external civils partners cannot resource appropriately for PIA customers’ projects

(especially for Openreach provided Network Adjustments) at a regional or national level unless

customers provide reliable forecasts with sufficient lead-times. Well-understood/developed forecasts

allow Openreach to plan for and mitigate surges in CP demand and market volatility. Forecasts provide

the baseline and context around which we judge and manage resource risk. In the case of PIA, it is

important to have access to accurate CP forecasts as it is a growing, non-substitutional, product.

Openreach has dramatically enhanced its partner forecasting capability over the last 6 months through

the Openreach Network Service Agreement (ONSA). Openreach is obligated to provide a stable and

predictable flow of work to our partners over a 12 month horizon. This is crucial to Openreach’s

operational delivery for our CPs, and for our partners’ own resource planning and in particular, for

delivery of our anticipated civils demand.

40. Similarly, stores forecasting (particularly around poles) is critical to ensure Openreach have sufficient

stocks of equipment, and that our suppliers have the capacity to meet demand and mitigate the risk of

forecast variance.

41. As set out above, we do this ourselves when planning for national or regionally focussed projects, but

we apply a more demanding internal forecasting process compared to the PIA contract. Openreach

requires much greater granularity and a longer view of all its operational activities, as it needs to forecast

all major products and operational field led activities by region for the whole of the UK. Therefore all

major operating expenditure and capital programmes (Local Loop Unbundling (LLU), Wholesale Line

Rental (WLR), Ethernet, Fibre First, and BDUK etc.) will be subject to a detailed five year overview as part

of its Medium Term Plan (MTP).

42. This is why we need PIA customers to engage with Openreach ahead of their demand impacting

Openreach (especially for Openreach provided Network Adjustments) in line with the agreed PIA

forecasting requirements and process30 to ensure alignment of Openreach and external civils partners

resources across all activities we are responsible for delivering.

43. This is particularly important to enable us to provide a quality service and a failure to deliver to a Service

Level Agreement (SLA) on our, or our external contractor’s part, means that Openreach may be liable to

make a Service Level Guarantee (SLG) payment on PIA or potentially another impacted product. PIA is

not a service where Openreach can forecast demand based on run rate which is more viable for active

services. The PIA customer’s capital investment programme is under the control of the CP, and

Openreach need the PIA forecasts to be matched to CPs investment plans in order to be able to provide

a good quality service and help tailor our service capabilities.

44. Establishing best practice is also very important at this stage of the PIA lifecycle. If significant un-

forecasted demand materialises then it will put a significant strain on Openreach and external suppliers

and that will not generate good outcomes for either party.31 We need to deliver on our obligations, but

it is not unreasonable that a PIA customer has a proportionate incentive not to over or under forecast

to help Openreach resource to an efficient level, especially given the ambition for the PIA product over

the next few years to be a primary regulatory remedy for large regions of the UK.

30 Please see PIA Contract Schedule 2. 31 Also significant over forecasting will result in excess resources being deployed in the wrong locations, which could be equally damaging.

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45. We consider that the terms and conditions relating to forecasting for PIA32 are reasonable and not

disproportionate compared to our own processes, which are far more extensive and demanding, and

cover a much longer time period. We also consider the PIA forecasting requirements to be proportionate

in relation to the obligations and responsibilities which fall on Openreach to make our infrastructure

available and to carry out Network Adjustments subject to SLA/SLGs.

46. As noted above, we recognise that PIA customers may have concerns about Openreach ensuring strict

confidentiality over the forecast information that they supply to Openreach. Therefore, we would be

pleased to provide further information to any stakeholder on the detailed controls we have in place to

ensure that such information is not shared inappropriately in Openreach, and therefore cannot be used

to influence Openreach’s own fibre deployment plans.

3.2 PIA systems

Overview of inventory and ordering systems

47. Openreach has developed a system solution for PIA Customers that is at present based upon a Graphical

User Interface (GUI) solution. The process flow for our internal core fibre product (Fibre to the Premise

– FTTP) is very similar. The diagram below references the flow through the three key design and build

stages.

48. As the product has matured, CPs would like to order PIA via the Portal as well as adding the ability to use

Openreach data in their own mapping tools. To enable this, we have developed an Application

Programming Interface (API) solution that is currently in its infancy.

49. Openreach uses the same system stack as our PIA customers and access the same data tables, although

PIA is limited to the passive infrastructure only, and as such has a dedicated window. The inventory

system (PIPeR), contains both physical infrastructure and active network level information. PIA

customers do not require direct PIPeR access for this reason, instead they view passive infrastructure via

the Openreach Portal and via the API (delivered in 2020/2133). CPs can (i) access Openreach’s physical

infrastructure records to assist their network planning, (ii) order the PIA product, and (iii) record which

elements of the Openreach infrastructure they are occupying. More details of the ordering functions are

32 See PIA Contract Schedule 2. 33 The first ‘drop’ of the API capability took place on the weekend of 18-19 July 2020.

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given below in Sections 3.3 and 3.4. The update process for PIPeR is reliant on upfront manual validation

activity, but synchronises with the presentation layer to PIA Customers (GeoHub and Openreach portal)

in approximately 72 hours.34

Physical infrastructure records from PIPeR feed both the Openreach planning process and PIA systems.

PIA Map Tool system

50. The primary reason why a different system to Openreach’s internal legacy system PIPeR was developed

for PIA customers (apart from PIPeR’s unsuitability as a multi-CP system) was that decoupling it from

Openreach’s legacy system enabled implementation of a tailored PIA system to be introduced much

more quickly and efficiently in 2017, significantly ahead of the WLA obligations imposed in 2018. Thereby

providing significant improvements to the product and enabling efficient and increased consumption of

PIA by CP customers over a year before the WLA final statement was published.

51. This enabled major benefits for PIA customers, making it possible to plan and record network

deployments through on-line access to the PIA Map Tool and a web services interface, in a comparable

manner to Openreach and by accessing the same underlying Openreach physical infrastructure record

information as Openreach planners use, but through a much more flexible and adaptable system. In

summary the new PIA system:

enabled PIA customers to download and import network data into their own GIS network planning

tools;

provided estimated capacity information for spine duct calculated from Openreach’s inventory

systems which was presented in a suitable format to enable PIA customers to estimate duct

availability and;

included relevant duct, pole, joint box and manhole information at a sufficient level of granularity

for planning, ordering and billing, with the required physical attribute and network code information

to speed up planning, ordering and billing.

52. As set out above, the separation of the PIA system development from the legacy PIPeR system has

already enabled a significant number of other developments to be progressed with PIA customers and

the OTA through the Passives Industry Working Group (PIWG). These systems developments could only

have been this reactive to PIA customers’ needs because they did not impact Openreach’s legacy PIPeR

system.

53. Over time the functionality of the different systems has also been more closely aligned on some key

items. In particular, the browsing capability of the PIA system was increased from a 1km2 window to a

5km2 area enabling CPs to view, and whilst on-line, move around the map display to view large areas of

infrastructure to assist CP planning. Additionally, CPs can now download Openreach infrastructure

information via multiple 1km2 sections which can be automated to build up whole city databases (or

larger) in CPs own geospatial systems. Whilst currently Openreach planners do have the capability to

34 Physical infrastructure which is still in the planning or build stage is not passed to the PIA Map Tool system until it is formally handed over to Openreach and forms part of its physical infrastructure inventory.

PIPeR system Openreach’s physical infrastructure (duct, pole &

underground chamber) records are held on the PIPeR system.

Openreach Fibre Planners Fibre planners access inventory records via the PIPeR interface.

PIA Map Tool system PIA customers access PIPeR inventory records via the PIA Map Tool system.

Issue 5 – 03/08/2020 16 of 41

pan across and view the whole of the UK without limitation via the PIPeR interface, they typically do not

do so, as their work tends to focus on specific deployment areas. Therefore we do not currently have

such functionality in scope for PIA systems development. However, should we identify that it is causing

CPs issues, then it is something that we could consider as part of a future development.

54. At this time, Openreach planning information is not passed from PIPeR to the PIA system. This is primarily

because the PIA obligation does not apply to planned physical infrastructure that has not yet been built

by the site developer or been handed over to Openreach. In these circumstances it would not yet form

part of Openreach’s infrastructure (even if it has been constructed).35

55. In relation to new sites, we recognised that delays in updating PIPeR inventory data on completion (or

partial completion) of infrastructure build was causing issues for CP planning. Hence we have introduced

a new process for PIPeR which enables early phases of fibre new site infrastructure,36 when built and

handed over to Openreach, to be flagged as built on our inventory systems, triggering that phase of

information to be automatically updated on the PIA Map Tool system (i.e. prior to the whole site being

built, signed-off and handed over to Openreach).

The Openreach PIPeR system

56. Openreach’s planners use the PIPeR interface to access physical inventory information in the same way

as PIA customers use the PIA Map Tool system, and in broad terms the operational activities carried out

by Openreach planners are the same as those carried out by PIA customers (please see further details in

Section 3.3 below).

57. At this time, PIPeR is integral to Openreach’s operations and processes across all networks and

products.37 However, in-line with PIMR regulation and guidance, we are committed to reviewing all

future platform developments as they occur, including potential replacements for PIPeR, and ensuring

we continue to meet our regulatory obligations on a forward looking basis.

58. These future developments will require careful consideration of PIA customers’ and Openreach’s needs,

as even for a relatively recent and new development such as the PIA Map Tool system the requirements

and priorities of PIA customers at the time were different to those of Openreach.38

3.3 The Order/Notice of Intent (NoI) Process

3.3.1 PIA Customer Process

Background

59. Please note that the ‘Order/NoI process’ was previously part of a process that was referred to as the

‘Reservation process’, and this has led to some confusion with stakeholders, as it did not confer any

formal space reservation rights. Rather it denoted potential future occupancy of infrastructure by the

PIA customer which could then be taken into account by other PIA customers when assessing physical

infrastructure availability and also by Openreach’s physical infrastructure planners. Access to

infrastructure capacity operates on a ‘first come, first served’ basis for everyone including Openreach

and there is no formal reservation.

60. Therefore the order process is now referred to as the Notice of Intent (NoI) process as it describes the

PIA customer’s order for, and intention to occupy space in, or on, a particular section of Openreach’s

35 The WLA final statement concluded that Openreach does not have an obligation to publish its planning information – ‘WLA Statement Volume 3 – paragraph 6.353’. 36 Further work is continuing to address any new site record backlog and copper related processes are also being reviewed. 37 The potential complexity and cost of unravelling these processes within Openreach was recognised in the WLA Final Statement. Please see Volume 3 - paragraph 3.39, and PIMR Final Statement paragraph 4.77. 38 PIA customers were looking for a multi-CP system enabling electronic access to, and download of specific physical layer information, plus automation of the ordering process to link into their own planning, inventory and ordering systems. However, Openreach is a national operator providing all products and services and therefore needs to access integrated nationwide inventory information for all technologies and at all layers of the network architecture (both physical and active). Also there was no requirement for Openreach to develop or operate an internal physical infrastructure ordering or billing capability.

Issue 5 – 03/08/2020 17 of 41

physical infrastructure, although the space is not formally reserved. Following a NoI order, the CP is then

able to confirm and amend their NoI order records once they have installed their equipment and

completed their build (i.e. the ‘build complete’ process). Additionally, PIA customers can now survey the

network without first placing an NoI order as part of the new ‘Bulk Whereabouts’ solution deployed on

21 February 2020. Openreach does not use the NoI process and this is explained further below.

PIA Process

61. When a CP chooses to use Openreach’s physical infrastructure as part of its network deployment process

(i.e. purchase the PIA product):

• It will combine information about Openreach’s physical infrastructure with information about its

own physical infrastructure, and then add its cabling and equipment design to produce a

deployment plan.

• Only the PIA customer knows its plan, and therefore what equipment it will be deploying and at

what locations in the Openreach physical infrastructure and/or its own infrastructure. Openreach

is unable to gather this information and therefore requires it to be provided by the PIA customer

to Openreach. The information is required so that:

o Openreach can produce an accurate bill for PIA usage.

o There is an accurate record of the locations where Openreach can expect ‘Whereabouts’

notices when the PIA customer is operating in the Openreach network for security, quality

and health and safety reasons.

o Openreach knows where the CP’s equipment will be located in its infrastructure. The records

need to be easily accessible by Openreach so that it can contact the equipment owners at

times of emergency, or for re-planning and other network rearrangement projects.

• The core purpose of the NoI order process is to fulfil the needs set out above (i.e. for the PIA

customer to accurately record the inventory of Openreach physical infrastructure it is using as

part of its network deployment plan).

• PIA customers are required to provide this information when they place their NoI order, but they

are able to amend their NoI order where they deviate from the original route for a variety of

reasons (e.g. poor records, route congestion, to avoid blockages etc.) with no penalty as these

would be legitimate operational reasons. They are required to inform Openreach of the deviations

by amending their NoI order to ensure the Build Complete record is an accurate representation of

the Openreach infrastructure they have used.39

• In summary, the PIA Map Tool system is the CP interface that Openreach specially developed to

allow multiple PIA customers to plan and place NoI orders and record their usage of Openreach

physical infrastructure.

3.3.2 Openreach Process

62. Openreach planners do not use the Order/NoI process as they do not access or use the PIA Map Tool

system. This is because although Openreach planners do need to carry out the same functions as a PIA

customer, they already use the existing Openreach inventory system (PIPeR) to source and record the

relevant Openreach information. Broadly the relevant design steps are:

Assess available Openreach physical infrastructure - this is taken from PIPeR, the same as the

source data for the PIA Map Tool system.

Construct a network design (equipment and cabling etc.) – both Openreach and PIA customers will

have their own processes and practices for doing this.

39 If the CP encounters infrastructure which they believe belongs to Openreach but is not recorded on the PIA Map Tool then they must follow a Missing Inventory Process to ensure; (a) that it does belong to Openreach; and (b) that the inventory records are updated to reflect the asset.

Issue 5 – 03/08/2020 18 of 41

Record the information in an inventory system – Openreach inputs this information into the PIPeR

system where its network design (i.e. equipment & cabling etc.) and usage of its physical

infrastructure is held. In comparison, PIA customers will hold their own detailed network design

information locally in their own systems (i.e. not on the PIA Map Tool system), but they also need

to record their usage of Openreach’s physical infrastructure on the PIA Map Tool for the reasons

explained above.

63. Additionally, Openreach imposes similar obligations on its own contractors in terms of ‘whereabouts’

information, so that we know where they are building and when and Openreach tracks the location of

its own personnel which is recorded in Openreach’s operational systems. This information is required

for health and safety, security, quality and audit purposes.

Summary

64. The PIPeR system was not designed as a multi-CP system and cannot be used by multiple CPs to record

their usage. Therefore the PIA Map Tool was specifically developed to provide the interface for multiple

CPs to be able to plan their potential use of Openreach infrastructure, and after completing their network

build, to feed their actual PIA usage data back into Openreach (via the Build Complete process) for the

reasons set out above.

65. Openreach carries out the same network functions as the PIA customer, using the same physical

infrastructure source data (i.e. from PIPeR), but does not record billing or location information on the

PIA Map Tool. This is because it is not required for ordering and billing purposes, and would be a

duplication of the activities already carried out and the information already recorded by Openreach in

its PIPeR system.

3.4 The Build Complete Process

PIA Customer Build Process

66. Following on from the NoI order process, the Build Complete process is a key stage in the overall PIA

ordering framework. As explained in Section 3.3 above, a PIA customer is required to place an initial NoI

order with Openreach for PIA before they install any equipment in Openreach’s physical infrastructure,

but once they have completed the installation of their network, they are required to submit a Build

Completion Pack to Openreach. This is the finalised NoI order, inclusive of any changes the PIA customer

may have needed to make to their original NoI information whilst they were building their network.

67. In the context of the PIA product, the function of the build period and Build Complete process is to

support the formal contractual relationship established between the PIA customer and Openreach, so

that the CP can legally occupy Openreach’s physical infrastructure and consequently pay the appropriate

regulated charges for its usage. Therefore, as Openreach does not contract with itself, there is no simple

internal analogy for the contractual Build Complete process.

68. Once a CP has notified Openreach that it has an intention to access Openreach physical infrastructure

via the NoI order process and they provide their whereabouts, they are free to start placing equipment

in the infrastructure and occupying space. They have no obligation to pay for the occupancy40 at this

stage even though they may have already taken up significant space in the physical infrastructure and

potentially connected some customers.41 Therefore, there needs to be a reasonable control placed

around this process to prevent unpaid and open-ended occupancy of Openreach’s physical

infrastructure by CPs. The Build Complete process is the trigger point at which CPs are required to start

paying for their occupancy.

40 The original method of charging for ‘reservations’ was intended to overcome this anomaly. 41 CPs do need to submit a monthly lead-in report for customer connections and billing for the lead-in will commence on the connection date they provide.

Issue 5 – 03/08/2020 19 of 41

69. The overriding principle is that whenever live services are provided by the PIA customer then Openreach

should also be enabled to charge for the use and occupancy of its infrastructure. This principle is

supported by the contractual build period and the Build Complete process, as these are the key controls

which establish the contractual relationship for the PIA customer to legally occupy Openreach’s physical

infrastructure, pay the appropriate regulated charges for its infrastructure usage, and consequently sell

its services.

70. This is also why Openreach restricts the ability of a PIA customer to indefinitely extend an NoI order, as

this would enable CPs to occupy Openreach infrastructure indefinitely without paying for it, and/or

without informing Openreach of which parts of the network they have occupied or not. Therefore, the

contract also maintains Openreach’s right to require CPs to remove their equipment in these

circumstances.

71. Broadly, the CP chooses the size of the NoI, the time and rate at which they build, and the point at which

they offer live services to end-users (e.g. after full Build Complete takes place or via the monthly

customer connections lead-in report). The initial build period for a PIA NoI is currently set at 12 months42

and as part of the PIA Day 2 programme43 we have now developed the system capability to extend by

two additional 3 month periods up to a maximum of 18 months where it is necessary because the CP

encounters matters beyond its reasonable control which prevents it from completing its build.44 In such

circumstances, the customer is required to inform Openreach of the reasons for the delay or the build

period will expire at the 12 month limit.

72. Some recent changes have been made to the PIA product with regard to the Build Complete and billing

process. We now permit PIA customers to connect up end-users prior to submitting a build completion

pack as long as these connections are reported to Openreach as part of the monthly build report set out

as part of the forecasting requirements on a monthly basis. We are also assessing a further systems

development to support partial build complete recording (i.e. the ability to complete a sub-part of a

larger NoI order). This may be delivered in the next financial year (subject to funding). In the interim PIA

customers can continue to connect up customers prior to submitting their final build report but must

report customer connections on a monthly basis (in the ‘lead-in’ and monthly build reports).

73. The Build Complete process is also fundamental to the calculation and linking of Network Adjustment

funding (whether Openreach provided or self-provided), where Openreach can only fully reconcile

financial balances and liabilities on receipt of the build completion notifications from CPs.

74. There is currently a system limitation of 1500 items within an NoI order on the PIA Map Tool. This was

not viewed as an operational constraint at the time the PIA system was originally implemented. However

we have now delivered the systems capability which provides PIA customers with the ability to create a

‘project’ and associate a number of NoIs within it, thereby enabling customers to benefit from a ‘pooled’

Network Adjustment fund (in-line with PIA contractual terms and conditions). This will effectively

increase the aggregate limit for a group of NoIs enabling an order to address circa 100k premises passed.

In addition, we are continuing to discuss other longer term requirements with stakeholders.

75. These developments have added greater flexibility to the product, but a Build Complete process of some

form does still need to be in place for the reasons set out above. The correct incentives and controls are

necessary so that PIA customers submit accurate Build Complete notifications, as only then can

Openreach have any proper view of what is actually ‘in’ or ‘on’ the Openreach network and where it is

located, and align PIA customers’ ability to sell end-customer services, and Openreach’s right to bill its

regulated access charges.

42 This was changed prior to publication of the 1 April 2019 reference offer following stakeholder feedback. It was previously 6 months. 43 Day 2 refers to a series of product, systems and process developments we worked with stakeholders to implement during 2019/20. 44 This functionality was delivered in release R4150 in September 2019.

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76. As and when new systems developments and processes are agreed with industry these will be reflected

in a revised version of the PIA IRO.

3.5 The Network Adjustments Process

3.5.1 PIA Network Adjustments

Background

77. The PIA product provides for PIA customers to order Network Adjustments from Openreach. These are

a range of network and civil engineering activities which are available where necessary to repair or

relieve congestion in existing Openreach physical infrastructure. For a Network Adjustment to qualify as

a legitimate request it has to be a necessary, feasible and efficient adjustment.45

78. This includes typical activities such as repairing a length of damaged duct to make an existing duct route

suitable for new network installation by removing a blockage, or replacing a pole which has been

classified as unusable46 because it is considered unsafe to add any additional dropwires or equipment to

it.47

79. For qualifying underground adjustments Openreach is responsible for funding a proportion of the cost

up to the financial limit,48 and for qualifying overhead adjustments no financial limit is currently applied.

Many Network Adjustments can be carried out by the CP itself, or by Openreach.49 Openreach is also

exploring whether the scope for CP self-provided orders (SPO) can be increased (for example moving the

Bass step or certain redundant equipment).

80. This means there are three key aspects to the Network Adjustment process:

a) If Openreach is paying for the Network Adjustment, whether directly or paying the CP (Self

Provide Order) then there is a need for Openreach to validate that it qualifies as a valid Network

Adjustment.50

b) The validation process needs to be efficient and timely, but also provide sufficient information

to enable PIA customers to make informed deployment decisions.

c) In all cases Network Adjustments should be carried out efficiently and completed in a reasonable

timeframe.

81. Our Network Adjustment processes for the PIA product are designed to meet all these objectives.

Further, as explained in Section 3.6, we are also committed to producing and sharing Key Performance

Indicators (KPIs) and service performance metrics with PIA customers and wider stakeholders to provide

evidence that the validation process is operating efficiently, and that there is no undue discrimination

taking place in the validation and delivery of Network Adjustments.51

82. It is challenging to map Openreach’s internal activities exactly onto the external Network Adjustment

ordering and validation process,52 as Openreach has a variety of operating models and is also in the

process of standardising its approach to fibre programmes and reorganising how work is shared between

its Chief Engineers (CE), Fibre Network Delivery (FND) and Service Delivery (SD) teams. However, for its

45 Please see paragraphs 2.31 to 2.93 ‘WLA Market Review: Statement – Volume 3 – PIA remedy’. Ofcom also set a range of other criteria which a network adjustment must fulfil. Also see paragraphs 5.87 to 5.123 of the PIMR final statement. 46 Openreach has a major pole testing and safety programme which identifies defective poles and assigns them a ‘D pole’ classification. In broad terms this means that (i) some poles are usable but cannot be climbed, (ii) some are usable but need to be replaced over the next two years, and (iii) some are not usable and need immediate replacement. 47 Even with the use of specialised overhead equipment such as hoists or mobile platforms. 48 This is £4750 per kilometre for UG and non-dropwire related OH adjustments. 49 PIA customers can also order Ancillary Services from Openreach for which they pay a cost oriented tariff. 50 That means, amongst other factors, that the Network Adjustment is necessary, feasible and efficient. But also sufficient to satisfy wider UK corporate governance rules and other applicable regulation such as Sarbanes Oxley. 51 Please see Section 3.6 and Annexes A and B for further information on these points. 52 This also makes it difficult to map internal and external KPIs, but we are working with stakeholders to find the best comparators (section 3.6).

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Fibre First programmes Openreach primarily controls its civils costs in two main ways. Firstly, by carrying

out significant survey activity and pre-validation of any civils work required (including Network

Adjustments) for deployments before commissioning the build work. And following this phase,

maintaining very tight controls on any additional work identified by contractors or direct labour in the

build phase through additional control processes53 to continue to drive out unnecessary civils costs.

83. In summary we view an appropriate PIA validation process as a proportionate and pragmatic way to

ensure that PIA customer Network Adjustment costs are controlled in a similar way to Openreach’s civils

costs. Where possible, we have identified Openreach activities which are similar to the PIA product, and

set out the key elements and comparisons of the PIA process and Openreach’s internal processes below.

PIA Process

84. The process set out in the current reference offer (1 August 2019) includes an SLA for completing the

Network Adjustments validation process prior to work being carried out. This process is required to

provide the correct corporate governance and contractual controls around complex and expensive civil

engineering processes. The Network Adjustment validation period, subject to the terms of the reference

offer does not reflect the ‘time to verify’ for each individual order but rather helps to define the point

after which SLGs may become payable. Therefore, the ‘time to verify’ SLA has to be clear and

unambiguous in the contract as it is used to define a contractual SLA and a potential consequential

liability for an SLG payment.

85. Also, the more accurate and specific the forecasts that PIA customers are able to produce, and the

further in advance that CPs can provide them to Openreach, then the greater the capability Openreach

will have to help assign specific resource to support the CP and to be ready to verify and/or progress

Network Adjustments.

86. Multiple tasks need to be carried out in the verification stage of the Network Adjustment process, and

in this light the current 5 day period SLA does not seem excessive, and may in fact be challenging, given

the number of activities that need to be completed. Table 4 below summarises the tasks that need to be

carried out:

Table 4: PIA Network Adjustment Approval Process

1) Check the Network Adjustment order contains all of the information it should have and is accurate.

2) Identify whether the order type qualifies as a valid Network Adjustment.

3) Investigate the method to resolve, which may involve organising and completing a field visit (e.g. is it a

simple repair or major replacement).

4) Produce a quotation for the PIA customer – i.e. does the cost fall within the financial limit or not, and

therefore what will the CP be liable to pay. If the CP wants to carry out the adjustment as a self-provide

order (SPO), then Openreach’s quotation will state what it is prepared to pay the CP to complete the job.

5) Set an initial delivery date, the customer committed date (CCD).54

87. Following the provision of the information, the PIA customer chooses whether to proceed with the order

or not. We also aim to ensure that the PIA validation process is as efficient and timely as possible and

53 Primarily the Departure from Estimate (DFE) process. 54 The process for setting a ‘final’ CCD is undergoing changes at this time. Openreach is implementing changes to its processes resulting from the introduction of its new Openreach Network Service Agreement (ONSA) and this will mean there is a further step outside of the 5 day validation period where the Openreach civils partner assesses and commits to a final delivery date (a final CCD) should the PIA customer require Openreach to complete the network adjustment.

Issue 5 – 03/08/2020 22 of 41

therefore have introduced a flexible approach to meet PIA customers’ needs and capabilities. Broadly

our PIA validation processes operate as follows:

• Firstly, we have tailored the network validation process so that certain tasks can be carried out

more quickly than others. For example, this means that many overhead (OH) related adjustments

are possible to authorise without a field visit when the correct level of information is provided by

the CP. However, other adjustments, particularly underground (UG) tasks are more complex to

assess visually (and may also require additional activities such as road closures for example to be

taken into account). Therefore, more extensive validation will be required. Also, we will need to

work with PIA customers as the product matures to develop means of managing unavoidable

delays to field validation. Please see Annex A where further details of the adjustment types and

approach to validation is set out.

• Secondly, we have introduced a ‘Path to Collaboration’ process to enable PIA customers to take

more control of the Network Adjustment process by working with us collaboratively to evidence

that they are carrying out the required verification checks themselves, whilst also enabling us to

maintain due diligence over Network Adjustment requests (i.e. ensuring they are actually

necessary). Please see Annex B of this document where an overview of the ‘Path to Collaboration’

process is set out. Further details will be added to this IRO as the programme is developed with

stakeholders.

3.5.2 The Openreach Process

88. As noted above, it is difficult to map our internal activities exactly onto the external Network Adjustment

ordering and validation process as Openreach actively controls civils costs on its own related

programmes in two ways. Firstly by surveying and pre-validating the civils work required in our

programmed deployments (some of which would be classified as Network Adjustments). And secondly

by maintaining controls on any additional work identified by contractors or direct labour after the initial

planning stage (i.e. in the build process).55 We also apply civils avoidance techniques to minimise costs.

This is why we need to ensure a similarly robust validation of PIA orders.

55 Primarily the Departure from Estimate (DFE) process.

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89. As noted above, we are still working towards standardising internal processes56 but broadly our Fibre

First plan and build, and control processes operate as follows:

Fibre First – illustrative plan and build, and Network Adjustment (NA) process

90. In broad terms we operate an approval process for all civils required (including Network Adjustments)

either before confirming the job with a contractor or later when a new requirement is identified to help

ensure that costs are only incurred where truly necessary. This has also led us to develop a range of civils

avoidance techniques.57

91. The terms and conditions relating to Network Adjustment validation for the PIA product are intended to

be proportionate and reasonable and not unduly discriminatory, and to introduce similar incentives for

cost control compared to Openreach’s own internal cost control processes. Such checks are necessary

and proportionate in relation to the significant obligations and responsibilities which fall on Openreach

to provide Network Adjustment pricing information and/or to carry out adjustments given the direct

impact of CP requests for Network Adjustments on Openreach’s cash flows and capital budgets.

56 It is our intention to add additional information to this section as Openreach Fibre First processes are further developed and documented; and if required, should implementation of engineering partner agreements impact current work processes. 57 Which we have already shared with PIA customers at the PIWG and would expect them to employ in their own network build as required.

Target location is selected by Openreach Strategy team.

Fibre planning team draw up a draft plan for the deployment (referred to as the ‘ghost plan’). This is primarily based on the fibre architecture specified in Openreach Chief Engineers (CE) models,

using existing network records and address data. The CE team will also adjust the plan prior to the survey step based on logic and validation checks carried out on the data.

CE/FND team conduct field surveys of physical infrastructure covered by the ghost plan to verify its accuracy, using the Orion application to capture any changes. Typically the survey includes:

visual inspection of Overhead (OH) infrastructure and

physical inspection (including rodding and roping) of Underground (UG) infrastructure.

Using the verification information from the survey, the CE/FND teams amend the ghost plan to produce a final plan. This includes all amendments identified to the ghost plan, representing a list

of all civils activity required to build the fibre network (including those classified as Network Adjustments).

The final plan is placed with contractors for delivery. All Network Adjustments have been pre-validated. Contractors have approval to work to plan unless there is a Departure from Estimate

(DFE).

Contractors have to seek approval from the CE/FND team (via A55) to any DFEs (i.e. build or Network Adjustment changes). The default position is that the CE/FND team need to approve all

DFEs, although in exceptional circumstances a contractor may be given verbal permission to proceed at risk.

If DFE is rejected - then contractor does not carry out job. If DFE is accepted – then job is placed in civils queue. Fibre First jobs are treated with the same

priority as a PIA Network Adjustment.

This planning process is highly variable depending on the target area, but is typically measured in months. Hence there is no easily identifiable ‘time to validate’ for a single civils task. The Openreach approach to planning and pre-validating civils (including NAs) reduces the impact of civils validation activity on the critical path for network build.

These plans use a snapshot of the PIPeR physical infrastructure data at the start of the planning process (i.e. the same source data available on-line to PIA customers via the PIA Map Tool).

As part of the internal DFE process newly identified jobs need to be approved to ensure they are necessary, then estimates are produced and placed with a contractor or direct labour for delivery. We are continuing to explore whether comparative KPIs for the validation process could be developed using this process. At this time we have focussed on the Ethernet ECC process for the KPI comparator.

Issue 5 – 03/08/2020 24 of 41

92. Therefore, in summary:

• We carry out extensive planning and pre-validation processes as part of our Fibre First

programmes to survey and validate prospective civil engineering requirements. These result in a

final plan which contains multiple jobs including some which will fall within Ofcom’s definition of

Network Adjustments58. The work is then placed with civils partners based on the estimates

raised, and the work then proceeds unless there is a divergence from the plan.

• The initial controls are reinforced by additional processes to deal with new works identified after

the final plan stage (and its associated work packages and estimates). This is referred to as the

departure from estimate (DFE) process. All new requirements have to be raised via the A55

process in a similar way to an external PIA Network Adjustment, and internal approval and

estimation processes also need to be carried out. If the job is approved it will be placed into the

work stack and treated with the same priority as a PIA Network Adjustment

3.6 PIA Key Performance Indicators (KPIs)

93. In addition to the control processes identified for Fibre First and PIA Network Adjustments, we also

produce a number of PIA Key Performance Indicators (KPIs) which cover a range of PIA and Openreach

related activities to ensure that:

• The performance of the PIA product and associated Network Adjustments are efficient and timely.

• To provide comparative information and transparency with regard to PIA product processes and

Openreach’s internal processes, so that stakeholders can also validate Openreach’s obligation not

to unduly discriminate in terms of results and outputs.

94. Additionally, given the challenges in mapping complex internal Openreach processes exactly to the

external PIA Network Adjustment process, we are committed to continuing discussions with

stakeholders to build on the current approach to KPIs to find the most comparable internal and external

statistics for the longer term and share these with stakeholders as they become available.

95. The existing KPIs broadly split into two groups (i) PIA Service Performance and (ii) PIA Openreach

Comparator data. The PIA Service Performance reports are primarily used to assess the level of

performance of the PIA product, and the PIA Openreach Comparator KPIs (using additional Openreach

operational data) are used to enable a comparison between PIA product performance and Openreach’s

internal processes to assist in monitoring compliance with Openreach’s no undue discrimination (NUD)

obligation (see Table 5 below). These are now produced on the following basis:

58 But which could also include ancillary activities and new build which would not be classified as a network adjustment.

Issue 5 – 03/08/2020 25 of 41

Table 5: PIA NUD KPIs

KPI Description PIA Service Openreach1 Granularity &

Frequency

Mean Time to Provide

Mean time for the provision of a Network Adjustment.

Duration - PIA actuals (only

including those completed by Openreach)

Duration of Openreach Estimates that contain WAUs (Work Allocation Units) that are comparable to PIA Network Adjustments and are allocated to Openreach Fibre Build programmes

PIA – monthly Openreach – quarterly, by type and by area

Performance vs. CCD

Success rate against final date given for the completion of a Network Adjustment.

Percentage success rate against final

Customer Confirmed Date

– PIA actuals.

Percentage success rate against Required By Date for Openreach Estimates that contain WAUs that are comparable to PIA Network Adjustments and are allocated to Openreach Fibre Build programmes

PIA – monthly Openreach – quarterly and by area

Time to Verify

Time taken to verify whether a Network Adjustment is necessary and respond to CP.

Duration - PIA actuals.

Duration of time taken to verify an Ethernet Order submitted by a CP. From time order received until costs and target completion date are sent back to the CP.

PIA – monthly Openreach – quarterly and by area

NA Request Verification Spread

Time taken to verify whether a Network Adjustment is necessary and respond to CP – spilt into 2, 4, 6 and 10 day buckets.

Duration - PIA actuals.

Duration of time taken to verify an Ethernet Order submitted by a CP. From time order received until costs and target completion date are sent back to the CP.

PIA – monthly Openreach – quarterly and by area

Invalid Network Adjustments

The volume of CP submitted Network Adjustments that are rejected during verification.

PIA actuals.

Openreach Estimates that contain aborted or cancelled WAUs that are comparable to PIA Network Adjustments and are allocated to Openreach Fibre Build programmes.

PIA – monthly Openreach – quarterly and by area

Note 1: We are continuing to work with stakeholders to refine the comparator measures, and the IRO will be updated as/when they are available. We also need to work with stakeholders to manage and potentially adjust metrics to take account of scenarios outside of Openreach control (e.g. to avoid cases where NAs remain open indefinitely and accrue and inflate MTTP).

96. The PIA Service KPIs are shared with Ofcom monthly and quarterly. They are also shared with the PIA

Customers Closed User Group quarterly on the 15th working day of the month following the quarter

end. These can be accessed from the “My Dashboard” area of the PIA customer website. They will be

subject to ongoing review and further developments are anticipated with new KPIs added to this report

as and when they become available.

97. The Openreach comparator KPIs used to demonstrate no undue discrimination, are published quarterly

and shared with Ofcom and the PIA Customers Closed User Group on the 15th working day after the

end of each quarter. This means that prior to submitting a Network Adjustment request, CPs will be

able to see typical lead times for each of the main Network Adjustments within each of the 25

forecasting regions.

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98. Considerable work has been carried out to identify suitable data to produce the Openreach comparator

measures.

(i) For the ‘Mean Time to Provide’, ‘Performance vs. CCD’ and ‘Invalid Network Adjustment’ measures

the Openreach Fibre Build process is used as a comparator. The data uses Openreach Estimates that

contain WAUs (Work Allocation Units) that are comparable to PIA Network Adjustments and are

allocated to Openreach Fibre Build programmes. The Time to Provide is measured from the date an

Estimate is authorised until the date the work is completed. The ‘Performance vs. CCD’ percentage

measure uses the Estimate Required by Date vs. the Work Completion Date. The percentage ‘Invalid

NA’ measure uses the percentage of Estimates with aborted or cancelled WAUs.

CP finds problem with infrastructure and submits a Network Adjustment

PIA Network Adjustment

Openreach conducts assessment (desk and/or field) to ensure it’s

necessary and appropriate

If it is necessary, Openreach approve then plan the build and provide CP

with costs and CCD

Openreach review the Network Adjustment to ensure it is raised

correctly and data is accurate

CP confirms that they want Openreach to go ahead with the work

Openreach create job packs and submit ‘Estimates’ to engineering

teams to carry out the work

The work to resolve the problem is completed

CP is notified of the work completion

Network build is planned

Openreach Fibre Build

Job packs are created with RBD (Required by Date)

‘Estimates’ are created, authorised and allocated to engineering teams

Surveys are completed to capture the details of work required

When work is completed the

‘Estimate’ is given a work end date

The ‘Estimate’ is closed The Network Adjustment is closed

The work is carried out

Issue 5 – 03/08/2020 27 of 41

(ii) For the ‘Time to Verify’ and ‘NA Request Verification Spread’ the Openreach Ethernet order process

is used as a comparator. The Ethernet order journey has desk-based and field-based survey

activities. The ‘Time to Verify’ is measured from the time the Ethernet order is placed until the date

the customer is given cost and date information.

CP finds problem with infrastructure and submits a Network Adjustment

PIA Network Adjustment

Openreach conducts assessment (desk and/or field) to ensure it’s

necessary and appropriate

If it is necessary, Openreach approve then plan the build and provide CP

with costs and CCD

Openreach review the Network Adjustment to ensure it is raised

correctly and data is accurate

CP confirms that they want Openreach to go ahead with the work

Openreach create job packs and submit ‘Estimates’ to engineering

teams to carry out the work

The work to resolve the problem is completed

CP is notified of the work completion

Order placed and auto-acknowledge

Openreach Ethernet Order

PPP (Prepare Planning Pack) Plan proposed solution including

timescales and costs - at desk

Field Survey (if required)

PNR (Pre Network Review) Check the customer, site info and

request details are correct - at desk

Work to provide the service is carried out

The service is commissioned The Network Adjustment is closed

Solution designed and planned

Customer is sent costs and provisional target delivery dates

Issue 5 – 03/08/2020 28 of 41

99. The KPIs have been developed with significant engagement with stakeholders. The timeline and key

steps are summarised below:

Feb 2019 - Work started on first 3 NUD measures – Mean Time to Provide (MTTP), Time to Verify and Performance vs CCD%.

Openreach comparator measure timeline

April 2019 - Q4 MTTP report published. First iteration of Time to Verify comparator logic drafted and agreed.

Mar 2019 - First iteration of MTTP comparator logic drafted, validated and agreed.

May 2019 - Additional measures requested by Ofcom – Average Build Rate, New Sites Availability, Invalid Network Adjustments, NA Request Verification, Pole-Top Survey, Defect Responsiveness.

June 2019 - PIA KPI session delivered to Ofcom, OTA and industry at the June IWG.

August 2019 - First iteration of Invalid Network Adjustments comparator logic drafted, validated and agreed.

July 2019 - Q1 report published with MTTP, Performance vs CCD% and Time to Verify measures.

September 2019 – MTTP measure logic refined.

October 2019 – Q2 report published with MTTP, Performance vs CCD%, Time to Verify measures and Invalid Network Adjustments. Refined MTTP measure logic shared at the September IWG.

January 2020 – Q3 report published with NA Request Verification added. Call held with CPs to discuss Average Build Rate and Pole Top Survey.

November 2019 – MTTP logic finalised.

February 2020 – Update email sent to CPs with new MTTP NA categories (aligned to orderable items).

April 2020 – Q4 report published with MTTP, Performance vs CCD%, Time to Verify measures, NA Request Verification and Invalid Network Adjustments.

July 2020 – Work ongoing with Ofcom, OTA and Industry to find suitable comparator measure for Pole Top Survey and Average Build Rate.

Issue 5 – 03/08/2020 29 of 41

100. Table 6 below illustrates the format of the summary comparison which is produced on a quarterly basis

when publishing the comparator KPIs throughout the year. The comparison data relates to Openreach

completed NAs and not self-provide orders (SPOs) carried out by PIA customers.

Table 6: Four Quarterly Reports per annum (Q1, Q2, Q3, Q4)

Network Adjustment NUD KPI PIA Openreach Comparator

Network Adjustments completed X Y

Mean Time to Provide (working days) X days Y days

Performance vs CCD% X% Y%

Time to Verify (working days) X days Y days

Invalid NAs % X% Y%

101. The results are regularly updated and are made available to stakeholders on the Openreach Customer

Information website at:

https://www.openreach.co.uk/orpg/customerzone/collaboration/viewProject.do?data=ftBVyN%2FHgM

A5X90mDsP32bKiHDBgOTbnkEoH%2FisMoKB%2BJVpxgM1nDeBHjA7a15MC3LRGVzizr06dL0QcuuvnTg

EHsWqcPoXERLorrb6o4E4IjlJwY%2B2LJng8DUtMeeaySdxl3elXtLgHKHholPIJRQ%3D%3D

102. The results to date are indicative of a good level of performance for the PIA product and one which is

positive relative to Openreach’s own operations. Currently, Openreach is resourcing its PIA operations

in-line with forecast demand which has not yet materialised, and hence the existing high level of

performance for the PIA product is likely to be due in part to this resource profile. It should be expected

that PIA performance will normalise to some degree to be more in-line with overall Openreach levels

when higher PIA demand materialises and Openreach resourcing levels are matched and optimised for

the medium to long term.

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4. Comparison of PIA legal instrument conditions to Openreach’s usage

1. Standard Elements of the PIA Reference Offer (PIMR Condition 7.2)

Legal Condition Comparison of PIA product to Openreach Internal Usage

a. a description of the network access to be provided, including technical characteristics (which shall include information on network configuration where necessary to make effective use of network access);

Openreach’s services use identical infrastructure components to those offered as part of the PIA product.

A summary product description is given in Section 2 above, and full details of the product can be found at:

https://www.openreach.co.uk/orpg/home/products/ductandpoleaccess/ductandpoleaccess.do

b. the locations at which network access will be provided;

PIA is available at all locations where Openreach has physical infrastructure (subject to survey and obtaining the relevant consents, permissions, wayleave and/or planning consents).

This is the same for Openreach deployments and PIA customer deployments.

c. any relevant technical standards for network access (including any usage restrictions and other security issues);

Openreach applies the same technical standards to all infrastructure whether it is used for Openreach network deployments or a PIA customer’s network deployment.

Openreach also applies specific physical standards to cables (overhead and underground) for both its own and CPs’ installations in order to help minimise damage, interference and to help maintain safety.

d. the conditions for access to ancillary, supplementary and advanced services (including operational support systems, information systems or databases for pre-ordering, provisioning, ordering, maintenance and repair requests and billing);

Due to the different requirements of PIA customers compared to Openreach planners, a more flexible external interface and PIA customer system was developed for use by multiple CPs in 2017. As Openreach does not purchase the individual elements of the PIA product internally it does not use the same external interfaces developed for CPs. Therefore:

Openreach planners use the PIPeR system and its interfaces, and: PIA customers use the PIA Map Tool system.

Most infrastructure level internal work flows are governed and managed by the same systems such as Next Generation Workflow Management Tool (NGWFMT) once any initial engineering activity has been triggered by Openreach or a PIA customer.

Openreach’s civil engineering contractors permit Openreach access to an on-line system which enables direct checking of the status of works, estimated dates etc. For PIA, CPs need to request information from Openreach.

Issue 5 – 03/08/2020 31 of 41

Please see Section 3.2 of this document for more details on systems.

e. any ordering and provisioning procedures; Openreach does not purchase the PIA rental products internally and hence does not raise an internal order for duct or pole occupancy. Please see Section 3.3 of this document for more details.

In so far as possible, all requests for civil engineering work (such as Network Adjustments) will be actioned through the same standard systems and processes for both Openreach’s own use and PIA related work and treated with the same priority. Please see Section 3.5 of this document for more details.

f. relevant charges, terms of payment and billing procedures;

Openreach does not purchase the PIA product internally and hence does not raise an internal charge (other than through the regulatory accounting process), or have terms of payment or produce a bill.

Also processes such as credit vetting which are applicable to an external customer and form part of the contractual terms are not applicable within Openreach as it is a single legal entity.

The new regulatory accounting obligations imposed on Openreach are set out in Ofcom’s Regulatory Financial Reporting final statement published on 12 July 2019, and are also the subject of extensive ongoing work by Ofcom, Openreach and BT.

The resulting Regulatory Financial Statements and the supporting regulatory accounting methodologies will enable stakeholders to monitor the accounting practices of Openreach’s own use of its physical infrastructure as well as in the treatment of the costs of Network Adjustments. Please see Section 5 of this document for further details.

Further work is continuing with PIA customers to implement the settlement process for self-provide orders.

g. details of maintenance and quality as follows:

(i) specific time scales for the acceptance or refusal of a request for supply and for completion, testing and hand-over or delivery of services and facilities, for provision of support services (such as fault handling and repair);

In summary, tasks associated with construction and repair of physical network are carried out by suppliers who are contracted to provide a large array of different services to Openreach. The PIA contract applies the same quality standards to civils work carried out by PIA customers and/or their contractors on Openreach physical infrastructure as we do to our own contractors.

(i) There are no contractual provisions relating to these matters internally within Openreach. Please see Section 3.5 where we discuss the Network Adjustments process in more detail.

Issue 5 – 03/08/2020 32 of 41

(ii) service level commitments, namely the quality standards that each party must meet when performing its contractual obligations;

(iii) the amount of compensation payable by one party to another for failure to perform contractual commitments;

(iv) a definition and limitation of liability and indemnity; and

(v) procedures in the event of alterations being proposed to the service offerings, for example, launch of new services, changes to existing services or change to prices;

(ii) There are no contractual service level commitments internally within Openreach. Please see Section 3.5 where we discuss the Network Adjustments process in more detail.

(iii) There are no compensation schemes internally within Openreach.

(iv) There are no legal liability and indemnity issues within a single legal entity such as Openreach. Strict liability and indemnity clauses apply to external parties placing equipment in Openreach physical infrastructure or carrying out operations on Openreach infrastructure. Openreach applies the same or similar liability and indemnity clauses to its own chosen contractors.

(v) The external PIA product will be subject to the notification periods specified in the legal

annex of the PIMR final statement59 (eg Condition 8 – Notification of charges, terms and conditions). CPs can also request changes to the existing product or new products via the Openreach SoR process60. This is governed by Condition 3 of the PIMR legal instrument. Openreach does not notify itself or issue SoRs to itself, but all changes to its services will be governed by the relevant conditions applied by the appropriate market review final statement and corresponding legal instruments.

h. details of measures to ensure compliance with

requirements for network integrity;

This is the same for Openreach and PIA customer deployments.

All physical infrastructure integrity measures apply equally to Openreach and PIA deployments (e.g. cable breaking strengths, gas testing, pole structural assessments etc.).

ANFP rules apply both to Openreach and to PIA customers.

i. details of any relevant intellectual property rights; Not applicable within a single legal entity such as Openreach.

j. a dispute resolution procedure to be used between the parties;

Not applicable within a single legal entity such as Openreach.

k. details of duration and renegotiation of agreements; Not applicable within a single legal entity such as Openreach.

59 https://www.ofcom.org.uk/__data/assets/pdf_file/0026/154592/annex-26-legal-instruments.pdf 60 https://www.openreach.co.uk/orpg/home/loadStatementOfRequirement.do?data=5VuXDcYvB0NkrRQRrBZRxYyWF5PgOs6bUzF%2BfSrZzmJba5FvEz4krukRuCCbqYkv

Issue 5 – 03/08/2020 33 of 41

l. provisions regarding confidentiality of the agreements; Not applicable within a single legal entity such as Openreach.

m. rules of allocation between the parties when supply is limited (for example, for the purpose of co-location or location of masts); and

All deployments are subject to the same survey rules and dependent on space being available. Effectively allocation is on a ‘first come first served’ basis. Should particular problems arise in future more detailed rules of priority could be developed to address them as part of the PIA product development process (e.g. if the PIA product were to substantially change in specification or volume).

n. the standard terms and conditions for the provision of network access.

Not applicable within a single legal entity such as Openreach.

2. Additional PIA specific elements included in the PIA Reference Offer (PIMR Condition 7.3)

Legal Condition Comparison to PIA product to Openreach Internal Usage

a. the location of Physical Infrastructure or the method by which Third Parties may obtain information about the location of Physical Infrastructure;

CPs have access to a specific system designed to meet their requirements (i) for physical infrastructure information, (ii) to place orders for occupancy and Network Adjustments, and (iii) to maintain an inventory of Openreach infrastructure that they are renting from Openreach.

Physical infrastructure information provided is at the same level of granularly as that used by Openreach planners and sourced from the same system (i.e. PIPeR).

Openreach planners using PIPeR interfaces have the ability to ‘zoom’ in and out of images, and to ‘pan’ to move around images of UK infrastructure. The PIA Map Tool system has been enhanced to enable an ability to pan within a 5km2 area, and CPs can also automate their queries to be able to download city or UK wide data. Please see Section 3.2 of this document for more details on systems.

b. technical specifications for Physical Infrastructure Access including:

(i) technical specifications for permitted cables and associated equipment;

(ii) cable installation, attachment and recovery methods; and

The same specifications apply to Openreach and PIA customer deployments.

Further details are given in the PIA product descriptions, and Engineering Principles documentation (referenced in Annex E of this document).

Quality and workmanship standards and quality accreditation details are common across CPs, Openreach personnel and Openreach contractors.

All physical infrastructure integrity measures apply equally to Openreach and PIA deployments (eg cable breaking strengths, gas testing, pole structural assessments etc.).

ANFP rules apply both to Openreach and to PIA customers.

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(iii) technical specifications relevant when Third Parties elect to undertake repair works on Openreach physical infrastructure;

(iv) technical specifications relevant when Third Parties elect to undertake build works on Openreach physical infrastructure;

c. the methodology for calculating availability of spare capacity in Physical Infrastructure;

CPs are required to use the same rules and principles as Openreach uses and these are applied consistently for both underground and overhead infrastructure.

Openreach also provides an estimated status for availability in duct infrastructure as part of the PIA Map Tool system.

d. procedures for the provision of information to Third Parties about spare capacity, including arrangements for visual surveys of Physical Infrastructure to determine spare capacity;

CPs are required to use the same rules as Openreach uses for surveys and visual inspections, and have the same rights as Openreach to survey both overhead and underground infrastructure.

Openreach also provides additional information on duct usage and estimated spare capacity via its PIA Map Tool system.

CPs also have the similar analytical capabilities via the PIA system as Openreach do via the PIPeR system interfaces, with an ability to ‘zoom’ in on designated geographic areas, pan across infrastructure images and download network record information.

e. conditions for reserving capacity that shall apply equally to Openreach and Third Parties;

Broadly, in terms of access to infrastructure capacity the process operates on a ‘first come, first served’ basis for everyone including Openreach.

The PIA specific approach is now referred to as the Notice of Intent (NoI) order process as it describes the PIA customer’s intention to order and occupy space in, or on, a particular section of Openreach’s physical infrastructure, but the space is not formally reserved. After placing a NoI order, the PIA customer is able to survey and carry out its build, just as Openreach would, and then confirm or amend their NoI records once they have installed their equipment (i.e. at the Build Complete stage).

Openreach does not use the NoI process but uses a similar internal PIPeR based process to record its plans. As stated above there is no reservation of capacity for Openreach (or the CP) as the process operates on a ‘first come, first served’ basis for all users. Please see Section 3.3 of this document for further details of the NoI ordering process.

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f. conditions for the installation and recovery of cables and associated equipment;

CPs are required to use the same rules as Openreach uses.

Openreach may also be required to remove equipment as part of a qualifying Network Adjustment, and under certain circumstances a CP may also have to remove redundant and unused equipment as set out in the PIA Product Description. Please see Section 3.5 for further information on the Network Adjustment process.

g. arrangements for relieving congested Physical Infrastructure, including the repair of existing faulty infrastructure and the construction of new Physical Infrastructure;

CPs are required to use the same rules as Openreach uses.

Openreach may also be required to carry out repair of existing faulty infrastructure and/or very limited construction of new physical infrastructure as part of a qualifying Network Adjustment. Please see Section 3 for further information on the Network Adjustment process.

h. conditions for Third Parties to gain access to the Physical Infrastructure including if appropriate training, certification and authorisation requirements for personnel permitted to access and work in/on Physical Infrastructure;

These are described in the Accreditation Guidelines. They are the same requirements as Openreach uses for its workforce and sub-contractors.

All operatives need to be accredited in the relevant skills to work on the appropriate infrastructure (e.g. overhead working requires very different skills to underground operations).

i. the arrangements for maintenance of cables and associated equipment installed by Third Parties and of the Physical Infrastructure, including provision for the temporary occupation of additional infrastructure capacity for the installation of replacement cables;

CPs are required to follow the processes in the contract and Product Description. These are the same processes as Openreach.

j. conditions for the inspection of the Physical Infrastructure at which access is available or at which access has been refused on grounds of lack of capacity;

CPs carry out their own surveys and have access to all infrastructure, in line with appropriate security clearances, and access to detailed on-line information via the PIA Map Tool system.

CPs are required to carry out surveys in line with the contract documentation. This is the same for Openreach and PIA customer deployments.

k. the information that a Third Party is required to provide to the Dominant Provider where that Third Party is requesting the repair of existing faulty infrastructure and/or the construction of new Physical Infrastructure necessary for the

Openreach validates any required Network Adjustments as part of its own deployments and applies cost controls and civils avoidance techniques to ensure only necessary civils costs are incurred.

Openreach does not subject itself to SLA/SLG arrangements. Please see Section 3.5 for further information on the Networks Adjustment process.

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Service Level Commitments and Service Level Guarantees required by Conditions 7.3B(l) and (m) below;

l. Any reasonably necessary Service Level Commitments including in respect of at least the following:

(i) the provision by the Dominant Provider to a Third Party of a Response Notice;

(ii) the completion by the Dominant Provider of any works necessary to relieve congested Physical Infrastructure including the repair of existing faulty infrastructure and the construction of new Physical Infrastructure other than a congested Pole;

(iii) the provision by the Dominant Provider of a response to a request by a Third Party to undertake works itself to relieve congested Physical Infrastructure;

(iv) the provision by the Dominant Provider to a Third Party of a Pole Response Notice; and

(v) the completion by the Dominant Provider of any works necessary to relieve a congested Pole.

Openreach does not have internal contractual SLAs in the same way as it does with an external Third Party. However we operate similar levels of validation and controls on Openreach’s own civils work as we do for PIA customers’ requests, plus produce KPIs to ensure transparency of internal vs external performance. Please see Section 3.5 for further information on the Network Adjustment process.

m. Service Level Guarantees in respect of the Service Level Commitments specified in Condition 7.3(l) above;

Not applicable within a single legal entity such as Openreach.

n. conditions for the provision of forecasts by a Third Parties in respect of their future requirements for Physical Infrastructure Access; and

Openreach produces very detailed and extensive internal forecasts which look forward over a 5 year window to ensure appropriate availability of resource, funding and prioritisation. Please see Section 3.1 for more details.

o. conditions on which Third Parties may elect to undertake repair or build works on behalf of the Dominant Provider.

Not applicable within a single legal entity such as Openreach.

However same quality standards are applied to Openreach’s contractors as to PIA customers and their contractors.

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5. Regulatory Financial Reporting

103. Ofcom published their statement for the regulatory financial reporting of the physical

infrastructure markets on 12 July 2019.61 In this statement Ofcom have directed BT62 to

introduce PIA reporting to the Regulatory Financial Statements (RFS) in two stages.

Aggregated PIA reporting for the RFS in 2019/20 (due to be published in July 2020)

104. BT are required to report on a new market for PIA which will disclose the total costs of all

physical infrastructure, and present the share of costs recovered from PIA customers and

how much is recovered from BT’s own cable networks.

105. BT will also be required to disclose the value of Network Adjustments (both above and below

the financial limit) carried out on behalf of PIA customers and for work on its own cable

networks.

More detailed PIA reporting for the RFS in 20/21 (due to be published in July 2021)

106. The next stage of reporting is for BT to disclose revenues and costs for detailed PIA

components like spine duct, lead-in duct, junction boxes and poles as and when the revenues

exceed £5m. BT will be required to disclose the amount of costs for each of these components

that are recovered from PIA customers and from BT’s own cable networks.

61 https://www.ofcom.org.uk/consultations-and-statements/category-1/bt-regulatory-financial-reporting 62 We have used the terminology of ‘BT’ instead of ‘Openreach’ in this section as the formal regulatory financial reporting obligations fall on BT plc rather than Openreach Limited.

Issue 5 – 03/08/2020 38 of 41

ANNEX A - Network Adjustment Categories

Network Adjustment Categories Approach to Validation

Overhead D Pole. Poles overloaded with wires. Poles with no space for additional furniture. Poles with wire attachment restrictions due to crown rings.

Notes: Openreach will invariably need to undertake a field survey in most cases but are committed to desk based validation where possible, although some OH work will always need a field survey e.g. Network re-arrangement/new poles. CPs need to submit sufficient information and photographic evidence to enable desk based validation.

Desk and Field Validation Desk and Field Validation Desk and Field Validation Desk and Field Validation

Underground Spine duct with lack of capacity that can be resolved by recovering cables. Spine duct collapsed. Jointing chamber - lack of capacity. Jointing chamber – damaged. Lead-in duct – lack of capacity that can be resolved by recovering cables. Lead-in-duct – collapsed.

Notes: UG Network Adjustments initially require 100% desk and field validation. Achieving successful ‘Path to Collaboration’ status will reduce this rate (please see next slide).

Desk and Field Validation Desk and Field Validation Desk and Field Validation Desk and Field Validation Desk and Field Validation Desk and Field Validation

High Level Approach to Validation

Issue 5 – 03/08/2020 39 of 41

ANNEX B - Network Adjustments and the ‘Path to Collaboration’ model.

Step 1: Collaboration

•Forecast submitted on forecasting area basis.

•Whereabouts submitted.

•SPO evidence submission requirements adhered to.

•Less than 5% rejected at desk (previously 2%).

Step 2:

Quality

•Less than 10% rejection field (previously 5%).

•Remedial action <= 30 days.

•Safety- no reported infrastructure/member of public incidents in preceding 3 months.

•Audit - 90% but currently not part of measure while we support CPs on build quality.

PIA customers are now able to utilise an operating model where they take greater responsibility for validating Network Adjustments

Path to Collaboration’ model The ‘Path to Collaboration’ model will help

enable CPs to take greater control of Network Adjustment (NA) validation by evidencing they are carrying out the due diligence required to ensure civils costs are controlled appropriately and that they are working within the terms of the PIA contract.

Where a CP has achieved ‘Collaboration’ status Openreach will not automatically validate all NAs in the field.

The intention is that ‘Collaboration’ status will be granted using a combination of geography and performance of network adjustment outcomes for the previous quarter.

Qualifying criteria have been relaxed to a failure rate of 10% at desk and 15% at field. This will be reviewed by Openreach during 20/21 and decision made on whether the relaxed criteria remains or whether we implement the 5/10% as shown in the model.

Metrics and qualifying criteria are being considered in two ways - either: • National qualification with a minimum threshold of 80 successful UG self-provide orders progressed

in total, or • Regional qualification with a minimum threshold of 20 successful UG self-provide orders progressed

within that region. All ‘qualified’ PTC orders would still be subject to sampling checks. The proposed sampling methodology would initially be up to 20% of orders progressed via the PTC workflow, gradually decreasing over the period of qualification.

Current model

Openreach see providing a forecast and submission of whereabouts data as a basic hygiene factor for any CP that wishes to ‘Collaborate’ with Openreach in order to pass self-provide orders through the PTC.

Issue 5 – 03/08/2020 40 of 41

ANNEX C - Further Information Sources.

Physical Infrastructure Access (PIA)

Under the terms of Ofcom’s final statement on the “Physical Infrastructure Market Review”

(PIMR) published on 28 June 2019, BT is required to publish reference offers in relation to

network access provided within SMP designated markets.

For PIA, the relevant product information, technical and contractual information is at:

https://www.openreach.co.uk/orpg/home/products/ductandpoleaccess/ductandpoleaccess.

do

PIA related charges are published in the Openreach price list and can be found at:

https://www.openreach.co.uk/orpg/home/products/pricing/loadPricing.do

Interface Specifications can be found at:

http://www.sinet.bt.com/

Information on the Openreach Statement of Requirements (SOR) process can be found at:

https://www.openreach.co.uk/orpg/home/loadStatementOfRequirement.do?data=5VuXDcY

vB0NkrRQRrBZRxYyWF5PgOs6bUzF%2BfSrZzmJba5FvEz4krukRuCCbqYkv

BT’s Regulatory Financial Statements can be found at:

https://www.bt.com/about/bt/policy-and-regulation/our-governance-and-

strategy/regulatory-financial-statements

Details of the Passives Industry Working Group (PIWG) and the Copper and Fibre Products

Commercial Group can be found at:

https://www.openreach.co.uk/orpg/home/products/industryforums/industryforumlanding.

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Openreach Fibre First information can be found at:

https://www.homeandbusiness.openreach.co.uk/fibre-first

Please note: Some of the above links do change as part of Openreach portal and website

updates, and whilst we aim to update the links when this happens if you require any of the on-

line information referenced above, but are unable to access the relevant website then please

contact openreach.service.desk@openreach.co.uk or your Sales and Relationship Manager

(SRM) for assistance and further information.

Issue 5 – 03/08/2020 41 of 41

Document History

Status Date Details of Change

Issue 1.0 21/11/2011

Initial publication

Issue 2.0

16/05/2013

Update following Exchange Access Link withdrawal

Issue 3.0

01/04/2019

Update for WLA PIA product launch on 1 April 2019

Issue 4.0

01/08/2019

Update for PIMR PIA product launch on 1 August 2019.

Issue 5.0 03/08/2020 Updated to include further details of PIA KPIs, Openreach Fibre First programmes, Systems, Forecasting, ONSA and other items.

End of Document