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Registered office: 81 Newgate Street, London EC1A 7AJ.
Registered in England and Wales No. 4190816.
Produced by BT Group.
Printed by RR Donnelley.
www.bt.com
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BT Group PLC
Registered Office: 81 Newgate Street, London EC1A 7AJ
Registered in England and Wales No: 4190816
Produced by the Equality of Access Office
Please recycle
Annual Report 2011
BT Group plc
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About this report
The EAB was set up in 2005 to monitor
BT’s delivery of the Undertakings. It
also advises BT on compliance and
reports its findings to Ofcom and
industry. Key opinions on BT’s
performance during 2010/11 are
expressed throughout the report and
how the EAB forms these opinions is
explained in ‘Monitoring, Reporting
and Advising’ on p19-20.
7 Discussions on the Ethernet product portfolio
The evolving Ethernet portfolio became a focal point for
industry attention during the year. We conducted a detailed
review of Ethernet products and also looked into a number of
concerns raised by CPs.
14 Issues management
The EAO continued with its issues management programme
and investigated a wide range of issues during the year
including those relating to NGA, SLU, space and power and
governance.
Contents
Chairman’s introduction
1
Review of the year
2
Systems separation milestones
2
Focus on NGA
5
Ethernet
7
Statement of Requirements process
8
Other developments during 2010/11
9
Understanding non-compliance & risk
12
Outlook for 2011/12
16
The EAB
18
Undertakings status indicators
25
Monitoring the delivery of major EoI products
25
Systems separation obligations
26
NGA monitoring themes
29
NGN monitoring themes
30
Behavioural dashboard
31
Product KPIs and CPCs
33
PwC’s assurance opinion
39
Glossary
41
29 Next Generation Access
A snapshot of the EAB’s ‘principles-based’ approach to
monitoring BT’s delivery of NGA.
PricewaterhouseCoopers LLP provides independent assurance on key
paragraphs and charts in the EAB’s Annual Report and these are
indicated by the following symbol
throughout the report.
The Equality of Access Board (EAB) is a committee of the BT Group
plc Board. BT Group plc is a public limited company registered in
England and Wales. This is the EAB Annual Report for the period
ended 31 March 2011. Unless otherwise stated all facts, statistics,
events or developments are correct to the nearest practical date
before 11 May 2011. The opinions expressed are those of the EAB,
not necessarily those of BT Group plc. The EAB Annual Report is a
requirement of the Undertakings given to Ofcom by BT pursuant to
the Enterprise Act 2002.
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Chairman’s
introduction
Welcome to the
Equality of Access
Board’s sixth annual
report. Our role of
monitoring BT’s
Carl Symon EAB Chairman, 11 May 2011
compliance with the
Undertakings, offering advice on
compliance issues and reporting on
BT’s delivery of the Undertakings has
continued throughout 2010/11.
The year has seen the largest set of formal Undertakings milestones
to be delivered by BT in a number of years. These consisted of a series
of systems separation and migration milestones, the aim of which
was to make it more difficult to share information inappropriately
across organisational boundaries. This is a major project, with
delivery milestones stretching to 2014 following a variation to the
Undertakings during 2009.
By its nature, systems separation involves much work and potential
disruption. However, the business benefits of systems separation are
often overlooked. BT has told us that it has a strong incentive to
proceed with its business systems separation plan as it expects this to
deliver operational and commercial benefits to its downstream
operations as well as helping to achieve its Undertakings obligations.
During the year, increased demand for high capacity bandwidth
services affected Openreach’s delivery of some services to customers.
We focused on monitoring that services were still delivered on an
equivalent basis during this period.
In this report we have also looked at BT’s Next Generation Access
(NGA) programme and the important role that engagement with
industry customers plays in shaping the new products and services
that will be developed as part of NGA. Both the EAB and our support
team, the Equality of Access Office (EAO), continue to meet industry
representatives and attend industry working groups to better
understand the current concerns of Communications Providers (CPs).
In early 2011 we appointed a new EAB member. Dr Tim Whitley,
BT Group’s Strategy Director, replaced Himanshu Raja as the senior
BT manager on the Board. I’d like to thank Himanshu for his
participation and advice over the past three years and wish him the
best in his new role as CFO in BT Global Services. Tim’s knowledge of
BT’s strategy, product portfolio and engagement with customers
makes him an excellent addition to the EAB.
At this time, most of our work is based around key compliance risks,
principles-based monitoring and assessing BT’s ongoing adherence
to Undertakings obligations delivered in previous years. This
programme helps us to react quickly when problem themes emerge,
and it also allows us to systematically check BT’s compliance across
a wide range of areas.
We continue to review Openreach’s activities quarterly and we have
also ensured that we maintain strong relationships with the rest of
BT since we believe an important part of our role is to advise on
Undertakings-related issues. We have an ongoing dialogue with
Openreach about how it differentiates offerings so that we can better
understand how it manages equivalence whilst improving
responsiveness to customers and markets. We made
recommendations to Openreach this year on subjects such as the
Statement of Requirements process and service differentiation.
We continue to follow the policy debates that are shaping the
environment in which we work. The outcome of Ofcom’s Wholesale
Local Access market review helped to clarify key development
principles for NGA, such as increased access to the underlying
network infrastructure. We will assess those elements which may
have equivalence implications.
There have also been debates on legacy products during the year.
We have heard from CPs regarding the transition to the equivalent
version of Wholesale Line Rental, WLR3. Other products have
reached maturity. The Office of the Telecommunications Adjudicator
reported that by 31 March 2011 the number of unbundled lines had
reached 7.6m – a significant indicator of the impact of the
Undertakings.
This report has been condensed so that we can highlight key
developments that have shaped the year’s work. As usual, we give
our opinions on BT’s delivery of key milestones such as systems
separation and on its ongoing compliance with broader obligations,
such as those for NGA, throughout the report. We will continue to
meet all of our stakeholders in the coming year to ensure that we
keep abreast of a rapidly changing UK telecommunications market.
Chairman’s introduction 1
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Review of the year
Original obligation
New commitment
Full physical separation by
30 June 2010 of
Operational Support
Systems except for
exempted systems
(continued)
BT to advise Ofcom by 31 December 2011 of the
further percentage of customer records to be
separated by 30 June 2014.
Installed Base Migration
Complete (IBMC) dates for
WLR3 Analogue, ISDN2
and ISDN30
All IBMC dates to be removed (except 70% interim
target for WLR3 Analogue).
90% of BT’s relevant installed based to be migrated by
30 June 2010 and 95% by 31 December 2012.
1. The delivery of the systems separation milestones
IBMC dates for Featureline,
Featurenet, MegaStream
Ethernet, Redcare CCTV,
Media & Broadcast,
Wavestream Connect and
Regional
2. The rollout of Next Generation Access
None
Openreach’s delivery of specific service developments
and functionality to industry to be published in a
roadmap by 30 September 2009 alongside the
associated change control process, with subsequent
publication of each on an at least six monthly basis.
In this section of the report we look at
the key themes that have shaped our
work during 2010/11. We also include
the findings from our wider
monitoring programme. We look first
at the major themes that have
emerged during the year and follow
this with our other findings.
Major themes are:
3. Discussions on Ethernet products
4. Review of Openreach’s Statement of Requirements process
5. Progress in other areas such as exchange space allocation and
Next Generation Networks
6. Overall conclusion on BT’s compliance with the Undertakings
Systems separation milestones due
During 2010/11, BT was required to deliver a greater number of
Undertakings milestones than in recent years and it was also required
to comply with a wide range of Undertakings obligations on an
ongoing basis. A large number of milestones resulted from a
variation in 2009 which saw some of the obligations relating to
product delivery and systems separation delayed, and in return BT
agreed to a number of voluntary obligations. The changes were as
follows:
Original obligation
New commitment
Full physical separation by
30 June 2010 of
Operational Support
Systems except for
exempted systems
Operational Support Systems for Openreach to be run
physically separate from those of the rest of BT when
reasonably practicable and proportionate.
2 EAB Annual Report 2011
80% of customer-side service records to be separated
by 30 June 2010 and 90% to be separated by
31 December 2012.
Removal of obligations relating to supply side records.
BT to advise Ofcom by 31 December 2011 of the
further percentage of installed base to be migrated by
30 June 2014.
Systems separation underpins BT’s overall compliance with the
Undertakings. The company must separate the systems used by
Openreach from those used by the rest of BT so that confidential
information cannot be shared inappropriately across organisational
boundaries.
BT must implement different levels of separation for each type of
system, including for Operational Support Systems (OSS),
Management Information Systems (MIS) and some other types of
system falling outside of these classifications. It must also move
customer records across to the newly separated systems. The levels of
separation are as follows:
• Level One separation or ‘user access controls’ – the application
of access rights and controls to ensure that users have access only
to the data to which they are entitled (but using common
databases, applications and servers).
• Level Two separation – separation of systems data and separate
instances of the application software to provide additional
assurance that users are confined by their access rights (but still
using common servers).
• Physical separation – Complete separation of data, application
and servers.
Following the variation, BT was due to deliver in 2010/11 the
systems separation and migration milestones described on the
following pages.
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OSS separation and records migration
OSS are those systems carrying out the functions and processes that
help BT to run its network and its business. They are often large
systems containing tens of millions of customer records, and
the Undertakings state that they must be separated along
organisational boundaries. BT has to achieve a series of progressive
targets by which time a certain percentage of its customer records
must be held in systems with at least Level Two separation. Full
physical separation is to be delivered when reasonably practicable
and proportionate.
The first of the progressive targets required BT to migrate at least
80% of its customer records from shared OSS to Level Two separated
OSS by 30 June 2010:
At least 80% of BT’s Customer Side
Records relating to the Measured
Products held on Operational Support
Systems shared between AS and the rest
of BT are migrated to at least Level Two
system separation.
30 June 2010
Achieved
Nearly all of the progress to date has been achieved by migrating
consumer records rather than business customer records. Consumers
have a much simpler product portfolio and less complex supporting
systems than business customers. Also, many of the business
products have a relatively small installed customer base and so
completing the separation of a particular product’s OSS may not
achieve large numbers of customer record migrations.
The target for the percentage of customer records to be held on
separate systems rises to 90% by December 2012. As part of the
quarterly systems roadmap reviews, BT has presented a plan to
Ofcom and the EAO although further work is still required.
Achieving the 90% target requires the introduction of a new system
stack for business customers within BT. As this is the key enabler to
achieving the target, BT and Ofcom have agreed four non-legally
binding milestones to track progress.
1. Start operational trial of stack
30 April 2010
Achieved
2. Initial live deployment on stack
31 Dec 2010
Achieved
3. Migration trial starts
31 March 2011
Achieved, subject
to EAB validation
4. Volume migration starts
31 Dec 2011
Dependent on
previous milestone
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In December 2011, BT must also report to Ofcom on the further
increased percentage beyond 90% it expects to achieve by 30 June
2014. This will in part be informed by the success of the business
system stack programme above.
Core-hybrid OSS
There is a subset of eleven OSS which are commonly known as ‘corehybrid systems’, containing physical layer or service level
information. Ofcom and BT have agreed full physical separation of
these may have a negative impact on customer service. For example
Openreach and BT Operate both need to access a hybrid system
relating to some aspects of the core fibre network.
For this subset, BT had to implement user access controls by June
2010 rather than enacting physical systems separation. By the same
date, it also had to limit access to Openreach and those users in BT
Operate or BT Innovate and Design who had an operational need to
access the system. The EAB commissioned PricewaterhouseCoopers
LLP (PwC) to assess BT’s delivery of this milestone. Based on PwC’s
work, the EAB is satisfied that BT successfully implemented user
access controls and limited access to the core hybrid systems.
Implement user access controls for OSS
listed in Annex Six of the Undertakings.
30 June 2010
Achieved
Implement physically separate access
and user access controls for BT people
not listed in section 5.44.6(a).
30 June 2010
Achieved
The EAB also asked PwC to examine the ongoing user access controls
and PwC found that BT had implemented these effectively.
The EAB has an ongoing obligation to report periodically to Ofcom
on any core-hybrid systems access granted to ensure that there is a
valid operational reason. The EAO examined each of the core hybrid
systems in turn to identify all users who had accessed the system in
the previous 60 days. It then analysed those users to determine their
line of business and for all users outside Openreach, it examined
whether their operational needs justified their access. The EAO also
examined the control mechanism for adding and removing users. In
its 2010/11 report on core-hybrid OSS the EAO informed Ofcom that
it was satisfied with the justifications and the ongoing controls and
this is still its opinion.
As can be seen from the table above, work on the business system
stack and the subsequent migration programme has started
satisfactorily. Nonetheless the complexities of the business portfolio
and business customer profiles make this a very challenging
programme with the potential for unforeseen problems.
Review of the year 3
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MIS separation
Migration of EoI products
MIS are large systems which hold commercial and customer
confidential information and which BT uses to plan and direct its
business and organisational operations.
BT’s Installed Base Migration Complete (IBMC) dates were removed
as part of the 2009 variation to the Undertakings, with the exception
of a 70% interim target for WLR3 analogue telephony. Instead, a
series of progressive targets has been established for measuring the
proportion of end users consuming the Equivalence of Inputs (EoI)
variant of certain key products. The separation of the OSS described
on the previous page is also a key enabler of the migration of end
users. The EAB found that BT had met the first of these obligations as
follows:
BT was due to undertake Level Two separation of its MIS by 30 June
2010. The EAB identified that two of these systems were not
separated as strictly required by the Undertakings, although the issues
associated with them were minor. The first system was not separated
because it was no longer used as an MIS but was not removed from
the defined list in time. The second system had been separated for
Openreach and downstream BT users, but a very small number of
people in BT Group with legitimate access requirements were still able
to access a combined database that fed the separated MIS.
The EAB also identified a third system which had not been separated
as required and this constituted a trivial breach. Remedial action was
underway at the time this report was published. As a result of this
latter issue the EAB concluded the overall MIS milestone had not
been met, but the EAB also recognised that the majority of MIS had
been successfully separated.
MIS Level 2 separation
30 June 2010
Not fully achieved
BSS separation
BT was also required to put in place user access controls for systems
that are neither OSS nor MIS – known as Business Support Systems
(BSS) – by 30 June 2010. BSS can hold commercial information and
customer information and can include systems such as publishing
platforms and file sharing sites.
The EAB agreed that BT had put in place access controls but there
remained an ongoing compliance risk around some systems where
users put in place their own access controls. The EAB will monitor the
operation of these user access controls on an ongoing basis.
Non-OSS and non-MIS Level 1
separation
30 June 2010
Achieved
At least 90% of BT’s relevant installed
end-user base shall be migrated so
that the products that this base
purchases, that consume the measured
products, do so on an EoI basis from
Openreach
30 June 2010
Achieved
By 31 December 2012, the second progressive target requires BT to
extend the number of end users to 95%. The EAB is satisfied that BT
is on track to achieve this milestone.
By 31 December 2011, BT must advise Ofcom of the further
extended target it expects to achieve by 30 June 2014.
BT is required to review its roadmap for systems separation with
Ofcom and the EAO on a regular basis. Progress on the business
systems stack and the delivery of the December 2012 milestones is
also reviewed. At the time this report was published, BT was planning
to achieve all of the milestones in a timely fashion.
OICs
In return for the 2009 variation to the Undertakings, Openreach
agreed that it would deliver a voluntary range of obligations known
as the Openreach Industry Commitments (OICs). These included
commitments such as improvements to address data, reducing
customer harm and Ethernet aggregation enhancements. The Office
of the Telecommunications Adjudicator works with Openreach and
industry to facilitate the delivery of the OICs.
Our view on milestone delivery
The EAB is satisfied that when assessed against the monitoring
criteria on p19-20, BT has delivered most of its systems separation
and migration obligations but there were a small number of
shortcomings. It will continue to monitor BT’s ongoing application of
user access controls for BSS and will also meet its reporting
obligations for core-hybrid systems on an ongoing basis.
BT has told the EAB that it continues to be committed to the delivery
of its systems separation obligations. The forward-looking
milestones have an element of risk because of the complexity of the
systems separation programme required to achieve them, although
BT believes that it is on track to deliver these obligations.
4 EAB Annual Report 2011
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NGA roll-out continues
BT continued to roll out its Next Generation Access network as well as
developing products for CPs wishing to deploy their own next
generation services.
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Openreach made progress with its Fibre-to-the-Cabinet (FTTC)
programme – one of the ways of rolling out NGA networks to end
customers. FTTC involves installing fibre to street cabinets and reusing the existing copper lines into premises.
NGA: Fibre To The Cabinet
Exist
ing C
oppe
r
Existing Copper
Local
Exchange
Existing
Cabinet
Linking
Copper
New
Cabinet
FTTC
Copper
Fibre
Power
BT also continued with pilots of Fibre-to-the-Premises (FTTP), which involve installing fibre into homes or premises, as an overlay of the
copper local loop. Piloting of FTTP continues and a full launch is scheduled for late 2011.
NGA: Fibre To The Premises
Local
Exchange
Splitter
FTTP Gigabit Passive Optical Network (Shared)
Review of the year 5
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The EAB’s NGA monitoring programme
The EAB takes a ‘principles-based’ approach to monitoring BT’s
delivery of NGA. This approach involves assessing different aspects,
such as validating the development and launch of products on an EoI
basis and checking that the choice of backhaul for CPs is not limited
by the NGA products which Openreach deploys. A full description of
the EAB’s approach to monitoring NGA can be found on p29.
The EAB found that Openreach was factoring EoI and the spirit of the
Undertakings into its decision-making and product development for
NGA. The governance framework for the NGA programme was
functioning effectively and there were high levels of engagement
through industry working groups.
The EAB also found that Openreach continued to launch products
compliantly. It confirmed that Openreach had launched the Generic
Ethernet Access (GEA) product – which enables a CP to provide
broadband connections over FTTC – on 15 May 2010, in accordance
with the Undertakings principles. At the time of writing, GEA over
FTTC was being rolled out in the UK and Openreach announced that
one large CP was planning to launch a product based on GEA.
The EAB also confirmed that the GEA product and associated Service
Level Agreements (SLAs) for GEA over FTTC were delivered
compliantly. SLAs for GEA over FTTP are also expected to be
introduced during 2011/12.
The EAO investigated some concerns on equivalent pricing for GEA. It
looked into a concern raised by a CP that the price of GEA and voice
services when ordered together was cheaper than if the services were
purchased separately. The CP said that this could lead to nonequivalence for those CPs only purchasing data services and also
raised the possibility of cross-subsidy. The EAO found that because
the product was available at the same price and on the same terms to
all CPs, the pricing scheme complied with the equivalence principle
within the Undertakings. The potential cross-subsidy issue is outside
the remit of the Undertakings.
A CP also queried one of a number of volume discount schemes that
Openreach was considering for GEA, which the CP felt could lead to
greater benefits for BT Retail. When the issue was investigated, it was
found that Openreach had decided not to take the scheme forward.
A variation to the Undertakings during the previous reporting year
gave the EAB new responsibilities for monitoring the equivalence of
any passive inputs to FTTC provided by Openreach. Passive inputs
include access to the copper wires between the BT FTTC cabinet and
the end-user premises, the provision to a CP of a cabinet and other
various associated components. They provide greater flexibility for
CPs planning to develop and offer their own alternatives to compete
with Openreach’s GEA over FTTC service, but they require high initial
investment costs for a smaller customer base.
6 EAB Annual Report 2011
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The EAB was concerned that Openreach had not provided sufficient
evidence to show that it was adopting design principles for systems
that make it possible in future for CPs to offer services based on FTTC
passive inputs. The EAB recommended that Openreach seeks CPs’
views on cabinet, fibre and systems requirements in the FTTC passive
inputs consultation that it is required to hold during the course of
2011. This will inform the EAB’s opinion on whether the required
design principles are being adequately considered by Openreach.
As part of its ongoing monitoring programme, the EAB completed a
review of Openreach’s NGA commercial engagement arrangements,
in particular engagement with the regional development agencies,
Olympic sites and the Ebbsfleet fibre development. The aim of the
review was to ensure that Openreach was only selling services
directly to other CPs rather than development agencies and other
agents. The EAB found that commercial engagement with Openreach
was being compliantly managed and there was evidence of a good
understanding within Openreach that commercially sensitive
information should not be shared inappropriately.
Other developments
There continued to be debate over the development and launch of
NGA products. In October 2010, Ofcom published a statement
concluding its Wholesale Local Access market review. It concluded
that BT has Significant Market Power (SMP) in the WLA market,
including for its NGA services. The market review resulted in a new
remedy called Virtual Unbundled Local Access (VULA), which will
allow competitors to deliver services over BT’s NGA network. Another
remedy set by the WLA market review is Physical Infrastructure
Access (PIA), which will allow BT’s competitors to deploy their own
infrastructure by accessing BT’s duct and poles.
Ofcom concluded that most aspects of VULA were delivered via GEA.
However, it recognised that some CPs argue that further GEA product
variants are needed to fully meet the characteristics of VULA. In
particular, some CPs are keen to see a GEA variant tailored for
business customers. Ofcom has asked the Office of the
Telecommunications Adjudicator to continue to engage with industry
on this topic.
In January 2011, Openreach published a consultation on its initial
reference offer for PIA following industry consultation. It plans to
launch a full commercial service in summer 2011.
During 2010 debate continued about the development of a voice
access product for NGA. Openreach had previously considered
developing a product known as Voice over NGA (VoNGA), the aim of
which was to allow CPs to use a BT call server to offer voice services
to their own users.
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Following low levels of interest from CPs, Openreach found that it
would not be commercially viable to develop a VoNGA product and
will instead focus on a product which will allow CPs to install their
own call server, which it has called Fibre Voice Access (FVA). If there
was market demand for a VoNGA-type service, Openreach has said it
expects other CPs to provide it on a wholesale basis. BT Wholesale
has stated that it currently has no plans to develop such a service.
An industry representative raised the point to the EAO that BT Retail
could use call servers provided by BT Operate to deliver an NGA voice
service which was not equivalent. The EAO investigated the issue and
found that BT Operate was using an equivalent input from
Openreach that was available to all CPs. Therefore there was no
compliance concern.
Our view on BT’s delivery of NGA
The EAB is satisfied that Openreach is factoring in EoI and the spirit
of the Undertakings in rolling out the NGA programme and
developing NGA products when assessed against the criteria on p29.
Industry engagement remains central to the success of the
programme and the EAO has observed that Openreach continues to
place great emphasis on this for both the development of GEA and
managed products. The development of passive products remains an
area of concern. The EAB will continue to monitor that Openreach
complies with the obligations on consultation and design
considerations for these products, if launched. In addition, the EAB
will focus on state-funded infrastructure schemes, such as
Broadband Delivery UK (BDUK), to ensure that BT’s involvement is
compliant.
Discussions on Ethernet products
The evolving Ethernet portfolio became a focal point for industry
attention during the year. Openreach will be gradually phasing out
legacy products such as Wholesale Extension Services (WES),
Wholesale end-to-end Ethernet services (WEES) and Backhaul
Extension Services (BES) to create a new Ethernet product portfolio,
which includes variations of products such as Ethernet Access Direct
(EAD) – a point-to-point access product offering high bandwidth
connectivity linking end user sites, CP networks and BT exchanges.
The specific EoI milestones for legacy Ethernet products passed in
previous years. The Undertakings state that after these initial due
dates had passed, all future Ethernet products must be launched by
Openreach on an EoI basis. The EAB monitors that this is the case.
There were no significant Ethernet product launches during 2010/11
although there were variations to the EAD and Ethernet Backhaul
Direct (EBD) products and some in industry expressed their concerns
regarding the equivalent development of these products. In fact,
overall there were more issues raised by CPs to the EAO relating to
the Ethernet portfolio than any other area.
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During 2010/11, Openreach saw the demand for high capacity
bandwidth services rise and this led to overall delays in Ethernet
service delivery. Openreach put in place a recovery plan and a
specialist team to deal with the resulting order backlog. It also
continued to engage with industry.
CPs expressed concern to the EAO that Openreach had not handled
this order backlog equivalently. The EAO checked the reporting on
the order backlog and was able to reassure those in industry that
affected orders were processed equivalently during this period
as well as clarifying the process and reports that Openreach provides
to CPs.
The impact of the backlog was also reflected in the product KPI for
EAD which was significantly depressed for the months April to June,
although the EAB is satisfied that both BT CPs and non-BT CPs were
receiving equivalent service during this time. For more information,
see p35.
In April 2010, a CP raised a concern that BT Wholesale appeared to
have advance knowledge of the security accreditation status for EAD.
The EAO investigated and found that a BT Innovate and Design
employee had passed Openreach Commercial Information (CI)
relating to the security accreditation status for EAD to a BT Wholesale
employee shortly before this information was available to the rest of
industry. The EAB classified the breach as non-trivial although BT
had recommended initially that it was trivial. Openreach remedied
the breach by updating its website to show that security
accreditation had been achieved and it also gave a briefing to
industry. At this point the information ceased to be CI.
A CP raised a concern that the Openreach Ethernet portfolio was not
consistent with the requirements set out in Ofcom’s Business
Connectivity Market Review (BCMR). The EAO investigated and
found compliance with the BCMR is not a requirement of the
Undertakings, and that furthermore there appeared to be no related
issues which fell within the Undertakings remit.
The Ethernet portfolio is still developing and CPs raised a number of
issues about product variants including Synchronous Ethernet,
Wireless Ethernet and Ethernet in the first mile. The EAO investigated
these issues and did not find a breach in any of the cases but did
make some recommendations to Openreach to provide greater
assurance to industry.
CPs also raised concerns that the pricing of some Ethernet products
was not equivalent. In particular, there were concerns around pricing
and other arrangements for those products where BT is judged to no
longer have SMP – particularly the 10Gb Ethernet products. A CP
raised the concern that the EBD 10Gb product had no published
prices but was ‘Terms on Application’ (TOA) instead. The EAO
investigated the first few orders from BT CPs and non-BT CPs and
concluded that for those it examined, the same pricing model and
terms and conditions were being applied – i.e. the principle of
equivalence had been applied. However, the EAO also recognises
Review of the year 7
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that because TOA is not transparent it makes it harder to ascertain
whether equivalence is being applied or not.
The EAB also raised a concern that CPs ordering the EBD 10Gb
product did not receive confirmation of the cost of the order at the
time the order is placed. This may have caused problems for non-BT
CPs due to the high installation and rental cost of these large
capacity backhaul offers. Lack of visibility of the price of the product
may be of less concern to BT CPs, as there may be more scope for the
prices to be absorbed within the company. At the time this report
was published, Openreach was investigating this matter.
Our view on Ethernet
The EAB is satisfied that, in most cases, Openreach is offering
Ethernet products on an equivalent basis when assessed against the
monitoring criteria on p19-20. However, the complexity of the
Ethernet portfolio and the pace of change meant that concerns have
arisen, one of which was found to be a breach. Forecasting industry
demand for the newer generation of Ethernet products also
remained challenging. The EAO will continue to attend the Ethernet
Forum (formerly the Connectivity Services Forum) to hear industry
views on Ethernet-related developments.
The EAB has recommended that Openreach continues to engage
with industry on these issues and that it also continues to make
improvements to the operation of the process underpinning the
development of new Ethernet functionality – the Statement of
Requirements process.
Statement of Requirements process
under scrutiny
The process for submitting requests for changes to existing products
and requests for new products – known as the Statement of
Requirements (SoR) process – came under continued scrutiny
because of a series of issues raised by CPs and the Office of the
Telecommunications Adjudicator. The process was also identified in
the previous reporting year by the EAB as the top compliance risk.
Openreach had launched a new SoR process in August 2009 to
address issues with the existing process. The new process captures
and progresses requirements for LLU, WLR and Ethernet products.
Openreach also launched an online tracker tool to make changes to
SoRs visible to industry.
8 EAB Annual Report 2011
Bleed: 2.541 mm
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The EAB’s first review of the new process in 2009 found that it had
led to a number of improvements for CPs. The new system allowed
CPs to see SoRs raised by other CPs for the first time. It also created
greater transparency around each request and encouraged more
industry collaboration. The EAB concluded the review by
recommending further engagement with industry to ensure that the
new process was widely understood.
The EAB concluded a further review of how the SoR process was
operating in November 2010. It found that there were still a number
of areas of concern around the processing of SoRs. In particular,
Openreach was not providing timely updates on Ethernet SoRs via the
tracker tool. There were also concerns that Openreach was not using
the SoR process for new NGA requirements but was instead discussing
these at an industry focus group, the NGA Trialist Working Group.
Some CPs expressed their concern at the lack of transparency as a
result of two separate channels for different types of requirements.
Openreach said that it was using the Trialist Working Group to
progress NGA requirements because most NGA products were still at
a very early stage of development and were not yet ready to be
progressed as formal requests via the SoR process. It did not give a
firm date for when new NGA requests would be moved into the SoR
process.
The EAO – which attends the Trialist Working Group as an
observer – has noticed that Openreach takes a highly collaborative
approach to managing NGA requirements with the group and has
high levels of transparency and engagement. Following a
recommendation from the EAO, Openreach has also begun to involve
those CPs using Ethernet to supply services to business customers in
the NGA development process.
Openreach has said that it remains committed to the successful
operation of the SoR process for Ethernet, WLR and LLU requests. It
has made improvements to the governance of the process to ensure
that requests internal to the company were handled compliantly. It
has also rolled out training for Openreach employees to better
understand how the process functions. Openreach has told the EAB
that it continues to engage with CPs interested in submitting
requirements for Ethernet products to better understand their needs.
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The EAB recognises that Openreach is continuing to take steps to
improve the effectiveness of the SoR process and the chart below
shows the progress of the new requests that Openreach received
between April 2010 and March 2011. Openreach also delivered six
requirements that had been raised by CPs in previous years and
which are not shown in the chart.
Openreach SoRs received during April 2010 to
March 2011
15
13
Number of SoRs
12
10
9
8
7
7
6
3
1
0
Pending
In Development
3
1
Delivered
Cancelled
The EAB assesses all parts of the Undertakings through a range of
principles-based monitoring programmes and ongoing compliance
with obligations delivered in previous years or which recur on a
regular basis. Its monitoring approach is described in more detail on
p19-20 and the outcome of its work is described below.
In October 2008, BT and Ofcom agreed a variation to the
Undertakings in response to CPs’ concerns that they had difficulty in
reserving space in BT exchanges. The variation required BT to:
• Publish guidelines for the process of allocating exchange space
and power for Openreach’s LLU and Ethernet products
4
2
Other developments during 2010/11
Space in BT’s local exchanges is an important part of the
infrastructure supporting the delivery of the Undertakings. BT
Operate manages the local exchanges which house the access nodes
owned by Openreach.
16
14
Scale: 100%
Assessing exchange space allocation
18
16
Bleed: 2.541 mm
Rejected
SoRs raised by non-BT CPs
SoRs raised by BT CPs
Source: Openreach
The EAB will continue to monitor the number of requests delivered as
an indicator of the successful operation of the process. Despite the
chart showing higher numbers of requests in development for BT and
a higher number of rejected requests for non-BT CPs, these do not
necessarily represent equivalence-related concerns. This is because
under the new collaborative process, CPs work together to raise
requests and it is therefore less important which CP champions the
request. Openreach has ensured that the details of all SoRs are now
shared with CPs and the status of each requirement is visible as it
progresses through the process.
Our views on the SoR process
The EAB remains concerned about whether NGA requests should be
entered into the SoR process. If the Trialist Working Group can
progress requests more quickly without entering them into the
formal process, there may be a strong argument for moving all SoRs
onto a less formal, more collaborative basis as long as high levels of
transparency can be maintained. The EAB will continue to take an
active role in the debate as it develops further.
Information on BT Wholesale’s separate SoR process can be found on
p32.
• Conduct a proactive review of exchanges with a view to freeing
up space
• Develop and launch a space-only allocation product on an
EoI basis
• Review the scope of the existing LLU co-mingling product to
allow more flexible use of exchange space.
The variation also required the EAB to carry out regular audits of
exchange space and review allocation processes focusing on those
exchanges where the main distribution frames were constrained.
In January 2011, the EAB completed its regular audit of the
exchange space and review allocation process. It found that no CP
had ordered the space-only product that Openreach was required to
make available as a result of the variation. This was in part because
the product was only available in certain exchanges linked to NGN
roll-out dates. In line with the EAB’s recommendation, Openreach
has removed this restriction which may lead to increased demand.
CPs have continued to purchase exchange space products such as
Openreach Access Locate.
As a result, the EAB therefore concluded from an equivalence
perspective that BT was offering exchange space compliantly.
However, it is aware that there are growing industry concerns about
whether BT is working to free up space in exchanges where there is
CP demand. It also noted that there were some concerns around the
operation of the exchange space forecasting process and
Openreach’s speed and consistency at processing orders. The EAB is
increasing its monitoring to ascertain whether developments in these
areas impact on BT’s compliance with the Undertakings.
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NGN takes a backseat
BT’s plans to roll out a Next Generation Network (NGN) took lower
priority during 2010/11. The company announced that, following a
review of the programme structure and governance arrangements for
its 21st Century Network (21CN) programme, it would scale back the
programme to reflect changing priorities. The scaling back of BT’s
21CN plans followed announcements in previous years that BT would
no longer develop a voice solution or a converged voice and
broadband solution over the platform.
Despite the announcements regarding the change in priorities in the
21CN programme, BT continues to operate the ‘Pathfinder’ voice
network in South Wales following extensive trials in previous years. It
is also rolling out the Wholesale Broadband Connect (WBC) product
on a customer-led basis. The company still publishes the Plan of
Record and continues to engage with industry on 21CN.
During 2010/11, the EAO found that BT had continued to maintain
the information partitioning arrangements between different parts
of the business and it was also planning to migrate all of the NGN
documentation onto a new information management platform. BT is
committed to ensuring that the programme continues to underpin
the development of NGA as well as delivering CP requirements.
During the year, there was a change to the governance arrangements
for NGN with management of the 21CN programme handed over to a
Delivery Board run by BT Innovate and Design.
Bleed: 2.541 mm
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non-BT CPs. Most of the customers of BT CPs were on another
variant of the product rather than WLR2.
Some CPs had expressed concerns that there was no successor
product to WLR3 on the NGA platform after the withdrawal of
VoNGA before commercial launch. They were also concerned that the
level of functionality of WLR3 does not match that of WLR2 for
products for business customers, and that BT Retail was gaining an
unfair advantage through an extension to the deadline for moving its
customers across to the new platform.
The EAB found that BT had continued to deliver WLR3 on an
equivalent basis to all CPs during 2010/11 when measured against
the monitoring criteria on p19-20. The WLR2 closure deadline was a
concern for some CPs during the year but was not within the remit
of the Undertakings.
The product key performance indicator (KPI) for WLR3 Analogue
repair performance shifted significantly in favour of BT CPs during
summer 2010. Openreach informed the EAB that this was mainly
because of a service harmonisation initiative which changed the
service levels available to all CPs. Unlike most other CPs, BT CPs
primarily use the longest lead time service level (Service Level 1)
which is easiest for Openreach to achieve. The EAB is satisfied that
the KPIs for WLR3 show that the product is being offered on an EoI
basis when analysed by each separate service level.
The EAB continues to take a principles-based approach to
monitoring BT’s compliant delivery of NGN. During 2010/11, it
found that BT was compliant with the Undertakings relating to NGN.
Full details of BT’s compliance with the NGN monitoring principles
can be found on p30.
In Northern Ireland the same concern was also separately raised by a
CP. In the Province there was also an issue about whether BT Retail
had access to the same WLR3 diagnostic and other services. The
EAO’s investigation found that BT Retail only had access to the
equivalent services available to all CPs, but that some of the claims
on its website were misleading. Following the EAO’s work, BT Retail
changed the claims on its website.
Deadline for move from WLR2 to WLR3
Exemptions and variations
Openreach continued to encourage CP customers to take up the next
generation of products and services. The legacy Wholesale Line
Rental product (WLR2) platform is due to close by the end of June
2011, by which time all users will need to move to the EoI WLR3
product. WLR3 is used by CPs to offer their own branded telephony
and narrowband data services to end customers.
In 2009/10, the EAB flagged its concerns regarding BT’s delivery of
the Wavestream National product (due 31 December 2010), which is
based on Dense Wavelength Division Multiplexing (DWDM) and
provides connectivity between any two end user sites.
By 31 March 2011, Openreach reported that 352 CPs had passed
through service establishment for WLR3, and a further 37 CPs were
going through the process. Openreach said that there was just one
CP which had not engaged with it to start WLR3 establishment
although discussions about its plans were underway. For CPs which
had not completed the transition before 30 June 2011 there will be a
chargeable contingency service available from July 2011 where CPs
can still place orders for certain transactions such as ceasing lines as
well as raising faults on existing lines. It should be noted that the
migration from WLR2 to WLR3 has been of greater significance to
10 EAB Annual Report 2011
In December 2010, Ofcom granted BT an exemption from the
Wavestream National RFS obligation which was due on 31 December
2010. BT requested the exemption because it felt that it was
impractical and disproportionate for Openreach to provide a
new input product by the 31 December 2010 RFS date, and for
BT Global Services to consume such a product in its Wavestream
National service.
This was because there was a similar, existing product in a market
where BT does not have SMP, implying that there is already a
competitive market for high bandwidth access services. There was
also an absence of committed external demand for the new
Openreach product. BT said that given the low expected revenues for
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Wavestream National, it was disproportionate to expect BT Global
Services to develop a product based on the Openreach input
product. BT said that Openreach remained committed to the
development of an Optical Spectrum Services product which could
be used as an input to support CPs’ longer distance optical products.
In addition, the EAB is satisfied that BT delivered the required user
access controls over the Core-Hybrid OSS systems listed in Annex Six
of the Undertakings. The EAB’s opinion on this matter is informed in
part by independent assurance provided by PwC and therefore sits
outside of the assurance opinion on this report.
Ofcom concluded that it was appropriate to grant BT the exemption
from its obligations concerning the application of EoI to the provision
of Wavestream National, subject to review. If, following the Business
Connectivity Market Review, it found BT to have SMP in a retail
market or relevant upstream market which includes national
Wavestream services, the exemption will be reviewed. In the absence
of an SMP finding, the exemption will stand.
The EAB is also satisfied that BT continues to comply with key
aspects of the EAB’s principles-based monitoring programme for
Next Generation Access. The EAB also believes that BT remains
committed to ongoing compliance with the Undertakings, although
some of its reviews of areas included in its risk register identified
ongoing areas of concern. These include the operation of
Openreach’s SoR process and some aspects of the Ethernet portfolio.
As described in more detail in the next section, the number of noncompliant incidents remains low year-on-year but there are some
recurring themes that BT must continue to address to prevent similar
incidents from occurring and to maintain industry confidence. These
include continuing to enforce messages on compliant information
sharing and ensuring that systems access controls are easy for
employees to use.
Our overall view on BT’s compliance
with the Undertakings
When assessed against the monitoring criteria shown in the
section entitled ‘Monitoring Reporting and Advising’ on p19-20, the
EAB is satisfied that BT continues to focus on compliance with the
Undertakings and has delivered the key systems separation
milestones shown below with only minor instances of noncompliance identified:
Milestone
Date
Status
At least 90% of BT’s relevant installed
End-User base shall be migrated so that
the products that this base purchases,
that consume the Measured Products,
do so on an EoI basis from AS
30 June 2010
Achieved
At least 80% of BT’s Customer Side
Records relating to the Measured
Products held on Operational Support
Systems shared between AS and the rest
of BT are migrated to at least Level 2
System Separation
30 June 2010
Achieved
Business Stack – Operational trial starts
30 April 2010
Achieved
Business Stack – Initial live deployment
31 December 2010
Achieved
MIS Level 2 separation
30 June 2010
Not fully achieved
Non-OSS and non-MIS Level 1 separation
30 June 2010
Achieved
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Understanding
non-compliance
& risk
The EAB monitors BT’s compliance
with all of the obligations listed in the
Undertakings. Now that many of the
major Undertakings milestones have
passed, it evaluates BT’s performance
on an ongoing basis and also takes a
risk-based approach to assessing
potential compliance issues.
The Undertakings place obligations on both the EAB and BT to
identify, investigate and report on incidents of non-compliance.
Breaches
The EAB can also recommend additional actions which can help to
mitigate the impact of a breach – particularly when a remedial action
cannot be implemented immediately as it requires the development
of a new process or systems solution. These are known as
‘consequential’ actions and are also designed to minimise the risk of
similar breaches occurring in the future.
The Undertakings place obligations on BT and the EAB to identify
and report on breach cases. Following a breach notification from BT
or the EAO, the EAB determines its view on the case and its
significance (non-trivial or trivial) and the appropriateness of BT’s
proposed remedial actions.
There are a number of ways in which the EAB investigates noncompliance:
• It examines the cases of non-compliance reported to it by BT via
the breaches process and complaints reports. It receives
complaints directly from CPs via its formal complaints process
• It investigates issues raised by CPs on an informal basis through
its ‘Quick Checks’ process
• It tracks the likelihood of non-compliant incidents recurring
through a risk register.
In 2010/11 there were two breach cases which the EAB determined non-trivial:
Non-trivial breach details
Remedy
A BT Innovate and Design employee passed Openreach Commercial Information relating
to the security accreditation status of the EAD product to a BT Wholesale employee
shortly before this information was available to the rest of industry. The EAB disagreed
with BT’s assessment that the breach was trivial.
The Openreach website was updated to show that security certification had been
achieved, and a further industry briefing was given. At this point the information ceased
to be Openreach Commercial Information. Further training was also given to BT
Innovate and Design employees on information sharing.
BT CPs were able to access the National Cable Breakdown Log (NCBL) via BT’s intranet
pages which were not available to non-BT CPs.
Openreach switched off NCBL in January 2011 and replaced it with a system known as
Common Fault Manager (CFM). Appropriate user access controls are in place for CFM
and all CPs receive details of cable breakdowns via a report on the Openreach portal and
the Openreach fault tracker.
There were also two non-trivial cases from 2009/10 which were discussed during 2010/11:
Non-trivial breach details
Remedy
The BT Revenue Assurance Team responsible for billing accuracy shared data with a BT
CP relating to billing errors for EoI products that should have been provided to all CPs
simultaneously. The EAB confirmed this as a non-trivial breach in February 2010.
BT Wholesale put in place a solution to report its billing errors equivalently in July 2010
and the EAB has validated this element of the remedy. Openreach is expected to launch
an equivalent system to report its billing errors. The breach remains open until the EAB
has validated this element.
A system feed to the BT Retail Data Warehouse contained a coding error that led to the
inclusion of a very small number of non-BT CP customers’ details in the downloaded
data. A compliance check by BT identified the problem but the corrections needed were
not implemented at that time. The EAB disagreed with BT’s assessment that the breach
was trivial. This breach was reported to the EAB in April 2010.
The EAB requested an explanation to establish why there was an initial failure to correct
the non-compliance. BT reported that an individual had mistakenly overlooked the
action and had now left the business. The breach was closed in January 2011 when the
EAO received evidence that BT had now excluded all relevant records from the customer
feed.
12 EAB Annual Report 2011
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There were four breach cases which the EAB determined were trivial:
Trivial breach details
Remedy
A small team in BT Global Services accidentally received call management information
relating to non-BT CPs’ end customers as the result of a faulty data feed.
A systems fix was put in place to remedy the problem.
Ofcom asked the EAO to investigate four allegations made by a BT employee that BT Retail
was receiving preferential treatment from an Openreach Service Management Centre.
The EAO did not find any evidence to support three of the allegations but the fourth
allegation that Openreach provided BT Retail with a bespoke service for reconnecting
‘distressed end users’ cut off in error was found to be a breach. The EAB disagreed with
BT’s assertion that the bespoke service was not in breach of the Undertakings.
The bespoke team was disbanded and as a result the service was no longer available to
BT Retail.
Level Two systems separation was not put in place for an Openreach call-centre agent
performance monitoring system containing CI/Customer Confidential Information (CCI).
Remedy ongoing at the time this report was published.
A BT Group employee shared BT Wholesale CI/CCI with BT Global Services.
The individuals involved were briefed and tighter information sharing controls were put
in place.
Four further potential breaches were under investigation at the time
this report was published, and the EAB will report on the outcome of
these in its regular bulletins.
The EAB exercised its discretion over a number of smaller matters
during 2010/11 which it evaluated but did not consider breaches.
An example included an administrative failure to remove one
system from the formal list of systems requiring separation. The
EAB continues to keep check on the number of smaller cases it
handles to ensure that no consistent themes emerge, and in
some cases it has recommended that the EAO further investigates
these issues.
The number of breaches reported to the EAB during 2010/11 was
lower than in previous years. However, the EAB observed that it can
take a long time for BT to report and process breaches end-to-end.
For example, it took over a year before the EAB had received all of
the evidence of completion of consequential actions required for the
closure of two of the breaches originally reported in early 2010.
This may be because the complexity of some of the cases has increased
and the issues identified have become more difficult to resolve. The EAB
recommends that BT looks to hasten the resolution of breaches once
they have been identified, although it recognises that not all breaches
can be remedied easily. It also observes that communication between
BT and the EAB on breaches has continued to improve.
Non-compliant information sharing and failures in the application of
user access controls for some systems continue to be the main causes
of breaches reported to the EAB. BT has put in place learning
programmes to address non-compliant information sharing and the
EAB recommends that BT maintains its focus on this area.
Complaints
Both BT and the EAB handle complaints from CPs regarding potential
incidents of non-compliance. BT also receives complaints directly
from employees.
Complaints to the EAB
The EAB received two complaints from CPs, one of which was under
investigation at the time this report was published.
The other complaint was received from Welcome Telecom, which
alleged that Openreach had favoured order provision appointments
placed with it by BT Retail over order provision appointments placed
by Welcome Telecom. The EAO investigated the complaint, finding
no Undertakings or equivalence concerns and the EAB decided not to
uphold the complaint.
Complaints to BT
As in previous years, the EAB has continued to receive regular reports
of the complaints to BT from CPs. BT received 17 complaints up to
31 March 2011 which is a significant increase on the five complaints
received in 2009/10.
Eight complaints – all of which were received in the last quarter of
the year – alleged that Openreach had supplied BT with an earlier
service provision than that offered to the complainant. Openreach
found that two cases were as a result of improving provision lead
times; two involved products not subject to EoI; one case was not
relevant as it did not involve an engineering appointment; one case
appeared to be a misunderstanding; and in the remaining two cases
insufficient information was provided by the complainant to identify
the order on BT’s systems.
Understanding non-compliance & risk 13
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Seven complaints related to allegations of inappropriate comments
made by Openreach employees whilst on site at customer premises.
BT’s investigations found that, in three cases, Openreach employees
had not followed the correct process and have now received
coaching and training as appropriate; in three cases BT found no
evidence to support the allegation and one case was a result of a
misunderstanding.
Bleed: 2.647 mm
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Quick Checks – Initial areas of concern (themes)
1 1
1
2
2
One complaint alleged that a BT advisor had contacted a CP end user
directly after the CP had reported a fault. Openreach investigated the
complaint and found that a BT Business sales advisor had contacted
the end user’s company before the fault was reported and had been
made aware of the issue by the end user.
The final case related to the Openreach super-fast fibre access
website which the complainant alleged contained a statement that
only one CP (“BT”) was offering super-fast broadband and provided
a link to BT Retail. BT’s investigation found that inclusion on the
website is open to all CPs and that Openreach had communicated
this fact to CPs. The CP concerned has now supplied its details and is
included on the website.
9
1
1
4
3
2
Eol
Governance
NGN product
Systems
Ethernet
Legacy Voice products
SLU
Service Differentiation
GEA (NGA)
NGA voice products
Space and Power
Source: EAO
Issues management
The EAO looks into issues raised informally by key stakeholders
including BT, non-BT CPs, Ofcom and the Office of the
Telecommunications Adjudicator as part of its ‘Quick Checks’ process.
The process allows the EAO to record and track issues and assess
rapidly whether they need more detailed, formal investigation. NonBT CPs have told the EAO that they find the process a useful way of
resolving their concerns without needing to submit a formal complaint,
and the process also gives the EAO the opportunity to provide
impartial advice to BT on the resolution of some of these concerns.
As the chart below shows, three investigations resulted in the EAO
recommending actions to BT and two investigations influenced the
scope of the EAO’s review of the Ethernet portfolio. Another resulted
in a breach investigation which identified the issues around EAD
security accreditation included in the breaches table on p12.
Outcomes of closed Quick Checks
2
2
3
In 2010/11, the EAO investigated 27 issues. The largest number of
issues were raised by those CPs concerned about the development of
Ethernet products. There were also concerns raised about the
development of NGA products such as GEA. Other concerns included
space availability in BT exchanges and sub-loop unbundling. The
EAO also investigated issues raised by CPs in Northern Ireland. The
range of issues is shown in the chart opposite:
6
2
1
11
Not applicable to the undertakings
Potential breach indentified
Actions recommended to BT and CP briefed
EAO review initiated
No actions recommended BT and CP briefed
Actions recommended to BT
(internal only)
No actions recommended to BT (Internal only)
Source: EAO
14 EAB Annual Report 2011
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In eleven cases the EAO concluded that there were no compliance
concerns and that BT had no case to answer. With the other cases, it
found that the most common root causes were a combination of
human error, poor communication, ineffective governance or
inefficient project management. The EAO ensures that it briefs those
raising the issues fully on the outcome.
Bleed: 2.647 mm
Scale: 100%
Assessing risks
The EAB keeps a risk register to track the most important areas of
concern where non-compliant incidents are most likely to occur. It
identifies risks based on its monitoring of EoI obligations, its ongoing
compliance checks, its review work described in ‘Monitoring, reporting
and advising’ on p19-20 and incidences of non-compliance. It reviews
risk twice a year and makes recommendations to BT.
In its 2009/10 report, the EAB identified a range of risks which shaped its monitoring work during 2010/11. It undertook a number of actions
to further investigate these risk areas and made recommendations to BT:
Risk
Proposed actions
Outcome
1. Openreach’s SoR process – operation and industry
confidence
The EAB proposed to conduct a follow up review during
2010/11.
The EAB completed this review. See p8 for more
information. It identified some concerns which still need
to be addressed.
2. NGA – risk of launch of non-EoI products and/or noncompliance with passive input obligations
The EAB proposed to conduct reviews of the NGA
product launch process and Openreach’s engagement on
NGA with external entities (such as the Regional
Development Agencies).
The EAB completed a review of Openreach’s commercial
engagement. See page 6 for more information. Its
ongoing compliance programme identified some further
risks associated with NGA.
3. Ineffective compliance governance processes (e.g.
product management and the escalations process)
The EAB proposed to review Openreach’s product
management process, including how commercial
differentiation is used in bids and solution development
and aspects of service management including the
escalations process.
The EAB completed a review of Openreach’s approach to
commercial differentiation. See p23 for more
information. In reviewing the product management and
escalations processes it found that while there had been
some previous breaches, improvements had been made.
As a result, the EAB was largely satisfied that BT had
effective governance processes in place.
4. Prioritisation of BT product developments over those
of CPs (undue influence of Openreach decisions)
The EAB proposed to assess whether the competing
product investment demands of BT’s downstream
businesses prejudiced the investment decisions required
to support Openreach requirements.
The EAB has investigated this point as part of its informal
investigations process and found no issues.
5. Inappropriate access to core hybrid systems
It was scheduled for PwC to conduct audits of the
effectiveness of user access controls applied to core
hybrid systems and there will be ongoing internal
quarterly analysis of these controls.
An audit was completed on the application of user access
controls for core hybrid systems and one issue was
identified. See p3 for more information.
The EAB is satisfied that BT continues to put in place mitigating actions for many of the risks described, however it remains concerned over
compliance in some of the risk areas listed above.
Our conclusion on non-compliance
& risk
The number of non-compliant incidents remains low year-on-year
but there are a number of recurring themes that BT must continue to
address to prevent similar incidents from occurring and to maintain
industry confidence. There has been an increased number of formal
complaints received by both the EAB and BT this year and the EAB
will continue to monitor any emerging trends. These include
continuing to enforce messages on compliant information sharing
and ensuring that systems access controls are easy for employees to
use.
Understanding non-compliance & risk 15
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Outlook for
2011/12
The EAB takes a risk-based approach
to planning its forward-looking
monitoring plan by evaluating
non-compliant incidents and the
output from the previous year’s
validations work.
There are also a number of Undertakings obligations that must be
monitored on a one off and on an ongoing basis. These two
approaches are described below.
Risk area
EAB’s planned action
1. Openreach SoR process – operation and industry confidence
The EAO completed a review of the SoR process during 2010/11 and will continue to
monitor the functioning of the process on an ongoing basis.
2. NGA – risk of launch of non-EoI product(s) and/or non-compliance with passive input
obligations
The EAB will continue with its ongoing monitoring of NGA and will review whether EoI is
still applicable now that the products are operating at scale for both BT and non-BT CPs
and will look at the treatment of infrastructure bids such as those relating to BDUK.
3. Inappropriate information sharing
A detailed review of BT’s end-to-end programmes and ongoing compliance work.
4. Systems implementation for UK Business Stack, associated user access controls and
audit of ongoing compliance of existing OSS user access controls.
An external audit commissioned by the EAB is planned for Q1 to assess the ongoing
application of user access controls. In addition BT is due to provide the EAO with regular
reports in areas with a high ongoing risk.
5. Ineffective compliance governance processes (e.g. product management)
Follow up review on Openreach’s product management process and the supporting
governance framework.
The operation of Openreach’s SoR process remains the highest
potential risk for 2011/12 due to the low number of SoRs delivered
in the previous year. The EAO’s reviews of the SoR process during
2010/11 found that Openreach had made a number of
improvements, including increasing the transparency of the SoR
process and improving engagement with industry. The EAO will
continue to monitor that SoRs are handled equivalently on an
ongoing basis.
The top two risks stayed the same year-on-year. The equivalent
development of NGA products and BT’s compliance with the passive
input obligations retains a high position for 2011/12, partly because
it is a nascent market with a rapid rate of change. To date, the EAB
has confirmed that it is satisfied with Openreach’s compliance with
the NGA-related Undertakings, but it will monitor that Openreach
continues to engage with CPs to develop equivalent products.
The complexity of the systems separation work undertaken by BT
during the past year has made it challenging for BT to balance its
Undertakings obligations with its service mandate. During 2010/11,
BT succeeded in delivering nearly all of its systems obligations
compliantly but the EAO considers that they continue to be a risk
area because of their scale and complexity.
16 EAB Annual Report 2011
Forward-looking risk register
The EAB reviewed its risk register in February 2011 and agreed
that the top risks should retain their position in the register.
It considered the key risks during 2011/12 as:
Following its risk review, the EAO will continue to assess the
governance around some of the key processes associated with the
Undertakings. It also considers non-compliant information sharing
an ongoing risk that may continue to occur if BT stops
communicating frequent key messages on this subject across the
business.
The EAO gave some risks lower priority as part of its review. It no
longer considered BT’s escalations process – by which CPs can raise
concerns – a major risk. It has also seen less evidence of the
persistence of non-compliant legacy processes and fewer instances
of BT employees attempting to gain access to systems to which they
were not granted access. It also considered NGN a low potential risk
as a result of BT’s revised approach to implementation.
Although not in the top five risks, exchange space availability is one
of the most significant potential issues. The EAO will continue to
review the space availability process during the coming year.
Lastly, the EAO will increasingly focus on preparations for the
Olympics to ensure that any work is carried out in compliance with
the Undertakings.
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Forthcoming Undertakings
obligations
The largest group of Undertakings obligations due in the coming
years are the ongoing systems separation milestones. These were
rescheduled as part of a variation to the Undertakings in 2009 and
resulted in a wide range of obligations running up until 2014,
including the migration of customer-side records, the migration of
users to EoI products and ongoing obligations for the application of
user access controls for some systems. The EAB will continue to
monitor BT’s delivery of these obligations.
BT is due to deliver the UK business systems stack voluntary
milestones, which it agreed as part of the 2009 variation to the
Undertakings. The EAB was in the process of validating whether BT
had achieved the start of trial migrations by 31 March 2011 and BT
continues to report its progress to the EAB on a monthly basis.
However, the EAB has some concerns as to whether BT will be ready
to begin volume migrations in December 2011 as these are
dependent on the success of the early trial migrations. It will
continue to monitor the situation.
Other Undertakings obligations due in 2011/12 include an
annual review of BT’s exchange space and power obligations and
an obligation which requires the EAB to assess BT’s passive inputs
to NGA.
The EAB’s work is influenced by the outcome of forthcoming policy
decisions and market classifications. In particular, the development
of Ethernet products continues to be an area of debate and the
consideration as to whether these are subject to SMP or EoI
obligations is likely to continue throughout 2011/12. Ofcom’s
Business Connectivity Market Review which it started in April 2011
will determine the relevant economic markets, related bottlenecks
and remedies that should apply in the future.
The EAB will continue to stay focused on the principles and
requirements of the Undertakings over the coming year and will
report regularly on BT’s progress in its online bulletin.
Outlook for 2011/12 17
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The EAB
The Equality of Access Board was
established on 1 November 2005 as
part of the Undertakings offered by BT
to Ofcom.
The EAB is a committee of the BT
Group plc Board although its
structure, membership and
obligations to Ofcom make it unique.
The EAB has oversight of the whole of BT in its mission to monitor
compliance with the Undertakings. It has terms of reference setting
out its role, monitoring and reporting remit, its powers, how its
members are appointed and its organisation. See
http://www.bt.com/eab for more information.
The Undertakings require that the EAB has five members: three
independent members, one BT Group plc non-executive director and
one BT senior manager. In February 2011, Dr Tim Whitley, Group
Strategy Director, was appointed as the new BT senior manager to
the EAB. Himanshu Raja stepped down from the Board following his
appointment as Chief Financial Officer, BT Global Services.
1. Carl Symon, Chairman
Carl Symon was appointed a non-executive director
of BT Group plc on 14 January 2002. He retired
from IBM in May 2001 after a 32-year career,
during which he held senior executive positions in
the USA, Canada, Latin America, Asia and Europe.
Carl is a non-executive director of BAE Systems plc and Rexam plc,
a former non-executive director of Rolls-Royce plc and a former
Chairman of HMV Group plc.
18 EAB Annual Report 2011
2. Sir Bryan Carsberg, Independent
Sir Bryan Carsberg was Professor of Accounting and
Business Finance and Dean of the Faculty of
Economic and Social Studies at Manchester
University, before becoming Professor of Accounting
at the London School of Economics from 1981
to 1984. He was Director General of Oftel (the former
telecommunications regulator) from 1984 to 1992, Director General
of the Office of Fair Trading from 1992 to 1995 and Secretary
General of the International Accounting Standards Committee from
1995 to 2001. Sir Bryan is currently Chairman of Council and ProChancellor of Loughborough University. He holds a number of
non-executive board appointments. He is a Chartered Accountant.
3. Stephen Pettit, Independent
Stephen Pettit is a non-executive director of
National Grid plc and Halma plc. He is a former
executive director of Cable & Wireless plc. Before
joining Cable & Wireless, Stephen was Chief
Executive, Petrochemicals at British Petroleum. He
was previously Chairman of ROK plc, a non-executive director of
National Air Traffic Services, KBC Advanced Technologies plc and
Norwood Systems Limited.
4. Dr Peter Radley, Independent
Dr Peter Radley is a Fellow of the Royal Academy of
Engineering and has worked in the
telecommunications industry since 1965, involved
in pioneering fibre optics, GSM and Broadband.
Between 1991 and 2002 he held positions in Alcatel
with global responsibility for technology and marketing and as
Chairman and CEO for Alcatel UK. He was a founder of the
Broadband Stakeholder Group set up by the UK Government. Since
2002, Peter has been an independent advisor to a number of
organisations including the DTI and South East England Development
Agency and he is also chairman of technology start-up companies in
the broadband, IP and mobile sectors.
5. Dr Tim Whitley, BT senior manager
Dr Tim Whitley is Group Strategy Director. He started
working for BT in 1981 as an apprentice engineer in
North Wales, and has since held roles in areas
including optics research, technology consultancy
and global technical architecture.
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The EAB is supported by the EAO and the EAB Secretary on all matters within its remit. The EAO reports regularly to the EAB on the detailed
status of BT’s delivery of the Undertakings. It carries out investigations into complaints made by CPs and into possible breaches of the
Undertakings on the EAB’s behalf.
During 2010/11, the EAB Secretary organised four Board meetings as well as a number of other informal sessions which enabled the EAB to
receive a wide range of input to its deliberations. Minutes have been provided to Ofcom and the EAB Chairman regularly reported the EAB’s
views to the BT Group plc Board.
How we work
Audit & Validation Plan
Milestone validations
Product KPIs
CPs
EAO
CPs
BT
Complaints
Complaints & breaches
Behavioural measures
Exemptions & Variations
EAO monitoring report
Issues Management
EAO reviews
EAB breaches process
Regular & Ad
Hoc BT Reports
EAB Meetings: deliberation & decisions
Direct CP Views
EAB minutes & overviews
EAO assessments
Annual Report
Ofcom briefing
Monitoring, reporting and
advising
The EAB monitors BT’s delivery of key Undertakings, reports on
progress to Ofcom and industry and offers advice to BT on its
compliance with the Undertakings.
Monitoring
The EAB conducts a wide range of monitoring activities to assess BT’s
compliance with the Undertakings. On the EAB’s behalf, the EAO
monitors BT’s delivery of the milestones listed in the Undertakings.
Many of these were delivered in previous years, but a variation in
September 2009 led to a change in dates for some systems
separation milestones.
The EAO also assesses BT’s ongoing compliance with obligations from
previous years. It runs an Audit and Validation plan through which it
The EAB 19
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audits BT’s ongoing compliance with specific sections of the
Undertakings on a rolling basis.
The EAB also agrees a programme of ongoing compliance reviews
based on areas of known or potential risk. In devising the
programme, the EAB considers common themes arising from breach
cases or issues identified during the EAO’s monitoring work. The EAB
also takes account of the findings of relevant internal and external
audit reports that have assessed BT’s delivery of the Undertakings, as
well as issues raised by stakeholders.
The EAB’s monitoring methodologies are included in the table below:
Approach to
monitoring
EAO activity
Application
Milestone-based
Full scale product validations
examining delivery by set
timescales. Also covers
products due by dates
amended by exemptions and
variations to the Undertakings.
Current generation
products, e.g.
WLR3, LLU.
Principles-based
Regular monitoring of agreed
areas of focus through
attendance at working groups
and meetings with key
stakeholders. Also includes
product validations with launch
dates at BT’s discretion.
NGN and NGA.
Monthly, quarterly or annually Product KPIs, behavioural
recurring reviews of areas
monitoring, systems
mandated by the Undertakings. access (e.g. the new
obligations in relation
to systems).
Ongoing compliance
A rolling programme testing
all other non-milestone
related Undertakings
obligations. It also includes
detailed reviews and ‘spot
checks’ of areas identified
through risk assessment.
Investigation of key
risk areas (e.g.
information sharing)
through compliance
spot checks and full
scale reviews.
Investigations of breaches
and complaints reported to
the EAB by BT and those
found by the EAO, as well
as complaints received from
CPs via its formal complaints
process.
Breaches notified by
BT as found by the
EAO or complaints
reported to the EAB
or BT.
20 EAB Annual Report 2011
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The EAB applies similar criteria across all of its monitoring activities:
Blue
Undertaking delivered or review completed.
Green
Undertaking delivery on track, or in the case of ongoing
compliance, review completed with no issues identified.
Amber
Undertaking is at risk, or in the case of ongoing compliance,
issues identified.
Red
Undertaking date has been missed or is in jeopardy,
or review has identified major deficiencies or issues.
The EAO Director makes the decision to move the delivery status
from Green to Blue before reporting the outcome to the EAB,
although this authority is delegated for more minor obligations. This
applies to both the delivery of milestones and the completion of
ongoing compliance reviews. As part of its assurance opinion,
PricewaterhouseCoopers LLP (PwC) assesses the EAB’s work across all
of these monitoring areas. Those activities referred to in its assurance
opinion are marked by
throughout the report.
Reporting
Regular compliance
Breaches and
complaints
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The EAB is required by the Undertakings to conduct an annual review
of BT’s compliance with the Undertakings, and upon completion
send a report to Ofcom. It is also required to publish a summary
report which is to be made available on BT’s website. Currently, the
EAB aggregates all of its findings into one report and publishes it
alongside the BT Group plc Annual Report.
The EAB is required to report on areas including its views on the
governance of the Undertakings, BT’s delivery of major milestones,
potential future breaches and the findings of the product KPIs.
The EAB also publishes a regular update about its activities on its
website: http://www.bt.com/eab.
Advising
The EAB advises BT on areas where it needs to improve its
compliance with the Undertakings. During 2010/11, the EAB made
recommendations to BT on topics such as SoRs and service
differentiation.
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Stakeholder engagement
The EAB has three stakeholders in the UK: CPs and industry
associations in the UK telecommunications industry, Ofcom and BT.
During 2010/11, exponential-e, and the Chairman of the Office of
the Telecommunications Adjudicator attended EAB meetings. The
EAO continued to hold meetings with CPs and industry associations,
as well as attending the Connectivity Services (Ethernet) forum, NGA
working groups and Consult21. The EAO also continued to maintain
contact with CPs in Northern Ireland by attending the Northern
Ireland Telecom Stakeholder Forum.
The EAB holds regular meetings with Ofcom. The Ofcom CEO
attended an EAB meeting in January 2011 and the EAO has regular
meetings with Ofcom policy directors. The EAO has also met the
Office of the Telecommunications Adjudicator regularly to discuss
progress.
The EAB met a range of BT stakeholders during the year. This
included the BT Group CEO and BT Retail gave its perspectives as a BT
CP on topics such as the SoR process. The Openreach CEO provides a
quarterly update to each meeting.
In December 2010, the EAO Director chaired a meeting of other
supervisory bodies involved in overseeing the implementation of
functional separation. Those attending were Telecom Italia’s
Supervisory Board, Telecom New Zealand’s Independent Oversight
Group and TeliaSonera’s Equality of Access Board. Japan’s NTT also
attended as Japan is in the early stages of considering a functional
separation model. Representatives from the European Commission
and the Body of European Regulators for Electronic Communications
(BEREC) also attended.
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Our view on our governance and
resourcing
The EAB has considered its governance arrangements against the
criteria listed below. It is satisfied that they are functioning well and
are effective in monitoring progress and advising BT on future steps.
The EAB is also satisfied with the level of resourcing available to
enable it to fulfil its remit.
How we formed our opinion
The EAB is required by the Undertakings to give its opinion on its
governance arrangements and whether BT is providing it with
adequate resources to fulfil its role. In reaching our conclusion, we
looked at:
• The confidence of the EAB in the quality of information received
from BT and the EAB’s access to senior BT executives
• Development of the EAB’s monitoring process in response to
variations to the Undertakings
• The quality and timeliness of the reports submitted by the EAO to
the EAB
• The performance of the EAO’s breach and complaints processes
• The findings of the BT Internal Audit review of the EAO in Q4
2010/11
• The relevant skills and experience of the EAB members
• The EAO’s access to information held by BT
• The adequacy of the process for compiling annual reports and the
ability of the EAB to have unfettered influence on the detailed
content and conclusions of the report
• The views of the EAO Director on the level of resources at the
EAB’s disposal.
The EAB 21
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Wider governance of the
Undertakings
BT has a company-wide responsibility to deliver its Undertakings commitments. The EAB engages with each of BT’s lines of business to
monitor compliance with the Undertakings.
The EAB’s role within BT’s reporting structure
Ofcom
EAB
BT Group Plc Board
Public reporting
BT CEO
Operating Committee
Openreach
BT Wholesale
BT Retail
BT Global Services
Group Functions
BT Innovate and Design
BT Operate
Enterprise Programme Steering Board and Undertakings Customer Delivery Board
Management reporting
Compliance oversight
The EAB is required to assess the effectiveness of the governance
framework that BT has put in place to support the Undertakings. It
has oversight of BT’s operations as shown in the diagram above.
BT’s governance structure to support the delivery of the
Undertakings has continued to evolve over the past five years.
During 2010/11 it consisted of:
• The Enterprise Programme Steering Board (PSB): this forum is the
most senior governance body within the programme and has a
group-wide responsibility for setting policy and direction,
managing priorities, resolving risks and issues and ensuring
consistency across BT’s business units.
• BT Undertakings Customer Delivery Board (CDB): this forum
provides pan-BT monitoring and governance across workstreams.
It ensures effective risk and issue mitigation and reporting.
• Workstream Execution Boards: the programme is divided into
three key workstreams: UK Business Solutions, Migrations and
Openreach Industry Commitments, each of which has its own lead
who is responsible for the governance of a portfolio of projects via
their own Execution Boards.
22 EAB Annual Report 2011
Compliance reporting
• The Undertakings programme: consists of an Undertakings
representative in each line of business – reports progress, plans
and issues into the leadership team within BT Innovate and Design
on a monthly basis via its own Customer Delivery Board/Execution
Board to ensure that any major delivery issues are resolved.
• Breach Review Group: consists of Undertakings and legal
representatives across the business and assesses the status of
potential breaches.
The Undertakings programme reports into the BT Design Council on a
monthly basis. It also reports to the BT Operating Committee on a
quarterly basis to ensure that the programme is cost-effective and is
consistent with BT’s strategic direction.
BT has a responsibility to ensure that its employees have the
necessary tools and training to comply with the Undertakings. The
company issued a Code of Practice to BT employees in the UK in
December 2005. This was updated and re-launched in March 2008.
E-learning courses, based on the revised Code, were launched at the
end of June 2008. These are designed to ensure that BT people are
familiar with the Undertakings and their associated responsibilities.
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BT reports the percentages of employees in the UK who have
completed the revised e-learning module. By 31 March 2011,
completions were:
Percentage of Completion
Manager and Team Member Undertakings training completion
100
98
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customers while remaining equivalent. The review focused on two
examples – bespoke pricing and the Service Management Centre
process for temporary solutions to urgent service problems.
The EAB found that Openreach had shown good governance during
the design and implementation phases of these two initiatives and
that it remained compliant with the Undertakings. It concluded that
there will continue to need to be a balance between Openreach’s
compliance with the Undertakings and its ability to offer innovative
and urgent solutions to customer problems.
96
94
92
90
BT
Operate Openreach Innovate Global Wholesale
& Design Services
UK Based BT Managers - Target 95%
Retail
Group
The EAO also attends the systems roadmap sessions and product and
industry working groups run by Openreach and it considers that
these are running effectively and continue to be a useful vehicle for
engaging with industry.
UK Based Team Members - target 90%
Source: BT
Openreach, BT Wholesale and BT Operate achieved completion rates
of over 95% for both managers and team members. BT Group, BT
Global Services and BT Retail have fallen below target. Contractors
have also fallen below target.
Each part of the business also puts in place measures to encourage
compliant behaviour. Both Openreach and BT Wholesale send out
targeted surveys to test equivalence knowledge. For more
information on this and other behavioural measures see p31.
The EAB and BT’s governance framework
The EAB conducts reviews of different aspects of BT’s governance of
the Undertakings on a year-on-year basis.
As part of its regular monitoring of NGA and NGN, it reviewed the
governance processes in place in these two development
programmes. It conducted a review of the NGA governance
framework and found that it was functioning effectively and there
were high levels of engagement through industry working groups.
With NGN, it found that BT was complying with its Undertakings
obligations to run Consult21 sessions. There was a change to the
governance arrangements for NGN with a Delivery Board run by BT
Innovate and Design taking over the management of the 21CN
programme.
The EAO liaises regularly with the Undertakings programme offices
across BT and is satisfied that they are running an effective
compliance programme, although it continues to make
recommendations where improvements can be made.
The EAB has a particular role in overseeing Openreach’s governance
arrangements. In November 2010, the EAB completed a review of
Openreach’s approach to commercial differentiation, which is
Openreach’s way of offering different products and services to
Our view on BT’s governance
of the Undertakings
The EAB has considered BT’s governance framework against the
criteria listed below and is satisfied that it has a compliant
governance structure and process in place. The EAB also found that
the particular aspects of governance which it analysed as part of its
reviews and compliance spot checks during 2010/11 – such as its
review of the SoR process – were functioning effectively.
How we formed our opinion
The Undertakings require that the EAB forms an opinion on BT’s
governance arrangements associated with the Undertakings. In
reaching our conclusion we looked at:
• The measures in place to detect and address potential breaches
• BT’s processes to handle complaints relating to the Undertakings
• BT’s governance processes for 21CN and NGA
• The reviews conducted on specific aspects of BT’s governance
framework.
The EAB also took account of the following information resulting
from the implementation of these processes and the EAO’s own indepth reviews and audits of BT’s ongoing delivery of the
Undertakings:
• BT’s programme of reporting to the BT Group plc Board and the
relevant committees
• The findings of the EAO’s monthly monitoring reports on BT’s
compliance with the Undertakings, including steps being taken to
deliver future commitments
• Half yearly reports from BT to the EAB of its progress in
implementing and measuring behavioural change
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• The EAO Director’s quarterly report to the EAB which, inter alia,
tracks and comments on governance developments
• Quarterly operational reports from the Openreach CEO, on the
measures being taken to ensure and maintain a compliant
organisation
• The views expressed by individual CPs in presentations to the EAB
• The EAO’s quarterly reports on complaints relating to the
Undertakings which include an assessment of BT’s complaints
handling arrangements
• Experience of reporting to the EAB on breach investigations and
follow-up by BT and the EAO
• The results of the EAO’s issues management (Quick Checks)
process where all the issues raised by CPs, BT or the EAO itself are
assessed to determine if they require further investigation
• The findings of the EAO’s ongoing compliance audits as detailed
in the EAO’s Audit and Validation Plan which includes exemptions
and variations to the Undertakings that BT has agreed with
Ofcom.
24 EAB Annual Report 2011
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Undertakings
status indicators
BT’s delivery of key Undertakings
milestones to date
This table lists the EAB’s view of the
status of all the key Undertakings that
were due to be delivered up to
31 March 2011, including those
delivered in previous years. Please
refer to the key for an explanation of
the different terms used in the table.
Monitoring the delivery
of major Eol products
The EAB monitors the delivery of major EoI products covered by the
Undertakings. Many of those with set delivery dates have been
delivered in previous years and the remaining WLR3 obligations were
removed in 2009/10. The EAB monitors the delivery of NGN and
NGA products to ensure that they are launched on an EoI basis, even
though these do not have set launch dates in the Undertakings.
Key
Achieved
Concerns
Removed
Not achieved
On track
Replaced
Undertaking
Date due
Milestone Status
Comments
IPstream EoI RFS
31 Dec 2005
Relevant Broadband service using EoI IPstream/IBMC
31 Dec 2006
Undertaking
Date due
LLU EoI RFS
30 June 2006
Non-trivial breach resulting; BT paid allowances to CPs. The EAB
confirmed that the breach was remedied in December 2006.
IPstream using EoI LLU IBMC
31 Dec 2006
Non-trivial breach; BT completed delivery end of Aug 2007.
Undertaking
Date due
WES, BES, WES Backhaul and WEES EoI RFS
30 Sept 2006
Relevant Retail Ethernet Service using EoI WES IBMC
31 Mar 2007
Undertaking
Date due
WLR Analogue EoI RFS (informal milestone)
31 Dec 2006
WLR Analogue EoI RFS
30 June 2007
WLR Analogue IBMC 30% target
30 June 2008
Milestone reached November 2008.
WLR Analogue IBMC 70% target
30 June 2009
Milestone reached September 2009.
WLR Analogue IBMC 100%
30 June 2010
Revised obligation included in OSS variation.
Undertaking
Date due
WLR ISDN2 EoI RFS
30 Sep 2007
Trivial beach regarding some new end-user orders.
BT’s Retail ISDN2 using EoI WLR ISDN2 IBMC
31 Mar 2009
Non-trivial breach; revised obligation included in OSS
variation.
Milestone Status Comments
Milestone Status Comments
Milestone Status Comments
BT paid allowances to CPs.
Milestone Status Comments
Undertakings status indicators 25
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Milestone Status
Scale: 100%
Undertaking
Date due
Comments
WLR ISDN30 EoI RFS
28 Feb 2008
(was 31 Dec 2007)
BT’s Retail ISDN30 Service using EoI WLR ISDN30 IBMC
31 Dec 2009
Undertaking
Date due
IPstream Connect available for order; start of BT and CP
end-user base migration
31 Oct 2008
Achieved ahead of schedule.
IPsream Connect IBMC and migration of CP end-user base
31 Mar 2009
Achieved ahead of schedule.
Revised obligation included in OSS variation.
Milestone Status Comments
Systems separation obligations
The EAB monitors the delivery of systems separation through either full physical separation of systems, or through the implementation of
user access controls. During 2009/10 there was a variation to the Undertakings that resulted in changes to the delivery dates for
systems separation.
OSS separation – User access controls and physical separation
Undertaking
Date due
User Access Controls for WLR3, SMPF, MPF and ISDN2
30 June 2007
Operational support systems separation independent external
audit of User Access Controls including ISDN2 and ISDN30
30 June 2008
Implement physically separate OSS for WLR manual exception
tasks
31 May 2009
Non trivial breach; milestone removed by OSS variation.
Additional audit of User Access Controls
30 June 2010
Achieved early.
Implement User Access Controls for OSS listed in Annex 6
30 June 2010
The EAB commissioned PwC to audit the implementation.
Implement physically separate access and user access controls
for BT people not listed in 5.44.6 (a)
30 June 2010
The EAB commissioned PwC to audit the implementation.
OSS physical separation
30 June 2010
Milestone removed as part of OSS variation; BT now has to
deliver physical separation when “reasonably practical and
proportionate”.
EAB to perform quarterly checks of access to OSS listed in
Annex 6 starting in June 2010
From June 2010
onward
Moved to six monthly in agreement with Ofcom.
26 EAB Annual Report 2011
Milestone Status
Comments
Mostly delivered by the required date, but only fully met in late
September 2007 due to a trivial breach.
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Migration to EoI products
Undertaking
Date due
At least 90% of BT’s relevant installed End-User base shall be
migrated so that the products that this base purchases, that
consume the Measured Products, do so on an EoI basis
from AS;
30 June 2010
BT to advise Ofcom of the further increased percentage
migrations of both the relevant installed End-User base
and BT’s Customer Side Records to be achieved by the
30 June 2014
31 Dec 2011 (latest) or
6 months after
completion of business
stack migration
(if earlier)
At least 95% of BT’s relevant installed End-User base shall be
migrated so that the products that this base purchases, that
consume the Measured Products, do so on an EoI basis
from AS
31 Dec 2012
BT to achieve further increased percentage migrations
previously notified to Ofcom by 31 Dec 2011
30 June 2014
Milestone Status
Comments
Milestone Status
Comments
Customer records migration
Undertaking
Date due
Ready to mass migrate PSTN customer side records
31 March 2008
50% of relevant customer side records migrated to physically
separate OSS
30 Nov 2008
50% of non-WLR supply side records migrated to physically
separate OSS
31 Jan 2010
Non trivial breach; milestone removed by OSS variation.
Ready to mass migrate customer side records relating to
Featureline
30 June 2009
Non trivial breach; revised obligation included in OSS
variation.
90% of relevant customer side records migrated to physically
separate OSS
30 Sept 2009
Revised obligation included in OSS variation.
90% of non-WLR supply side records migrated to physically
separate OSS
31 Jan 2010
Removed by OSS variation.
90% of users migrated to physically separate OSS for WLR
manual exception tasks
31 March 2010
Removed by OSS variation.
At least 80% of BT’s Customer Side Records relating to the
Measured Products held on Operational Support Systems
shared between AS and the rest of BT are migrated to at least
Level 2 System Separation
30 June 2010
Undertakings status indicators 27
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Milestone Status
Scale: 100%
Undertaking
Date due
Comments
BT to advise Ofcom of the further increased percentage
migrations of both the relevant installed End-User base
and BT’s Customer Side Records to be achieved by the
30 June 2014
31 Dec 2011 (latest) or
6 months after
completion of business
stack migration
(if earlier)
Implementation and ongoing application of the obligations
in relation to Customer Side Records in section 5.44.2 is
subject to an audit commissioned by the EAB on an ongoing
basis at least every 24 months from 30 June 2010
30 June 2012 (latest)
Initial audit of achievement of 80% migration milestone
has been completed.
At least 90% of BT’s Customer Side Records relating to the
Measured Products held on Operational Support Systems
shared between AS and the rest of BT are migrated to at least
Level 2 System Separation;
31 Dec 2012
Delivery plan not yet fully in place.
BT to achieve further increased percentage migrations
previously notified to Ofcom by 31 Dec 2011
30 June 2014
UK Business Stack implementation (non-binding milestones)
Undertaking
Date due
Milestone Status
Comments
Business Stack – Operational Trial Starts
30 April 2010
Business Stack – Initial Live Deployment
31 Dec 2010
Business Stack – Trial Migration Begun
31 March 2011
An EAB validation was in progress at the time this report was
published.
Business Stack – Volume Migration Begun
31 Dec 2011
The achievement of this milestone is dependent upon the
successful completion of trial migrations during the summer
of 2011.
MIS and other systems separation
Undertaking
Date due
Milestone Status
Comments
Management Information Systems separation
22 Oct 2006
MIS roadmap
30 June 2007
MIS Level 2 separation
30 June 2010
BT did not implement L2 separation for all its MIS.
Non-OSS and non-MIS Level 1 separation
30 June 2010
Although the milestone was achieved, ongoing compliance is
high risk due to the simplistic solutions adopted by BT.
NGA related Undertakings cease to apply to future
deployments (conditional)
31 December 2010
The number of end user premises capable of being served by
a BT FTTC enabled cabinet has exceeded 500,000 before
31 December 2010.
BT to consult on demand for FTTC Passive Inputs and Backhaul
over fibre
31 December 2011
BT and Ofcom to review NGA Undertakings
31 December 2011
Includes Level 1 separation for Annex 5 systems and Level 2
separation for others.
NGA related Undertakings
28 EAB Annual Report 2011
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Next Generation Access
monitoring themes
The EAB monitors six areas of compliance for NGA:
NGA theme
Status
Activity
Consultation and engagement
Openreach continues to engage with industry through working groups and fora, including the NGA Forum
and the FTTC and FTTP Trialist Working Groups. CPs have told the EAO that in general they are satisfied with
Openreach’s approach to engagement.
Products
The EAO has completed the validations listed on p6 and is satisfied that BT is developing products on
an EoI basis.
Equipment and locations
The EAO has found that all NGA developments and products use existing Openreach exchange space and
power products, and there is also the option for CPs to use their own infrastructure.
Backhaul
No CPs have raised concerns with the EAO on this topic so it concludes that Openreach is fulfilling
its obligations.
Passive components
The EAO is awaiting evidence from Openreach – including a consultation on passive inputs, expected to take
place during 2011 – so that it could assess whether the GEA over FTTC product was complying with all passive
input obligations.
Governance
The EAO completed a review of the NGA programme governance and found that the governance structure
was working well but there could be more engagement with CPs supplying to business customers. Openreach
has sought to address this concern accordingly.
Key
NGA theme
BT activity
Consultation and engagement
Openreach is required to consult with industry on key changes and product developments.
Product and systems
Products are designed, launched and CPs’ users migrated to the new product on an EoI basis.
Equipment and locations
NGA solutions are not made unattractive to CPs, either because of cost or availability of equipment, space or power.
Backhaul
The NGA product does not preclude or dictate the choice of backhaul for CPs or make the product commercially unattractive because of
the cost or limitations of the backhaul solution.
Passive components
New theme as a result of the FTTC variation, which includes:
•
•
•
•
Governance
A requirement to consult with industry on any changes to passive components.
Design considerations that should not foreclose passive remedies.
Openreach should use the same components, processes and systems it uses itself for the purposes of its active product where
reasonable and on the most cost-efficient basis.
The EAB to monitor the provision of the FTTC inputs in accordance with metrics to be agreed by BT and Ofcom.
A range of obligations including the use of statement of requirements processes on the same basis for all CPs, appropriate sharing of
customer confidential and commercial information and all transactions to be carried out on an EoI basis.
Undertakings status indicators 29
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Next Generation Network
monitoring themes
The EAB monitors nine key monitoring themes for NGN:
NGN theme
Status
Activity
No foreclosure of network access
The EAO has observed that even though the overall programme has been scaled back, the standard of
engagement remains high.
Charges based on efficient design
No activity.
Provision of network access on an EoI basis
No further product developments planned at this time.
Provision of network access on a timely basis
No activity.
Broadband dialtone
No activity.
Industry group
No activity.
Operational dispute adjudicator
No activity.
Compensation arrangements
BT has provided the EAO with a quarterly update on the compensation arrangement negotiations.
There were no issues.
NGN implementation
BT has provided the EAO with quarterly performance statistics, and has also published the Plan of Record,
non-binding product roadmap and datasets required by the Undertakings.
Key
NGN theme
BT activity
No foreclosure of network access
BT must ensure that non-BT CPs can purchase SMP products using its 21CN infrastructure and on terms that allow them to compete
effectively with BT’s end-to-end services provided over 21CN. The company must ensure that it does not take design decisions that
would preclude the aforementioned obligations without industry consultation.
Charges based on efficient design
Where BT’s network access charges are required by SMP obligations to be applied on a cost-orientated basis, the costs should be what BT
would have reasonably incurred had the company designed and built its NGN in the most efficient manner. There are also some
exceptions to this obligation regarding further changes that could be made by Ofcom or through consultation with industry.
Provision of network access on an EoI basis
BT must ensure that SMP network access products provided over its NGN are offered on an EoI basis from launch, although this doesn’t
apply to all products.
Provision of network access on a
timely basis
Where BT launches a new downstream product using NGN network access in an SMP market, it must ensure the network access
is available sufficiently in advance of the launch, such that non-BT CPs are able to launch competing downstream products at the
same time.
Broadband dialtone
BT could potentially use its 21CN to enable connections to its broadband service via software control alone rather than the manual
engineering required for LLU. This facility is known as ‘broadband dialtone’ and BT is obliged to ensure that LLU CPs are not materially
disadvantaged solely as a result of this software-controlled migration.
Industry group
BT must participate in any industry group established by Ofcom to agree aspects of the transition from existing networks to NGNs.
Operational dispute adjudicator
BT must agree to participate in any 21CN operational dispute adjudication scheme established by Ofcom.
Compensation arrangements
BT’s migration to 21CN may impact non-BT CPs in a number of ways. The Undertakings set out principles to be applied if BT has agreed to
pay compensation to non-BT CPs and if they incur increased network costs.
NGN implementation
The Undertakings allow for BT lines of business to co-operate with each other to carry out the design, build and implementation of NGN.
30 EAB Annual Report 2011
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Behavioural dashboard
BT employees must comply with the Undertakings in the way that they behave when working with colleagues and dealing with customers. The
EAB monitors BT’s progress towards encouraging Undertakings-related behavioural change by assessing a range of behavioural indicators:
Measure
Status
Openreach, BT Wholesale and BT Operate achieved completion
rates of over 95% for both managers and team members. BT
Group, BT Global Services and BT Retail have fallen below
target. Contractors have also fallen below target.
Manager and Team Member Undertakings training completion
Percentage of Completion
Comment
100
98
Each part of the business also puts in place measures to
encourage compliant behaviour. Both Openreach and BT
Wholesale sent out targeted surveys to test equivalence
knowledge.
96
94
92
90
BT
Operate Openreach Innovate Global Wholesale
& Design Services
Retail
Group
UK Based Team Members - target 90%
UK Based BT Managers - Target 95%
Source: BT
Openreach brand awareness
Openreach reports to the EAB on brand awareness. At 31 March
2011, consumer awareness was 41% and business awareness
was 72%. Openreach states that these levels show higher
percentage increases year-on-year than are typical for large
organisations.
100
80
60
40
20
0
Consumer
Business
Q2 2010/11
Consumer
Business
Q4 2010/11
% Brand Awareness
Source: Openreach
The measure for Openreach “Delivering Products Equivalently”
has risen to 77% at the end of Q4 2010/11 which represents a
13% increase since April 2010.
Mar-11
Feb-11
Jan-11
Dec-10
Nov-10
Oct-10
Sep-10
Aug-10
Jul-10
Jun-10
May-10
80
78
76
74
72
70
68
66
64
Apr-10
% customers agree
Openreach delivers products equivalently
Source: Openreach
Undertakings status indicators 31
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Measure
Status
BT Wholesale delivers products equivalently
Scale: 100%
Comment
This measure has stayed the same year-on-year at 81%.
Mar-11
Feb-11
Jan-11
Dec-10
Nov-10
Oct-10
Sep-10
Aug-10
Jul-10
Jun-10
May-10
87
86
85
84
83
82
81
80
79
78
Apr-10
% customers agree
Bleed: 2.647 mm
Source: BT
This measure was relatively stable throughout 2010/11
finishing the year 1% short of target.
Satisfaction with Openreach engineers
Openreach published a booklet for engineers containing key
messages to share with customers. The aim of the booklet was
to reinforce the correct behaviour when dealing face-to-face
with customers, for example not recommending BT’s services
above those of other CPs’.
% appropriate behaviour
100
95
90
85
80
75
Mar-11
Feb-11
Jan-11
Dec-10
Nov-10
Oct-10
Sep-10
Aug-10
Jul-10
Jun-10
May-10
Apr-10
70
Source: Openreach
BT Wholesale received 84 new SoR requests during the year,
showing that CPs are using the process. A total of 39
requirements were delivered, a high percentage of which
originated from non-BT CPs. The EAB believes that the
BT Wholesale SoR process is operating on an equivalent basis.
BT Wholesale SoR process
April 2010 to March 2011
60
Number of SoRs
50
Information on Openreach’s SoR process is included on p9.
40
30
20
10
0
Received
Pending
SoRs raised by non-BT CPs
Source: BT
32 EAB Annual Report 2011
Delivered
Accepted
SoRs raised by BT CPs
Rejected
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Product KPIs
Scale: 100%
WLR3 Analogue Repair
The KPIs are shown as line charts with one line representing the
product performance experienced by BT CPs and the other the
performance as experienced by non-BT CPs. If the two lines are
consistently different it may indicate that there is an equivalence
issue. However there are several factors that can cause differing
performance and these don’t necessarily constitute a breach of the
Undertakings. Tests are also applied to assess whether any difference
is statistically significant. These factors are explained on a productby-product basis below for a selected number of KPIs.
100
95
Percentage of faults repaired on time
The EAB assesses key performance indicators (KPIs) published by BT
showing the performance of BT’s EoI products. The KPI charts for
each product portfolio compare service provided to CPs within BT to
that for non-BT CPs.
90
85
80
75
70
65
60
Apr
10
May Jun
10
10
Non-BT CPs
Openreach
Aug
10
Sep
10
Oct
10
Nov
10
Dec
10
Jan
11
Feb
11
Mar
11
BT CPs
Source: BT
WLR3 analogue repair performance has generally favoured BT CPs
during the year. From June 2010 the performance chart was
influenced by Openreach’s implementation of its Service
Harmonisation initiative, which included newly defined service levels
and associated criteria that CPs could choose to purchase. The
difference between BT CP and non-BT CP performance can be
attributed to the fact that BT CPs generally order lower service levels
with longer timescales which are more easily met by Openreach.
Analysis of the individual service levels indicates that there are no
significant equivalence issues within each service level.
WLR3 Analogue Provision
100
99
Percentage of orders provided on time
Jul
10
98
97
96
95
Source: BT
WLR3 ISDN2 provision (EoI tactical)
WLR3 ISDN2 provision performance slightly favoured non-BT CPs
throughout 2010/11. The WLR3 ISDN2 provision KPI comprises a
series of sub-order types such as Starts, Stops, Ceases as well as New
Provides, which all have different average times to process. Non-BT
CP orders generally included a higher percentage mix of the simpler
Start, Stop and Cease orders (rather than New Provides) which
improved their performance and helps explain the differential.
WLR3 analogue provision performance has generally favoured nonBT CPs during the year. The WLR3 analogue provision KPI comprises
sub-order types such as New Provides, Migrations and Transfers,
which each have different average times to process. Non-BT CP
orders generally included a higher percentage mix of the more simple
Transfers and Migrations orders while a higher percentage of BT CP
orders required the installation of a new copper line. Extensive
analysis by the EAB has concluded that there are no significant
concerns regarding compliance with the Undertakings.
WLR3 ISDN2 repair (EoI tactical)
BT CPs have generally experienced better performance than non-BT
CPs throughout the year. This was due to a significantly higher
volume of failures for non-BT CPs than BT CPs which were attributed
to customer equipment faults. In addition, a single non-BT CP was
found to be not closing its faults in a timely manner, which
influenced the performance chart. The EAB will continue to
monitor these situations but currently has no equivalence concerns
with this product.
94
93
Apr
10
May Jun
10
10
Non-BT CPs
Jul
10
Aug
10
Sep
10
Oct
10
Nov
10
Dec
10
Jan
11
Feb
11
Mar
11
BT CPs
Undertakings status indicators 33
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WLR3 ISDN30 provision
WLR3 ISDN30 provision performance generally favoured non-BT
CPs throughout 2010/11. The WLR3 ISDN30 provision KPI metric
comprises a series of sub-order types such as Transfer, Managed
Modify and Modify orders as well as New Provides, which all have
different average times to process. Non-BT CP orders generally
included a higher percentage mix of the more simple Transfer,
Managed Modify and Modify orders which improved their
performance.
WLR3 ISDN30 repair
WLR ISDN30 repair performance for BT CPs and non-BT CPs has
remained broadly equivalent throughout the year and the EAB has
no equivalence concerns with this product.
LLU SMPF provision (basic provide)
Bleed: 2.647 mm
Scale: 100%
LLU SMPF repair
LLU SMPF repair
100
90
Percentage of orders provided on time
U10825_05_BT_ARA_EAB_p25-38:Layout 1
80
70
60
50
40
30
20
Apr
10
May Jun
10
10
Jul
10
Aug
10
Sep
10
Oct
10
Nov
10
Dec
10
Jan
11
Feb
11
Mar
11
LLU SMPF Provision
Non-BT CPs
100
BT CPs
Source: BT
Percentage of orders provided on time
99
LLU SMPF repair performance has generally favoured non-BT CPs
during the year. BT CP faults were spread over a much wider
geographical area than non-BT CPs and in many cases this included
remote locations, increasing the complexity of repair activity and
travel. The downturn in performance during July was caused by an
Openreach system fault which affected performance reporting.
98
97
96
95
94
93
When taking these factors into account the EAB considers that
there are no significant Undertakings compliance concerns with
LLU SMPF repair.
92
91
90
Apr
10
May Jun
10
10
Non-BT CPs
Jul
10
Aug
10
Sep
10
Oct
10
Nov
10
Dec
10
Jan
11
Feb
11
Mar
11
BT CPs
LLU SMPF migrations
The EAB is satisfied that performance for LLU SMPF migrations has
been broadly equivalent throughout the year.
Source: BT
SMPF Basic Provide performance has slightly favoured non-BT CPs
for the majority of the year. BT CPs experienced a higher percentage
of orders for rural locations than non-BT CPS, resulting in more
complexity, such as the removal of Digital Access Carrier System
(DACS) equipment. This process can result in a complex job which has
an adverse impact on BT’s performance when providing the product.
The downturn in SMPF Basic provide performance in August was a
result of two Openreach major system failures. When taking these
factors into account the EAB considers that there are no significant
Undertakings compliance concerns with LLU provision.
34 EAB Annual Report 2011
LLU MPF provision and repair
The provision performance for MPF generally favoured BT CPs
throughout the year. A very high percentage of BT CP orders are
‘multiple orders’ whereas nearly all non-BT CPs orders are ‘single
orders’. This means that when a BT CP order fails it often results in a
multiple customer order failure, whereas non-BT CP orders that fail
usually only affect one customer order. This affects the performance
chart and following analysis the EAB has found no Undertaking
concerns with this product.
There are too few BT CP repairs for MPF to make a valid comparison.
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EAD provision and repair
Bleed: 2.647 mm
Scale: 100%
Generic Ethernet Access
Volumes of non-BT CP orders for the new GEA product are currently
too low for the EAB to make a statistically valid comparison. The EAB
will monitor performance carefully during the coming year.
Ethernet Access Direct Provision
100
BT Wholesale
80
IPstream Connect Provision
70
100
60
99
50
40
30
Apr
10
May Jun
10
10
Non-BT CPs
Jul
10
Aug
10
Sep
10
Oct
10
Nov
10
Dec
10
Jan
11
Feb
11
Mar
11
BT CPs
Source: BT
Percentage of faults repaired on time
Percentage of orders provided on time
90
98
97
96
95
94
93
Ethernet Access Direct (EAD) provision performance has consistently
favoured BT CPs for the majority of the year. The EAB found that BT
CPs chose to purchase a higher volume of EAD circuits with a
managed service overlay as part of some of their large project orders
and this managed service resulted in a better performance. The
project managed service is available from Openreach to all CPs on an
equivalent basis under its “Project Services” contract. One feature of
the service is that Openreach demands more detailed order
information prior to order placement but which in turn leads to
generally higher provision success rates.
Extensive investigation and analysis by the EAB has concluded that
this additional step in the process explains the performance
differential and as a result there are no significant concerns regarding
compliance with the Undertakings. EAD provision was significantly
depressed for the months April to June as a result of an order
backlog. The EAB is satisfied that orders were handled equivalently
during this period. There are currently too few EAD repairs to make
a valid comparison.
Apr
10
May Jun
10
10
Non-BT CPs
Jul
10
Aug
10
Sep
10
Oct
10
Nov
10
Dec
10
Jan
11
Feb
11
Mar
11
BT CPs
Source: BT
IPstream Connect provision performance has generally favoured
non-BT CPs. The EAB has found that the Simultaneous Provide order
type (where the copper line and the IPstream broadband service are
provisioned at the same time) impacted on the overall result.
Simultaneous Provides are generally more complicated than standard
orders and therefore have a lower provision success rate than other
order types and BT CPs consume a much higher amount of
Simultaneous Provide orders than non-BT CPs. The EAB found no
Undertaking compliance concerns in this area.
WES provision and repair
The EAB remains satisfied that BT CPs and non-BT CPs are
experiencing similar performance for WES provision and repair.
BES provision and repair and WEES provision and repair
The performance of the very low volume BES and Wholesale End-toEnd Ethernet Services (WEES) products for both provision and repair
has been broadly equivalent for BT CPs and non-BT CPs during the
past year.
Undertakings status indicators 35
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IPstream repair
Bleed: 2.647 mm
IPstream migrations
IPstream Connect Migration
IPstream Connect Repair
100
102
95
90
85
80
75
Apr
10
May Jun
10
10
Non-BT CPs
Jul
10
Aug
10
Sep
10
Oct
10
Nov
10
Dec
10
Jan
11
Feb
11
Mar
11
Percentage of migrations successfully completed
Percentage of faults repaired on time
Scale: 100%
101
100
99
98
97
96
95
Apr
10
May Jun
10
10
Non-BT CPs
BT CPs
Jul
10
Aug
10
Sep
10
Oct
10
Nov
10
Dec
10
Jan
11
Feb
11
Mar
11
BT CPs
Source: BT
Source: BT
The chart above indicates that IPstream connect repair performance
has generally favoured non-BT CPs during the year. Analysis shows
that during the majority of the year BT CPs chose to use the Special
Fault Investigation (SFI) and Customer Controlled Special Fault
Investigation (CCSFI) repair processes more heavily than non-BT CPs
which by choice use these optional repair processes less heavily.
These processes appear to indicate a poorer performance when
compared with the standard repair process, because they are more
complex and take longer to carry out. They are however very
effective in dealing with faults reported on problem broadband lines
(for example longer lines). The new Broadband Boost repair process
has now largely replaced the older SFI and CCSFI processes and BT
CPs and non-BT CPs are now choosing to use Broadband Boost which
has narrowed the performance difference on the chart.
The EAB has found that IPstream Connect Migration performance
has been generally equivalent throughout the year. The performance
drop shown in the chart during June 2010 was caused by a large
project moving non-BT CP orders to another non-BT CP. The drop
during January 2011 was caused by a non-BT CP completing a high
volume order migration project.
Wholesale Broadband Connect
A statement by Ofcom in December 2008 led to the removal of
obligations for WBC in the competitive ‘Market Three’. During
December 2010, Ofcom confirmed the extension of the competitive
(unregulated for WBC) ‘Market Three’ from 69% to 77% of BT
exchange areas. Non-BT CP WBC order volumes in the regulated
Markets One and Two remained too low for the EAO to monitor
effectively.
Our view on the product KPIs
The EAB is satisfied that the product KPIs for a range of EoI products
show that there are equivalent services on offer for BT CPs and nonBT CPs. Some of the EoI products have KPI charts which show that
performance largely falls within the agreed limits. For others where
performance falls outside of the limits, this can generally be
explained by differences in the orders placed by CPs or specific
incidents. The EAO will continue to monitor trends in this area in the
coming year, particularly with the increasing scale of NGA volumes
and the new Ethernet products.
36 EAB Annual Report 2011
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Comparative Performance Charts
In the course of agreeing the OSS variation in 2009, Ofcom reflected
industry concerns that slower progress towards migration to the new
EoI products following changes to the remaining IBMC dates (see p2
for more information) might have adverse consequences on
equivalence. Accordingly, BT offered to provide Openreach
Comparative Performance Charts (CPCs) to the EAO.
The intent of the CPCs is to indicate whether Openreach’s service
performance levels for the EoI and non-EoI product variants
disincentivise the rest of BT from migrating to the EoI product
variants.
The CPC reports indicate whether or not BT may be getting better
performance by leaving its installed customer base on the non-EoI
(i.e. ‘classic’) product variant rather than migrating them more
quickly to the EoI variant (usually WLR3, but also WLR2 for ISDN2)
now that the IBMC dates have been reset.
Ofcom’s OSS variation statement said:
“Given the consultation responses Openreach will also advise the
EAO, at least quarterly, of the comparative performance stats
between EOI and non-EOI for the main product sets (PSTN, ISDN2,
ISDN30, WLR2, and WLR3) where the IBMC dates have been reset by
the variation.”
“Openreach will report to the EAO on a quarterly basis, from January
2010 at the latest, on key performance metrics comparing EOI and
non-EOI/legacy supply. Measures will cover installation times, early
life fault rates, fault repair times and repeat fault rates. The relevant
(high-volume) products covered include WLR Analogue, ISDN2 and
ISDN30.
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The CPCs provided to the EAO since October 2009 are not necessarily
comparing ‘like for like’ products, and some categories shown on the
charts may be consumed by a small number or even a single CP and
hence expose commercially confidential information. As a result, BT
and Ofcom have agreed that the charts should not be published.
However, Ofcom and BT have asked the EAB to publish its opinions
on the charts.
It is also important to note that the CPCs do not perform the same
function as the EoI product equivalence KPIs shown on the previous
page and they should be viewed independently as both the subject
matter and the statistical approach are different.
Two metrics are examined for both provision and repair processes for
each of the Analogue, ISDN2 and ISDN30 products:
Provision:
1. Time to install (in working days)
2. The percentage of provisions suffering early life failures.
Repair:
1. Time to clear the fault (in working hours)
2. The percentage of repairs requiring a repeat repair to clear.
To draw a conclusion, the EAB reviews both metrics to assess whether
BT would benefit by remaining on the non-EoI product variant. In
the case of a ‘mixed picture’ where one metric is an incentive and
one metric is a disincentive, the EAB assumes that it is unlikely to
have a significant impact on BT’s behaviour.
Ofcom continued: “We consider that this will place pressure on
Openreach to deliver broadly equivalent performance to CPs and
those BT downstream customers depending on non-EOI inputs. This
additional reporting and monitoring has been agreed between BT
and us subsequent to comments made in responses to the
consultation;”
Undertakings status indicators 37
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The EAB’s analysis of the CPC metrics from April 2010 – March 2011
CPC
Commentary
Analogue provision
The performance levels of one metric show that there appears to be a potential incentive and another measure shows a potential
disincentive for ensuring all new analogue telephony provisions are EoI. This ‘mixed’ picture means that it is unlikely therefore to have a
significant impact on BT’s behaviour.
Analogue repair
The performance levels show that there appears to be a potential incentive regarding repeat faults and a potential disincentive from an
overall repair performance perspective to encourage BT to migrate to an analogue EoI product. This ‘mixed’ picture means that it is
unlikely for there to be a significant impact on BT’s behaviour.
ISDN2 provision
ISDN2 provision is more complex than analogue telephony. This is because BT first moved to a tactical EoI service using a WLR2 variant
which is still in operation. It then migrated to a strategic WLR3 EoI variant. Low volumes also have an impact on determining a trend. That
said, the performance levels show that there appears no clear disincentive for migration to either EoI version.
ISDN2 repair
There is a potential incentive and a potential disincentive regarding repair performance to ensuring all ISDN2 circuits are migrated to EoI
systems. Once again, the volumes are very low and this ‘mixed’ picture means that it is unlikely for there to be a significant impact on BT’s
behaviour.
ISDN30 provision
There is a potential incentive and a potential disincentive to ensuring all ISDN30 provisions for all end users are processed on EoI systems.
Once again, the transaction volumes are very low, with little or none for the classic BT product. This ‘mixed’ picture means that it is
unlikely for there to be a significant impact on BT’s behaviour.
ISDN30 repair
For the majority of the year there has been only a potential disincentive to ensuring all ISDN30 products are migrated to EoI variant and
thus supported by the new systems. This potentially could impact on BT’s behaviour.
The EAB found no obvious examples of there being a clear and
consistent disincentive across all of the metrics of a particular
product to cause BT to delay moving to the EoI product and systems.
In most of the cases there was a mixed picture. For example, the EoI
product would perform better in one metric but worse in the other
metric. In some cases the CPCs indicate there will be a benefit in a
particular metric of a product; but in all but one case this is offset by
a disadvantage in another metric.
One area where this was less clear is ISDN30 repair, where for some
of the year the CPC metrics indicated that there was only disincentive
to migrating all ISDN30 products to the EoI platform. That said, the
EAB takes some reassurance that the migration of ISDN30 is shown
on the Business System Stack roadmap shared with the EAO and
Ofcom and so is clearly planned to take place. The EAB will continue
to monitor the planned activity roadmap in this area closely while it is
mindful that current volumes are very low.
On this basis, the EAB can provide some reassurance to Ofcom that
the metrics which it specified indicate that BT is not gaining a clear
advantage compared to non-BT CPs by remaining on non-EoI
products and systems longer than originally planned.
In addition, BT’s progress towards the delivery of its remaining
Undertakings obligations for current generation products and
systems would also support the CPCs in showing that BT is not
gaining an advantage by remaining on non-EoI products.
38 EAB Annual Report 2011
The variation agreed in September 2009 set out targets relating to
separation of BT’s systems. In relation to the movement of customer
records to separate systems, the EAB confirmed that BT had reached
the 80% target which was required by 30 June 2010. At the end of
January 2011, BT reported to the EAB that it had moved 84.28% of
its customer records to separate systems.
In relation to the migration of its customer base to equivalent
products, the EAB confirmed that by 31 March 2010, 90% of BT’s
residential customers were served on an equivalent basis, which
included the migration of over 12m consumer customers. At the end
of January 2011, BT reported to the EAB that it had migrated
92.16% of its customer base to equivalent products.
Now that BT has started migrating customers onto the new business
systems stack, it states that it is in the company’s interest to
complete the migration as quickly as possible to avoid running the
two costly systems stacks in parallel.
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Independent Assurance Report to the
Equality of Access Board and Ofcom
Respective responsibilities of the
Equality of Access Board and
PricewaterhouseCoopers LLP
We have been engaged to express an independent opinion on
selected aspects of the Equality of Access Board (“EAB”) Annual
Report for the year ended 31 March 2011 (the “Report”). The
preparation of the Report in accordance with the requirements of the
Undertakings given to Ofcom by BT Group plc (“BT” or the “Group”)
pursuant to the Enterprise Act 2002 effective 22 September 2005
(the “Undertakings”) is the sole responsibility of the EAB.
There are no generally accepted standards for reporting on
compliance with the Undertakings or in respect of related
performance measures. The reporting policies adopted by the EAB in
forming their opinions expressed within the Report are described in
the sections entitled ‘Monitoring Reporting and Advising’ on pages
19 and 20, and ‘How we formed our opinion’ on pages 21, 23 and
24 (the ‘Reporting Policy’).
Scope and approach
Our engagement was designed to provide assurance on:
• whether, in our opinion, the EAB’s opinions in respect of:
– its governance arrangements;
– BT’s governance framework associated with the Undertakings;
– BT’s delivery of the Undertakings during the year ended
31 March 2011; and
– the future risks associated with the Undertakings after 31 March
2011;
are fairly stated in accordance with the Reporting Policy. These
opinions, indicated by the
symbol, are shown on pages 11, 21
and 23 of the Report (the ‘EAB’s Opinions’).
In this regard, we planned our procedures to have a reasonable
expectation of detecting material misstatements or omissions in
the EAB’s Opinions. We obtained an understanding of the relevant
controls and procedures applied by the EAB and the Equality of
Access Office (‘EAO’) to generate, aggregate and evaluate
information in respect of the Group’s governance, delivery and
ongoing compliance with the Undertakings, including the EAO
monitoring and reporting, the audit and validation plan, the quick
checks, the exemptions and variations and the breaches and
complaints processes. We performed tests of these controls and
procedures and reviewed the work undertaken by BT’s Internal
Audit team on behalf of the EAB including, to the extent
considered necessary, review of detailed workpapers and reperformance of testing;
• whether, in our opinion, the Product Key Performance Indicators
for WLR3 Analogue Provision, WLR3 Analogue Repair, LLU SMPF
Provision, LLU SMPF Repair, Ethernet Access Direct Provision,
IPstream Connect Provision, IPStream Connect Repair and
IPstream Connect Migrations shown on pages 33 to 36 are
properly compiled from the underlying management information
of the Group. In this regard, we planned our procedures to
provide us with reasonable assurance they are properly compiled
from underlying management information. We completed tests
over data consolidation and reporting only and did not perform
testing over the generation of data within the underlying
management information systems of the Group.
In addition, we reviewed the minutes of EAB meetings, discussed
with employees of the Equality of Access Office the processes to
collate the Report and reviewed the remainder of the Report for
consistency with our knowledge of the Group in order to report
whether anything came to our attention to indicate that the
remainder of the Report is inconsistent with the findings of our work.
Our engagement includes the expression of an opinion on the
fairness of the EAB’s opinions in respect of BT’s governance
associated with the Undertakings, BT’s delivery of the Undertakings
during the year ended 31 March 2011 and future risks associated
with the Undertakings due after 31 March 2011. Our assurance
procedures, which are described above, focus on understanding and
evaluating the relevant controls and procedures applied by the EAB
and the EAO to generate, aggregate and evaluate information in
respect of the Group’s governance and compliance with the
Undertakings. We have not been engaged to provide any separate
independent assurance over the internal controls and other actions
implemented by the Group to ensure compliance with the
Undertakings. Accordingly we do not express an opinion in this
regard.
We planned and performed our evidence-gathering procedures to
obtain a basis for our conclusions in accordance with the
International Standard on Assurance Engagements 3000 (Revised) –
‘Assurance Engagements other than Audits or Reviews of Historical
Information’. We have not performed an audit, and therefore do not
express an audit opinion, in accordance with International Standards
on Auditing (UK and Ireland).
We believe that our work provides a reasonable basis for our
conclusions.
Considerations and limitations
The Group’s governance measures to ensure compliance with the
Undertakings represent a set of internal controls and other actions
designed to provide reasonable assurance regarding compliance, in
all material respects, with each of the Undertakings and to support
reporting of compliance with those Undertakings. Further, the EAB’s
Independent Assurance Report to the Equality of Access Board and Ofcom 39
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governance measures to monitor, assess and report on the Group’s
compliance with the Undertakings represent a set of internal controls
and other actions designed to provide reasonable assurance
regarding the assessment of compliance, in all material respects, with
each of the Undertakings. Because of the inherent limitations in any
set of internal controls, for example the degree of judgement
required in applying certain controls, internal controls may not
prevent, detect or report non-compliance with the Undertakings.
Also, projections of any evaluation of effectiveness to future periods
are subject to the risk that controls may have become inadequate
because of changes in conditions, or that the degree of compliance
with the policies or procedures may deteriorate.
This report, including the conclusion, has been prepared for and only
for the EAB and Ofcom for the purpose of allowing the EAB to meet
its requirements under the Undertakings and for no other purpose.
We do not, in giving this opinion, accept or assume responsibility for
any other purpose or to any other person to whom this report is
shown or into whose hands it may come save where expressly agreed
by our prior consent in writing.
Conclusions
In our opinion:
• the EAB’s Opinions, indicated by the
symbol, on pages 11, 21,
23 and 24 of the Report are fairly stated in accordance with the
Reporting Policy;
• the Product Key Performance Indicators for WLR3 Analogue
Provision, WLR3 Analogue Repair, LLU SMPF Provision,
LLU SMPF Repair, Ethernet Access Direct Provision, IPstream
Connect Provision, IPStream Connect Repair and IPstream
Connect Migrations shown on pages 33 to 36 are properly
compiled from the underlying management information of the
Group; and
• nothing has come to our attention to indicate that the remainder
of the EAB Annual Report for the year ended 31 March 2011 is
inconsistent with the findings of our work.
PricewaterhouseCoopers LLP
Chartered Accountants
London
11 May 2011
40 EAB Annual Report 2011
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Glossary
21CN
BT’s 21st Century Network programme
Active remedies
Next Generation Access products with most of the network functionality offered by Openreach using electronics
Annex 2
Less stringent restrictions related to the Undertakings applied to BT employees
BES
Backhaul Extension Service, a legacy product in the Ethernet portfolio
BT CPs
BT Wholesale and BT’s two downstream businesses BT Global Services and BT Retail
Business stack
A collection of inter-related systems which allow BT’s business customers to be served equivalently
Consult 21
BT’s 21st Century Network programme consultation group
CoP
Code of Practice
CPs
Communications Providers
CPCs
Comparative Performance Charts
EAB
Equality of Access Board
EAD
Ethernet Access Direct, a point-to-point access product in the Ethernet portfolio offering high bandwidth connectivity, linking end user sites, CP
networks and BT exchanges
EAO
Equality of Access Office, the team which supports the EAB
EBD
Ethernet Backhaul Direct, which provides uncontended access from an access node to a handover point
EMP
Equivalence Management Platform, the strategic system underpinning the delivery of EoI products
EoI
Equivalence of Inputs, which means that BT provides the same product or service to all CPs on the same timescales, terms and conditions by means of the
FTTC
Fibre-to-the-Cabinet, an NGA technology that involves installing fibre to street cabinets and using the existing copper infrastructure into the home
FTTP
Fibre-to-the-Premises, an NGA technology that involves installing fibre into homes or premises as an overlay of the copper local loop
same systems and processes
GEA
Generic Ethernet Access, a product enabling broadband connections over Next Generation Access
IBMC
Installed Base Migration Complete, which is the date by which the migration of all of the relevant BT installed customer base to the EoI product or
IPstream Connect
Product supplied by BT Wholesale to enable BT CPs and non-BT CPs to offer broadband services to end users
ISDN/ ISDN2/ISDN30
Integrated Services Digital Network a technology allowing voice, internet and video to be delivered via the same dedicated line
KPI
Key performance indicator
LLU
Local Loop Unbundling, a product which enables non-BT CPs to lease the local loop infrastructure from Openreach to offer
platform is completed
telephony and broadband services to end users
MIS
Management Information Systems
MPF
Metallic Path Facility, a circuit comprising a pair of twisted metal wires between an end-user’s premises and a main distribution frame
NGA
Next Generation Access
NGN
Next Generation Network
Non-BT CPs
Communications Providers external to BT
OSS
Operational Support Systems
OTA2
Office of the Telecommunications Adjudicator
Passive remedies
Products that allow greater access to the underlying infrastructure on BT’s Next Generation Access network with no use of electronics/power
PIA
Physical Infrastructure Access, a way of giving CPs access to Openreach’s poles and ducts
PwC
PricewaterhouseCoopers LLP
RFS
Ready for Service, which is the date by which an EoI product or service is available for use by other CPs for their new end-users
SLA
Service Level Agreement
SLU
Sub-loop Unbundling, which involves unbundling the copper from the end-users’ premises to the street cabinet (rather than all the way to
the exchange)
Glossary 41
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Significant Market Power
SMPF
Shared Metallic Path Facility, access to the non-voiceband frequencies of the Metallic Path Facility
SoR
Statement of Requirements, the process by which CPs submit their product requirements to BT
VoNGA
Voice over Next Generation Access, a voice solution that Openreach planned to launch but cancelled following consultation with CPs
VULA
Virtual Unbundled Local Access which will allow competitors to deliver services over BT’s NGA network with a degree of control similar to that achieved
when taking over the physical line to the customer
Wavestream National
Wideband fibre-based high capacity service between sites up to 70km apart
WEES
Wholesale End-to-End Service, a legacy product line in the Ethernet portfolio
WES
Wholesale Extension Service, a legacy product in the Ethernet portfolio
Wires-only
Potential future product which would enable CPs to terminate fibre networks in customers’ homes
WLR
Wholesale Line Rental, a product supplied by Openreach which is used by CPs to offer their own-branded telephony and narrowband services
to customers
WLR3
42 EAB Annual Report 2011
An EoI version of Wholesale Line Rental
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Produced by BT Group.
Printed by RR Donnelley.
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BT Group PLC
Registered Office: 81 Newgate Street, London EC1A 7AJ
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Annual Report 2011
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