If Ofcom don't split them up...
...then I'll be wondering who's got who's hands in who's pockets; because IMHO then damn well need to be split apart.
Sorry. Do I sound a little pissed off?
Former state-owned monopoly BT is calling for tough rules to force US telecoms companies to let rivals – such as, err, BT – have access their networks. The move would emulate the reverse situation in Blighty, where UK rivals are allowed to use BT's broadband network through Openreach. However, regulators are considering …
an independent openreach would be slower and cost more. its better at the moment where everyone can blame BT and let OpenReach get on with it. If its on its own, all the ISP's will be tugging it in different directions, & still BT would be accused as it is, & will be for a long time, openreaches biggest customer. If OpenReach goes, VM's net should go to, at least we could then get our favourite ISP over the fastest connection whether that be DOCSIS or XDSL.
as i've written before, BT currently has an interest in keeping OpenReaches (Line Rental) charges down, ISP's will have an interest in upping openreaches charges so they get more margin on the passed through costs, possibly by sticking in unnecessary gear and charging their peers for transiting it.
Line rental is the charge for maintaining and improving the lines across the nation and levied on all PSTN based connections.
"as i've written before, BT currently has an interest in keeping OpenReaches (Line Rental) charges down, ISP's will have an interest in upping openreaches charges so they get more margin on the passed through costs, possibly by sticking in unnecessary gear and charging their peers for transiting it."
No - BT have been inflating Openreach charges wherever possible (since that allows them to milk their "competitors") including inventing truly absurd charges, like the three or occasionally even four figure charge for reporting complex faults, "SFI". (By shifting goalposts, they now impose a charge if the first engineer fails to find a fault, even when the second engineer finds and fixes it then admits the first guy should have if he'd done the job properly.)
As for unreasonable charges, get back to me when I can dial a UK number starting 07 from anything other than another 07 number without getting gouged to bankruptcy for it! (Yes, to be fair, BT and Three are both campaigning against that particular scam now, but it's been in place a very long time now.)
It was only last year I had an "Openreach" engineer in my home telling me my fault would be fixed more quickly if I used BT as my ISP rather than one of their rivals!
Does your ISP blame BT for every problem you have? If your ISP is BT they will blame open reach and then crack on with resolving the issue. They all have issues, just one less layer of blame if your isp is bt.
Over the years working with Verizon, L3, pipex, cw, Vodafone, Ntl etc, it's always been easier getting a strait story from bt rather than the garbled regurgitated crap from the others hours after they've received their updates from open reach.
As you mention the cost of dialing a mobile number is something bt are wanting to address with ofcom.
"an independent openreach would be slower and cost more."
"The New Zealand experience would show otherwise."
How so? Broadband in NZ is slower than in the UK and the cost per connection - including the government subsidy - is much, much higher. There's far less choice of ISPs than there is in the UK.
become the telecoms equivalent of Network Rail sounds like a grand plan to me
Evidently you don't remember what an execrable mess the railways were under state ownership. And not just in their last few years, but throughout the dismal history of British Railways, and under governments of all political persuasions.
But vote for Jezza Corbyn next time round, and you'll have your wish, as the UK is magically transformed into a workers' paradise.
Evidently you don't remember what an execrable mess the railways were under state ownership.
I think you missed the sarcasm. Railtrack/Network Rail is an omnishambles whichever way you look at it.
Anyway, let's not forget why the railways were nationalised in the first place (they were bankrupt) and that the privatised rail companies have trousered more in subsidies than British Rail did.
FWIW I'm not a fan of Corbyn at all but I don't think that has anything to do with this.
One of the major reasons for the nationalisation was WW2. During the war the big 4 (Southern, GWR, LMS amd LNER) were virtually natonalised as part of the war effort.
After the end of the war they were in a terrible state and frankly in no financial state to get themselves back into a profitable state again.
Add to that the Post War Labor Government and you have the perfect storm. Clause 4 was in full swing and the mines, railways, docks etc all fell under the State Ownership Umbrella.
Having grown up when BR was still Steam Trains and only a few Diesels and Dr Beeching had not done his hatchet job (some of it was well overdue but in some areas he went far too far) I can say that the railways now are a far better place than back then.
I would suggest that the reason the nationalised east coast line only made money because they made no investment in loco's or rolling stock while it was nationalised. personal experience was that all of the rolling stock was in a very run down state and I lost count of the number of times the train I was meant to be on was cancelled because it had broken down
"I would suggest that the reason the nationalised east coast line only made money because they made no investment in loco's or rolling stock while it was nationalised."
The model used in the UK doesn't allow the franchises to own trains. The trains are owned by rolling stock companies (roscos) who lease the trains to the operators. East Coast couldn't have bought trains even if it wanted to.
"Evidently you don't remember what an execrable mess the railways were under state ownership. "
That has a lot to do with them having been an execrable mess before they were nationalised and management of those private companies continuing to be regionalised management of BR, complete with the rivalries being perpetuated.
There was so much infighting within BR that it's a wonder anything happened at all. It and British Leyland are not good examples of how to amalgamate things.
I find it hilarious they are accusing Sky of having a monopoly on TV when it is clear that BT is trying to become the TV monopoly. Look at the amount they paid for the football rights, now cricket, Sky has lost loads to BT, but they still complain because they want every single piece of the TV market so people have to use BT.
Splitting OpenReach will mean the end of broadband improvements in the UK... forever, and no new houses will ever be connected to the broadband network. They would have NO incentive to invest and would be run in to the ground with endless cuts as the ISPs demand an ever-cheaper service.
I think the general argument is that infrastructure should be nationalised or communalised. There are examples of how this can work in Scandinavia.
This would decouple something like Openreach from being required to invest a lot of money now and having to earn a large profit every quarter. This can indeed work: pension funds might even be happy to finance it but at the same time you have to accept inevitable degree of political control it entails. You also need to balance social and political aims with (broadband to everyone, including those in the countryside) with the role of competition in spurring innovation: how do you get cost-effective solutions when FTTH either isn't technically possible or hideously expensive.
The UK's problem seems to me is that it has kept the monopoly going too long. Unbundling seems to have been both more effective in other countries in reducing prices and in encouraging investment in infrastructure.
Openreach decided that they weren't going to add FTTC to my old houses cabinet, as it they could then claim it an improvement under the rural program for my county. They basically used that money to infill where it wasn't economically viable due to their poor planning in setting out cabinets, rather than the intended purpose for rural improvements. And the new place we moved to? VM had already cabled, so BT decided not to bother.
In the EU regulators manage open access tariffs. Anyone can set up a telco and can buy wholesale components that they need - usually last mile and metro access - at a published regulated rate that applies to all players.
In the US, there's no such thing. Landlords sign exclusive access agreements with a single telco and a new entrant to the market might be told to sod off, or that the cost for building 'X' is $2M per annum. The new entrant can't ask an alternative provider to get into the customer site because of the exclusivity agreement.
I think BT and the other EU based global players (DTAG, France Telecom / Orange, Telefonica to some extent) are asking for the same access to the US market that US telcos get to European markets.
BT used to be a monopoly and it was hard for others to gain access because of what they had to do to build infrastructure to compete with that monopoly. Now they're not the biggest telco in the UK but they still control the fixed line infrastructure. Even that isn't strictly a monopoly in many places because VM offer phone service and decent speed broadband to compete, and by all accounts do so fairly well.
The US is similar to how it was in the UK in many places, there's a single incumbent supplier and you're stuck with their offering. Capitalism breaks down if you've got a monopoly supplier and a high barrier to entry, not least because the monopoly can always undercut new entrants who need to recoup their start-up costs. So if you want competition you have to help it with a bit of regulation. If you've got the newcomers complaining that it's not tough enough, and the incumbent complaining that it's too harsh, then you've probably pitched it about right :-)
Look - what is BT?
In terms of global enterprises it is a splat, splot, spot, UK dependent thingy.
Invoke a principle of reciprocity and watch BT subsequently squirm, squash, die as Ruski, Merican, Canadian, ... telecoms come in and compete on even levels?
Dear BT: some swords are two edged, watch which ones you dare and/or care to use?
"In terms of global enterprises it is a splat, splot, spot, UK dependent thingy."
I think 50% of BT revenue is non-UK. One of a handful of telcos who can reliably and consistently deliver globally.
Virgin reach most UK homes and they're US owned - so I think the sword you mention is already here.
BT Global Services is about 40% of BT Revenue and less than half of GS revenue is earned outside the UK. BT effectively makes no EBITDA outside the UK, as the GS EBITDA number is the same as the contribution from GS UK (albeit with some entities contributing positively, and others negatively). They may be able to deliver, but with no return, how long will the shareholders tolerate this?
BT's business outside the UK is smaller than the business of both AT&T and Verizon outside the US. Overall, of course, BT is tiny compared to either of them. The capex required to build a global network is astonishing - you need enormous cash flow. BT will never succeed without an ability to create bigger cash flow at home.
BT's complaint is based on an untruth. In the US, both AT&T and Verizon have to procure "last mile" access from each other, just as BT do. There are other providers. The market is competitive. As BT have failed to invest in the US (unlike Verizon and AT&T in the UK), BT is obliged to buy "value-added" services - not just last mile. These services are priced accordingly as these are the retail services the US carriers have invested in for their own customers. This failure to invest is BT's decision, and they are wrong to blame others.
Finally, within BT GS UK, contracts are often written at negative EBITDA because it is "good for the firm" as, ultimately, Openreach will benefit. Ofcom need to act and a split seems the most logical approach.
"Virgin reach most UK homes"
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Try 50%, which isn't "most" in my book.
Not going to happen and looking at history, BT seems more jealous of the American setup than anything else. A pox on them all... as an American, I find the US telcos appalling. The only reason to emulate them is profit... oh... wait...
"Yeah now imagine how insufferable life would be if the US hadn't broken up the AT&T monopoly."
A Monopoly which has almost completely reassembled itself (those 2 companies are AT&T reborn and the only reason they don't merge is to avoid anti-trust laws), no longer has to provide customer premises equipment and no longer has the pesky "universal service to all" obligations imposed by a 1935 antitrust settlement.
Don't forget that in many/most states, outsiders _can't_ compete, as they have legislated monopolies - granted in exchange for promises of massive infrastructure reinvestment which got cancelled almost as soon as the monoplies were granted.
Once upon a time, well probably about 1999, BT and AT&T (that's the old proper one, not the new at&t) did actually form an alliance. The plan was that they wouldn't step on each other's toes in the other's home market, and they would share stuff:
The fount of all knowledge has some info: https://en.wikipedia.org/wiki/Concert_Communications_Services
At the time I worked for AT&T Communications (UK) Ltd, which was a proper UK-based telco. Of course no-one had even warned us of this tie-up, so in one foul swoop of a press conference/release we all realised our days were numbered. I left soon after and what was left was flogged off to Viatel and/or Global Crossing I recall.
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