Original article ISPreview UK:
The co-Founder & Chair of UK broadband ISP Fibrus, Conal Henry, has criticised network operator Openreach (BT Group) for the “pole tax” they claim is being levelled against them, which is said to be “twice the cost of paying our own staff, just to rent some poles and holes built by the British taxpayer“.
Just for some context. Openreach is required to provide access to their existing cable ducts and poles via the regulated Physical Infrastructure Access (PIA) product, which has been extremely successful. This enables rival networks (Altnets) to run their own fibre optic cables via the incumbent’s existing infrastructure – cutting down on build costs, disruption and speeding up rollouts of gigabit-capable full fibre (FTTP) broadband ISP networks.
NOTE: Fibrus is backed by a total investment of around £893m, including £320m of committed debt, £200m in current and committed equity funding and £373m of government funding (e.g. £23m FFNI, £200m
Project Stratum – up to 82,000 premises by June 2025 in N.Ireland – and the c.£150m Project Gigabit contract for 53,500 premises in Cumbria –
Hyperfast GB).
Fibrus, much like many other network operators, have been harnessing PIA to support their roll-out across rural parts of both Northern Ireland and Cumbria in England. The operator’s network currently reaches over 400,000 premises and has connected 100,000 customers.
Openreach has described their PIA product as being “cheap as chips“, “really successful” (175 network builders are using their ducts and poles) and said it returns “very strong customer satisfaction scores“. But in a recent LinkedIn post, Fibrus’ Conal Henry appeared to strongly disagree with that viewpoint. The same issue is also touched on in a new BBC Look North episode, although at the time of writing this wasn’t available to view online.
Conal Henry said:
“BT Group’s “cheap as chips” pole tax on Fibrus is twice the cost of paying our own staff, just to rent some poles and holes built by the British taxpayer. Ofcom have allowed them to levy us with a charge which they don’t put on Openreach and which also includes the cost of the copper phone network we don’t use. These costs are 20 times higher for rural customers than for urban. Funnily enough, fibre penetration in rural areas is half what it is in cities.
Fibrus is calling on Ofcom and Department for Science, Innovation and Technology to deal with this unfair and illogical barrier to rural broadband now before it’s too late. If you agree, contact your elected representatives and tell them so and, whatever you do, don’t get your broadband from a phone company!”
The timing of Conal’s remarks are intended to help feed into the Ofcom’s current Telecoms Access Review 2026 (TAR), which will also be taking another look at PIA, although it currently seems unlikely to push for any truly radical changes. Similarly, other altnets have previously also called on the regulator to deliver fairness in pricing, to “ensure all users of PIA have a level playing field for access to infrastructure“ (here and here).
Conal’s concerns appear to be primarily centred around how altnets, “unlike Openreach“, must pay per-metre rental fees to access the same overground poles and underground ducts needed to install full-fibre broadband. “With rural properties spaced much further apart – typically 200m compared to just 10m in cities – the cost burden is significantly higher for rural expansion,” said Fibrus in a briefing document seen by ISPreview.
The fact that rural builds cost significantly more than urban ones is nothing new and it’s worth bearing in mind that Openreach will also suffer that impact when they build the infrastructure. But state-aid based deployments (e.g. Project Gigabit) can help to mitigate against those costs and naturally Openreach itself doesn’t need to pay the same rents, although they do have maintenance, repairs and other upkeep costs to consider. Fibrus also benefits from public funding in many of their rural builds.
The prices are ultimately set by Ofcom, not Openreach, and they’re supposed to be purposely set at a level which supports entry into the market by companies like Fibrus.
An Openreach spokesperson told ISPreview:
“This is a really successful product. It’s cheap as chips, achieves very strong customer satisfaction scores and, because of that, it’s been flying off the shelf.
175 network builders are using our ducts and poles to cut their network build costs by around half, according to Ofcom. That has encouraged intense competition across the market and helped more than 1.4m extra homes and businesses to be connected with Full Fibre. Also, crucially in rural areas, it’s avoided more than three million new poles being erected.
If anything, the prices are too low, given Altnets currently use around 20% of our duct and pole network yet only pay 4% towards its costs.”
In terms of that closing remark above, Openreach appears to be referencing how they previously reported duct and pole costs of £850m in FY24, although network builders only contributed £33m towards that (it’s unclear if that £850m figure includes costs from areas where no altnets are present/harnessing PIA). Rival networks also don’t pay upfront for network adjustments, and systems development costs aren’t included in their PIA prices.
As it stands, around 33% of Openreach’s duct and pole network is now either being used by rival networks or they’ve indicated plans to use it, which does help to show its popularity. On the flip side, Openreach argues that their rivals are often very reluctant to share their own infrastructure in the same way. But this is hardly surprising for smaller altnets, which carry a lot of risk and need to protect the value of their asset vs those with significant market power.
On the other hand, where altnets receive public investment to expand, then the rules often do oblige them to offer a degree of infrastructure access to rivals too. The catch there is that such unregulated products from altnets are often significantly more expensive than similar solutions via Openreach’s PIA (i.e. the terms involved often seem to be designed to discourage infrastructure sharing).
However, INCA’s Infrastructure Sharing Group (ISG) is separately working to produce a new sharing framework for alternative networks (here), which might help to solve some of the above issues. But this is more of an altnets-only kind of club and focuses on areas when Openreach’s own PIA solution is not available.
Otherwise, it seems like Ofcom will have the incredibly difficult job of trying to balance the many competing (vested) interests between different operators, and inevitably this will always result in some winners and losers.
