The Jersey Competition Regulatory Authority (JCRA) has published a consultation document as part of its review of business connectivity services in the Island, which consists primarily of leased lines. The proposals within the document are designed to promote competition, availability, choice, price, quality, resilience and value-for-money for business consumers.
Leased lines play an important role in business communications and are used to support a wide variety of applications in both the public and private sectors. They are dedicated private circuits that provide a high level of network privacy, security and resilience to crucial areas of the economy including finance, health, communications (in particular mobile backhaul) and government.
Data shows that there were 1,005 leased lines in use in Jersey in 2019, worth £11.8m in annual revenue. JT is the largest provider of leased line services through its Island-wide fibre network, which it also sells wholesale to other telecommunication companies who want to retail the product to their customers.
The last Business Connectivity Market Review (BMCR) was conducted in 2014 and the JCRA believes it is appropriate to conduct a new study, given developments in markets and changes in technology since then. A call for information was published last year, and the JCRA also conducted interviews with businesses using leased line services to reach its initial assessment and proposals, which are designed to promote competition, availability, choice, price, quality, resilience and value-for-money for business consumers.
At the same time the JCRA acknowledges the investment by JT in the Island-wide fibre network and is therefore proposing a fair and proportionate remedy to balance JT’s significant market power (SMP) with its need to achieve a return on its investment.
One of the most significant proposals is to open up access to so-called ‘dark fibre’, which is cabling that has been installed but is not currently being used or fibre that can be re-used by other licensed operators by installing their own technical solutions at either end of fibre connections. The recommendation is based on the JCRA’s forward-looking approach, which has not only analysed the current market but what the future demand is likely to be, potentially avoiding the need for regulatory intervention in the market at a later date. The proposals outlined in the consultation document, which is published today, are consistent with the JCRA’s legal duties, with Government of Jersey telecoms policy, and important in furthering the interests of consumers.
Tim Ringsdore, CEO of the Jersey Competition Regulatory Authority said, “This review is both appropriate and necessary. Economically and reputationally, Jersey relies on competitive and resilient business connectivity. Leased line services in Jersey are more expensive than other small jurisdictions, and significantly more so than similar services in the UK. There is a risk that JT could abuse its position of significant market power and while we are not suggesting the company would do that, it is our role to mitigate that risk. There are significant benefits from requiring JT to provide dark fibre access to other telcos, but also risks that JT would not be able to recover the cost of its investment in its network. Our proposals take this into account by suggesting an appropriately calibrated price control mechanism.
“A more competitive retail market, through the introduction of dark fibre, is likely to lead to innovation of products and rebalancing of prices. The document we have published today is the next step in a process we follow, that is consistent with international best practice. I would like to thank everyone who has co-operated with and contributed to that process so far and look forward to receiving views on these proposals.”
The proposals will be published on the JCRA’s website. An independent report by SPC Network, has been published alongside the consultation that provides more detail on dark fibre, including technical considerations, international precedent and potential remedy design.
The deadline for responses is January 2021 with the consultation process being completed by next winter.
