Some commentators have argued that Openreach needs a shake-up regardless. Customer satisfaction is low and there have been long delays launching faster broadband in the UK. Only around 10pc of the UK has access to full-fibre despite years of promises.
Matthew Howett, the principal analyst at Assembly Research, pointed to a similar approach in Australia which has caused delays for customers.
“Only one other country in the world has come close to going down this route, and for a good reason – it’s hard, expensive and fraught with difficulty,” he said. “Australia’s NNB is years late, massively over budget and offering speeds and technology a fraction of the original political intention.”
Labour’s free broadband pledge: How would it work?
Blunder Down Under Shows U.K. How Not to Nationalize Broadband
City reacts with shock to Labour's plans to part-nationalise BT
Matthew Howett, principal analyst at Assembly Research, said: “Only one other country in the world has gone down this route, and for a good reason. It’s hard, expensive and fraught with difficulty. Australia’s NBN is years late, massively over budget and offering speeds and technology a fraction of the original political aim.”
U.K. Labour Plans to Nationalize BT’s Broadband Unit
As policymakers and regulators have been creating conditions to spur more competition with BT, rivals including Liberty Global Plc’s Virgin Media and Goldman Sachs Group Inc.-backed CityFibre have been jumping in to commit billions of pounds to infrastructure plans.
“Those plans risk being shelved overnight,” Matthew Howett, an analyst at Assembly, said in an email. “This is a spectacularly bad take by the Labour Party.”
Analysts are skeptical the government could roll out fiber more effectively than private industry and Howett pointed to delays and budget overruns from a state-led effort in Australia.
Huawei battles Trump administration in US courts
5G and health concerns
US delays Huawei trade ban for another 90 days
Boris Johnsons's broadband pledge
O2 4G data network restored after day-long outage
Openreach to cut price of fast broadband
Matthew Howett, founder of research firm Assembly, said the announcement made "commercial sense" because Openreach and others looking to upgrade the UK's infrastructure needed to prove that the demand is out there.
"This does seem like a genuine move to get more people onto the fibre network, and stave off criticism from those that say the UK falls behind," he said.
"It's about Openreach showing the industry and the regulator that it has changed and is implementing the further separation from BT not only to the letter, but also in the spirit of what was agreed."
Virgin Media / UKTV channel dispute
Will EC's Android ruling help or hinder the mobile industry?
“The EC’s fine is quite a slap ... but neither this, nor the remedies Google are being required to put in place are likely to structurally alter the market, suggests Luca Schiavoni, a senior analyst with Assembly Research.
“[It] fails to set out structural remedies for a market which almost inevitably tends towards concentration, and therefore is difficult to break up without significant disruptions. End users value interoperability, and so do application developers, which means the case for more competition in the space of operating systems is not so clear.
“Similarly, search engines are successful because of their algorithm and of the large data pools they can rely on, which creates a spiralling network effect driving users towards the largest providers almost naturally.
“While regulators figure out how to best approach all these issues, fines help the public coffers – but do not solve any market problem."
Ten gigabit home broadband tested in UK
Matthew Howett, principal analyst at Assembly said: "After years of debate about Britain being on a 'low-fibre diet', in a relatively short period of time we've seen commitments from investors including Openreach, Vodafone, CityFibre and TalkTalk to up the amount of fibre in the network.
"While this announcement is not a new investment, it goes to show the potential full-fibre technology has and what is possible once the fibre has been laid. Of course the challenge now is to convince consumers of the need for these vastly higher speeds today and crucially to get them to part with the cash and pay a higher monthly bill."
TalkTalk Q3 results & full fibre announcement
Alphabet, Apple, Amazon, Alibaba results
Sky/Fox merger – CMA provisional findings
Facebook, Google and Twitter testify in Congress over extremist content on their platforms
5G rollout legal challenges defeated
One industry watcher said the regulator would be mindful that it had lost a separate appeal involving BT last month, external.
"Three have nothing to lose by going for the challenge, which would delay the auction," commented Matthew Howett from the consultancy Assembly Research.
"But I don't think that will delay 5G services for consumers. 5G as a standard hasn't even been defined yet. Yes, there's a lot of hype, but it's primarily from the handset-makers rather than the operator community. Realistically, credible 5G services won't be ready until about 2021."
Broadband overt 'wet string' tested for fun
Matthew Howett, principal analyst at research firm Assembly said: "While we often get tied up in knots over whether it should be fibre to the street cabinet or fibre all the way to the home, one thing's for certain and that's that this isn't going to make it into the mix of technologies companies like Openreach or Virgin Media will be using."