back to article Ofcom must tackle 'monopolistic' provider BT, says shadow digital minister Chi Onwurah

Shadow digital economy minister and former Ofcom head Chi Onwurah has called on the communications regulator to tackle BT’s hold on the broadband market, ahead of its major sector review next week. Speaking to The Register, Onwurah said it is imperative that the once-in-a-decade review addresses the nationwide lack of …

  1. Tromos
    FAIL

    And we should listen to her because she did such a fantastic job while in charge of Ofcom.

    1. Vimes

      This is the same party that when in government seemed to prefer to support BT in their efforts at illegal mass interception of communications (you need look only as far as emails released under FoI or the efforts they went to in order to defend 'implied consent' when challenged by the EU commission for evidence of this).

      If you're unlucky enough to be a journalist you get arrested for those sorts of allegations. If you're a large multinational state supported corporation then all that seems to happen is that some police officer gets wined and dined by those accused and the case gets closed without the accused ever being formally interviewed.

      https://nodpi.org/forum/index.php/topic,4785.msg46058.html#msg46058

      And now we're really supposed to believe that they want to 'tackle' BT when they spent all that time supporting them in the past? Seriously?

  2. Anonymous Coward
    Anonymous Coward

    Openreach needs to be split from BT as the latter is using the former to subsidise it's TV and sport plans to the detriment of everyone else. The money being sucked out of Openreach could be ploughed back in to providing better download speeds, better fault repair and better backhaul to improve latency and congestion. No good throwing all this bandwidth intensive content if the network is an ancient crock of shit that is collapsing under the strain of data packets.

    1. Anonymous Coward
      Anonymous Coward

      Openreach needs to be split from BT as the latter is using the former to subsidise it's TV and sport plans to the detriment of everyone else

      We don't know that, even though most of us suspect that. That's why strong regulation of Openreach could be a suitable answer. If BT shareholders want to own a content aggregator and a utility, that's fine by me. But the two businesses need to operate as separate legal entities and at arms length. Any "cheap debt" advantage of a regulated Openreach needs to be firewalled from BT's other businesses. And the regulatory risk of a potentially capricious, interventionist and incompetent regulator (a big shout out to OFEGM in this respect) would be kept away from the non-regulated operations.

      Given that BT's only position is that the status quo is the best and only answer tells us only one thing: That the answer is almost anything but.

  3. Anonymous Coward
    Anonymous Coward

    Is the issue Openreach

    or the "others" e.g. Virgin media, no bothering to invest?

    As far as I can see BT are the ones rolling out new fibre across the entire country, where as Virgin as doing errr, a lot of whining?

    1. hplasm
      FAIL

      Re: Is the issue Openreach

      BT have been paid a shitload of public cash to do what they are reluctant to. VM etc are still in debt for their fibre rollouts.

      1. zaax

        Re: Is the issue Openreach

        VM keeps being brought on the never-never, which why it is in debit.

      2. AndrueC Silver badge
        Thumb Up

        Re: Is the issue Openreach

        BT have been paid a shitload of public cash to do what they are reluctant to.

        True but most (possibly all) of the councils were offered a choice. They chose BT presumably because the other offers weren't as good. As it happens take up has been so high that in a lot of cases claw back clauses are coming into effect and projects are being extended.

        VM etc are still in debt for their fibre rollouts.

        Indeed. A salutary warning to everyone contemplating major network roll-outs.

      3. Anonymous Coward
        Headmaster

        Re: Is the issue Openreach

        BT bid for that cash, along with other companies. In the end all but BT withdrew from the process. Fujitsu being the last one to withdraw, not Virgin, not Sky, not TalkTalk. They were all unwilling to use a share of the pot.

      4. Roland6 Silver badge

        Re: Is the issue Openreach

        VM etc are still in debt for their fibre rollouts.

        Do keep up. VM cleared all of it's accumulated fibre rollout and acquistion debts and became profitable the year Richard Branston sold his stake in the company to Liberty Global in 2013.

    2. Dr. Mouse

      Re: Is the issue Openreach

      Part of the problem is that BT/Openreach are using their monopoly to kill competition.

      There have been various innovative projects to bring good broadband to areas neglected by Openreach. What tends to happen is that, as soon as it is up and running, Openreach change their minds, deploy FTTC in the area, undercut them, and drive them out of business.

      I had ideas of building out a broadband provider in a small area. Openreach had said they didn't plan to roll out there for several years. I'm glad I didn't: A few months later they started their roll out and my own business would have been dead in the water.

      So competition in this market is nearly impossible. Openreach have an effective monopoly in most areas, and can easily undercut any startup. I don't know what the cure would be, but something should be done to "rebalance the market".

    3. Alan Brown Silver badge

      Re: Is the issue Openreach

      "or the "others" e.g. Virgin media, no bothering to invest?"

      When you have a rapacious monopoly which can (and does) react to competition in the marketplace (ie, people running their own cables or setting up RF links) by lowering circuit prices to below those of the new competition, 3rd parties don't see much point in investing.

      Look to what happened in New Zealand when they forced the split of Telecom NZ(Spark) and its lines company (Chorus) - it's worth noting that it's the former incumbent dialtone company which is looking sick now, despite screaming from the rooftops that a split would be the death knell of the lines company.

      1. Anonymous Coward
        Anonymous Coward

        Re: Is the issue Openreach

        "lowering circuit prices..."

        Openreach's pricing is regulated. They don't get to set their own prices.

        1. Anonymous Coward
          Anonymous Coward

          Re: Is the issue Openreach

          Openreach's pricing is regulated. They don't get to set their own prices.

          Maybe not. But as Openreach is not a separate legal entity, and the bunglers at OFCOM have to rely on management accounts, that's hardly much of a challenge, is it? I've worked extensively in regulated businesses and with (indeed even within) their finance teams. Management accounts have no veracity whatsoever, they tell you purely what management wish to be seen. I've seen at first hand multi-million pound regulatory fraud through management accounts in action.

          If you think that Openreach prices are openly and fairly regulated, then that's because you don't know enough about the matter.

          1. Anonymous Coward
            Anonymous Coward

            Re: Is the issue Openreach @Ledswinger

            " But as Openreach is not a separate legal entity, and the bunglers at OFCOM have to rely on management accounts, that's hardly much of a challenge, is it?"

            Indeed - but it can't work both ways.

            Normally a regulated business would attempt to inflate its costs to be allowed to set a higher price. In this case the OP claims that Openreach is undercutting new entrants. The other telcos complain Openreach is pricing too high and reducing their profits while favouring BT Group.

            Both can't be true at the same time for the same products sold under the same pricing regime.

            1. Dr. Mouse

              Re: Is the issue Openreach @Ledswinger

              Openreach can undercut new entrants due to economies of scale, a massive existing infrastructure, and favourable terms with government (e.g. business rates on fibre).

              If a new entrant wanted to provide internet access to a small area, they have large setup costs. Their product will probably be more expensive than BTs, especially as BT can use profitable areas to subsidise unprofitable ones.

              However, BT won't roll out to all unprofitable areas. There are not-spots. These are the best areas for a new entrant to wire up. However, as soon as the new entrant is up and running, BT suddenly decide they do want to roll out there, so undercut the new entrant and wipe them out. This is abuse of their effective monopoly to keep new players out of the sector.

              * I've used BT, when many times it was probably Openreach, but it makes no difference for the point I am making so I can't be bothered correcting it now...

              1. Anonymous Coward
                Anonymous Coward

                @Dr Mouse

                I'm really intrigued by this issue and how it might be resolved.

                Any action by Ofcom / CMA to make Openreach better/faster/cheaper harms your position. For new entrants like Gigaclear or Hyperoptic to flourish the last thing they need is Openreach in public ownership or handed a USO mandating rural broadband to anyone who wants it.

                The problem that Sky and TalkTalk and so on complain about is the exact opposite of your problem. They want Openreach to reduce prices and roll out to more places so that they can make more profit by having lower costs and a larger potential customer base. You want them to, in effect, butt out and keep their prices high so that you can have a chance to get established.

                If Openreach did a gentleman's agreement with you and promised to not step on your toes for 3 years, that's a non-compete or Cartel arrangement and you'd both be going to prison. The opposite behaviour, where they compete vigorously with you (which is expected free-functioning market behaviour) feels like being stamped on by a monopoly.

                Maybe the answer is some kind of regulatory adjustment? If you decide to launch in, say, Fulking in Sussex, BT (and Virgin?) are prevented from doing FTTx for a set period - say 3 years? After those 3 years a decision could be taken. BT could decide to roll out FTTx in direct competition, they could decide you've got the market sewn up and choose not to, or you could choose to sell all or some of your business to BT. If you're struggling to cover the cost of your loans or the locals are angry at your higher than BT prices, or you're experiencing both of those things simultaneously you might welcome that. Heck, you could even have a regulation that requires BT to buy it if you want to sell. Maybe in exchange for all that you have to agree to build it to a certain standard so that it could be transferred and maintained?

                That would remove your set up risk, it would provide a firmer footing for financing your business, but it doesn't punish you if you succeed.

                Anyone got Ofcom's number? I think I've cracked it!

    4. Doctor Syntax Silver badge

      Re: Is the issue Openreach

      "the "others" e.g. Virgin media, no bothering to invest?"

      All the cherries have been picked.

      1. Roland6 Silver badge

        Re: Is the issue Openreach

        All the "other" majors had sufficient clout with government to have influenced the structure of the BDUK project. I t was notable that they didn't and gave various excuses for their action, which basically said they didn't want to make an investment that was likely to take a few decades before it would return a profit...

  4. Doctor Syntax Silver badge

    'But we should have looked more at the investment path for super fast broadband and fibre to the home.'

    True. But then she'd have no excuse for magical thinking where all you need is a plan and not money: 'Digital connectivity must be a priority, with a proper plan to roll out networks, according to Onwurah. "I think we should be looking at fibre to the home, although that doesn’t seem to be BT’s view.”'

  5. Oh Matron!

    Clueless

    She's having' a right larf!

    She realises that South Korea has such good broadband because there's only one provider? SK? And that the Govt ensured that everyone got good internets because they bunged cash to SK?

    1. Tom 7 Silver badge

      Re: Clueless

      We have pretty much only one provider here outside cities and they too have been bunged cash.

      My local exchange took loads of money to be FTTC - and my cabinet moved several miles back to the exchange so I'm no better off and those near the exchange can now get 70Mb instead of the paltry 17Mb they got before

      1. AndrueC Silver badge
        Unhappy

        Re: Clueless

        my cabinet moved several miles back to the exchange

        That sounds unlikely. BT would not go to the expense of re-routing telephones from one cabinet to another. I think what's more likely is that you were on an EO (Exchange Only) line which meant you couldn't get FTTC at all (VDSL equipment is not currently allowed within exchange buildings). To resolve this BT had to install a new cabinet then move the EO lines over to it. Network topology meant that the best place for the cabinet was nearer the exchange where it could provide the most improvement to the most people.

        Another possibility is that yours was a a number of distant cabinets that were connected to a secondary cabinet closer to the exchange (a kind of mothercabinet/daughter cabinet arrangement). I can see the 'mother' cabinet being upgraded to help those directly connected to it but the daughter cabinets might not themselves be viable.

        It's a sucky situation either way but hope is on the horizon. BT are looking at something called G.FAST and that should improve the economics of small cabinets.

        1. Alan Brown Silver badge

          Re: Clueless

          G.Fast has nothing to do with the economics of small cabinets. The average G.Fast node is going to have to be up the pole (where lines are distributed aerially) or buried every 4-5 houses.

          Once you get to that level of complexity you may as well run fibre and use GPON. It'll be cheaper than the work needed for G.Fast.

          1. AndrueC Silver badge
            Happy

            Re: Clueless

            G.Fast has nothing to do with the economics of small cabinets.

            Well of course its primary reason is to push the DSLAM closer to the end user premises to boost speed, that should go without saying. But there are going to be something like ten times as many G.FAST nodes as cabinets. BT have to bring the cost of a G.FAST node down. That inevitably improves the economics of smaller installations.

            Exactly where the break-even point will be is anyone's guess. But I think it possible that a small cabinet that isn't viable for FTTC could be covered by four or five G.FAST nodes for less cost. Of course getting the fibre to the nodes still won't be cheap but it's an improvement.

            Whether or not BT actually choose to use this to extend the footprint of xDSL is another matter. But they may think that a village currently struggling on ADSL will give a higher takeup of G.FAST than a large cabinet in a town that already has FTTC.

    2. Alan Brown Silver badge

      Re: Clueless

      > And that the Govt ensured that everyone got good internets because they bunged cash to SK?

      With hooks that meant SK had to do what it was told or the gotv would take the cash back.

      The korean govt hasn't been shy about jailing company execs in the past either.

  6. Anonymous Coward
    Anonymous Coward

    Competition is great...

    Where is exists. The real problem is the outlying / rural areas where BT own all the infrastructure and they know no one else can afford to compete due to the high installation costs.

    I've no problem with BT owning and operating in these areas, but they need to be forced to either upgrade them at the same time as (or before) they roll out new technology to the area where they will make profit, or to provide free, unfettered access to the ducts and poles - especially as they have an effective monopoly after being "gifted" state-built infrastructure.

    1. ukgnome

      Re: Competition is great...

      I totally agree, but where is the value, sorry I mean profit?

      My sub-exchange caters for 500 homes. If they upgraded the kit when would they see a return on the investment. Likewise why would another provider ask for some rack space when they are unlikely to see a return in any time soon.

    2. Anonymous Coward
      Anonymous Coward

      Re: Competition is great...when the field is set out in advance

      And here is the great issue, having been given a state funded infrastructure, they don't want to invite the new kids round to play with "their" toys.

      Virgin etc still have to pay BT for the bits between the new installations and the existing structure, they don't run a new fibre from their Manchester hub to the latest housing project every time one is cabled up.

      BT are not breaking any real laws here (but not obeying the spirit either), but they do drag their feet along the line of "just enough to keep it legal" route when opening up new area's to "rivals" and not many have the funding to take on the goliath in the court arena as it would drag on for years and quickly bankrupt the newcomers

    3. Anonymous Coward
      Anonymous Coward

      Re: Competition is great...

      ", or to provide free, unfettered access to the ducts and poles - especially as they have an effective monopoly after being "gifted" state-built infrastructure."

      The government sold those assets to shareholders 30 years ago. They weren't given away, they were sold. Should Citroen be allowed to use BMW's Mini factory for free? Surely that was given away for free when Rover was privatized?

      I don't think there's a monopoly either, effective or otherwise, Virgin reach most UK homes with their network.

      1. strum

        Re: Competition is great...

        >The government sold those assets to shareholders 30 years ago.

        None of that money went to BT. Not a penny.

        1. Anonymous Coward
          Anonymous Coward

          Re: Competition is great...

          None of that money went to BT. Not a penny.

          As such, no. But there's a certain matter of certain billion quids worth of assets that were then gifted to the company, having been paid for by taxpayers and bill payers.

      2. John H Woods Silver badge

        Re: Competition is great...

        "Virgin reach most UK homes with their network." -- AC

        Well I think it's only just over half, so 'most' might be technically accurate but it's a bit misleading.

        1. Anonymous Coward
          Anonymous Coward

          Re: Competition is great...

          What other definition or understanding of most is there? It means more than half.

          1. 96percentchimp

            Re: Competition is great...

            If you're going to play the pendantry game...

            IMO 'most' people would consider 'most' to refer to a significant majority rather than a simple majority, something like >75% vs >50%. If you're in the region of 43-57%, then 'most' people would call that 'half'.

            There are, of course, contexts where this breaks down, such as winning an election, but I think they're exceptions to the general understanding of the term.

    4. Doctor Syntax Silver badge

      Re: Competition is great...

      "or to provide free, unfettered access to the ducts and poles"

      And the RoI for this will be exactly the same for the competitor as for BT. Or would they have some other advantage which would enable them to do better? Do they have a huge army of fibre layers chomping at the bit that are somehow unavailable to Openreach?

      It's partly material costs and partly man*-hours. Both cost money and the rate of supply of man-hours is governed by the number of available men. You could, of course, increase the supply of men but to do that you'd probably have to pull some of the workforce out of the field to act as trainers, then the trainees have to get up to speed.

      DAMMIT!!! It's 40 years - FORTY WHOLE YEARS - since Brookes published TMMM and we still have people who don't get it.

      *Where "man" signifies a human of any gender.

  7. Cynical Observer
    Facepalm

    Level Playing Field?

    Digital connectivity must be a priority, with a proper plan to roll out networks, according to Onwurah. "I think we should be looking at fibre to the home, although that doesn’t seem to be BT’s view.”

    As a former Ofcom bod, she is presumably aware of how much of the current network is actually fibre to the home and how much is copper. As she seems to think that the current network should be discarded and replaced wholesale, she will presumably call for Virgin and others to be compelled to cable up areas that are less populous than central London, Manchester, Glasgow etc.

    I'd quite like to have choices in the smaller villages

    Seems like another easy cheap shot - policy by sound-bite.

    1. Alan Brown Silver badge

      Re: Level Playing Field?

      "As she seems to think that the current network should be discarded and replaced wholesale, she will presumably call for Virgin and others to be compelled to cable up areas that are less populous than central London, Manchester, Glasgow etc."

      Look to what happened in New Zealand.

      As soon as the dead hand of the incumbent was removed from the lines company it was free to sell to anyone and promptly did so, including leasing duct space and dark fibre to the NZ-equivalent of Virgin.

      Once that happens, VM rollouts are trivial by comparison with tearing up streets.

      1. Anonymous Coward
        Anonymous Coward

        Re: Level Playing Field?

        "Look to what happened in New Zealand."

        Yes. The government had to hand the new last mile company £1000 for every home in the country and even then when the regulator tried to reduce pricing they threatened to default on their loans.

        Akamai's most recent State of the Internet report gives an average speed in New Zealand of 8.7Mbps versus 13Mbps in the UK.

        Have you got any examples where splitting up the former incumbent has resulted in things being better than in the UK?

    2. 96percentchimp

      Re: Level Playing Field?

      The issue in rural areas isn't with Virgin (an urban provider) but with small community initiatives or niche suppliers like Gigaclear, who often find that BT waits until they have proven a local demand for higher speeds, gone fundraising, and even begun their rollouts.

      Then BT jumps in and drops an FTTC service which isn't as fast and suffers poor contention ratios, but it's relatively cheap, it's available now, and has a range of competing ISPs like Sky and TalkTalk which can offer value-add services like TV or mobile. The smaller local operator can't compete and loses the critical mass of customers it needs to survive the startup phase.

      1. Roland6 Silver badge

        Re: Level Playing Field?

        Then BT jumps in and drops an FTTC service

        In my area they lightly 'peppered' the rural area with FTTC. It was enough to effectively inhibit or block niche suppliers from bidding for BDUK funding and also to massively increase their costs because effectively now they would in effect be bidding for single standalone cabinet deployments rather than entire villages and/or areas.

        Yes FTTC arrived in 2015, but without BDUK we would of probably had something with a similar or better performance up and running in 2009...

  8. Anonymous Coward
    Anonymous Coward

    Priorities

    BT's priorities are to keep shareholders happy and trundle along ignoring the expense of the REAL COMMUNICATION PRIORITIES for the country.

    We are all just cashcows for BT and shareholders.

    BT needs split up!

    1. Anonymous Coward
      Anonymous Coward

      Re: Priorities

      And those new businesses created by a split wouldn't have shareholders?

      1. Slacker@work

        Re: Priorities

        If the Openreach arm of the business was taken back into public ownership (i.e. a public service) then no, it won't have shareholders.

        I don't mind a monopoly as long as it delivers what it promises - the problem is that they are stripping out profit to give to the shareholders; not ploughing monies back into the national infrastructure in a way we would all like.

        1. Anonymous Coward
          Anonymous Coward

          Re: Priorities

          How would Virgin, Hyperoptic, Gigaclear and so on be able to compete with a not-for-profit, publically owned Openreach? BT's shareholders would be compensated for the full value of their holdings, and Virgin would go bust. There'd be quite a lot of court action between the first and last acts in that play.

        2. Alan Brown Silver badge

          Re: Priorities

          "If the Openreach arm of the business was taken back into public ownership"

          It doesn't need to be. As long as well-regulated to prevent monopoly abuse it will work - and because it's not selling dialtone, a line-only company has no incentive to treat any comers differently.

        3. Doctor Syntax Silver badge

          Re: Priorities

          "If the Openreach arm of the business was taken back into public ownership (i.e. a public service) then no, it won't have shareholders."

          And if the GPO days are anything to go by it wouldn't have much in the way of investment either. Why do you think BT was privatised? Big clue - HMGs of all hues had fought shy of putting money into it at anything like the required rate. Nationalised GPO was the black telephone rationing company.

  9. Zog_but_not_the_first
    Trollface

    All hail!

    The return of the GPO.

    Now where's my Trimphone?

    1. msknight

      Re: All hail!

      I have one on my desk at home. Can't see incoming numbers and the nice classic dial has been replaced by push buttons, but it chirrups like it used to and has that beautiful, Noel Edmunds Swap Shop style about it.

      If they at least upgraded the aged copper, that might be something to cheer about; optics aren't much good in a domestic power cut. Or forced more customer access to back end performance figures, like the load on our pods, etc. so that a customer stands a chance of knowing if they're being told porkie pies. And also Ofcom technicians to go in and check on equipment configuration.

      But sure, some of that public money should have gone to VM and others, in order to even out the playing field.

    2. Mike Shepherd
      Meh

      Re: All hail!

      Ah yes, the good old days! I still have the ripcord for starting the engine on my GPO fax machine.

    3. Starman
      Alert

      Re: All hail!

      The way fashion goes round in circles no doubt it'll be back before too long.

    4. Doctor Syntax Silver badge

      Re: All hail!

      "Now where's my Trimphone?"

      You can't have one. Get back into the queue and one day you can have a black telephone. Do you mind sharing a party line?

  10. Ru'
    Linux

    We need to get Buzby out of retirement; he'd know what to do to sort out this mess!

    1. Mike Shepherd
      Meh

      "We need to get Buzby out of retirement"

      Now, where did I put my shotgun...

  11. AndrueC Silver badge
    Meh

    She commented that BT's current focus on fibre to the cabinet "is probably a symptom of a lack of competition, because if other people were rolling out networks they might not be so complacent."

    Other people are rolling out networks. Sky are rolling out FTTP in York. Hyperoptic are rolling out FTTP in several cities. Even VM (the descendant of the companies expected to offer competition in the 90s) is finally extending its network with Project Lightning.

    Then there's the several Altnets (eg; Gigaclear) who working in the rural areas.

    But one of the biggest obstacles they all face is equivalence of access. Ofcom demands that all the big players (of which there is currently only one of course) open up their networks to other providers. That puts a big dent in the RoI for network expansion. It will be very interesting to see what happens with VM because they might soon reach the point where Ofcom will decide they need to offer a wholesale service to other CPs.

    'Build them and they will come' is a very hard sell. When you modify it to 'Build them and they will come then another company will take a chunk of the profits' it gets even harder. Equivalence of access is a good thing for the consumer as far as price and sometimes service is concerned. But for businesses that own the resources it's a bit of an arse.

    1. 96percentchimp

      I'll give you an upvote but I disagree that equivalence of access is an obstacle - it's a major disadvantage to altnets that they can't easily resell their capacity to the likes of Sky and TalkTalk, who will do their marketing by default and can offer value-add services like TV and mobile which will increase take-up.

      Sky and TalkTalk already operate as virtual ISPs within BT's FTTC provision (there's no network kit involved in the last mile, just billing arrangements), so it's not even an original idea. Ofcom could do altnets a great favour if it could develop a simple capacity exchange system, with regulation to prevent the larger brands abusing the altnets, while allowing the altnets to white label their broadband to recognised brands.

  12. Commswonk

    I don't _believe_ it

    I think we should be looking at fibre to the home, although that doesn’t seem to be BT’s view.”

    As former telecoms technology head at Ofcom...

    IMHO the only way the foregoing makes any sense would be for the "former telecoms technology head" to have no commercial sense whatsoever. The up - front costs of rolling out FTTH must be eye - watering, with no certainty of sufficient up take to recoup the costs over a sensible timescale.

    I am also at a loss to work out if BT + Openreach isn't providing the market with what it needs (note needs rather than wants) what evidence is there that separating the company into two parts will?

    On a purely technical point has anyone got any idea about how durable overhead spans of fibre are (or would be)? Copper - coated steel dropwires are good for many years even when blown about in strong winds, but I'm not sure that fibre dropwires could be installed in the same way; anyone know?

    1. Alan Brown Silver badge

      Re: I don't _believe_ it

      "The up - front costs of rolling out FTTH must be eye - watering, "

      Which is why BT has been given large grants to roll it out - which it promptly pissed against the wall in areas unrelated to the FTTH rollouts.

      This _was_ a perfect opportunity to force unbundling - by making the grants contingent on separation of the companies. That's how New Zealand did it.

    2. Alan Brown Silver badge

      Re: I don't _believe_ it

      "On a purely technical point has anyone got any idea about how durable overhead spans of fibre are (or would be)? "

      30 years ago I supervised the commissioning of a 15km pole-top-run to a comms station on a mountaintop in New Zealand (the kind where you have to helicopter in during winter because the snow is 20 feet deep and wait for safe weather in summer or risk being blown off a cliff whilst driving up). It's still operational, as is a 60 metre aerial FDDI span at current $orkplace that's been in place for more than 20 years.

      Armoured aerial fibre is probably more robust than the equivalent armoured aerial copper drop on any given span. I'm fully inclined to believe claims of 50+ years.

  13. SImon Hobson Silver badge

    > At an infrastructure level, Virgin Media and many other independent networks compete with Openreach across large swathes of the country

    Ah, now that's a statement any self respecting politician or PR frontman would have been proud to come up with. Completely true and so not challengeable, but completely irrelevant and misleading !

    Yes, there are multiple outfits with national networks. But WTF does that have to do with the question ? Answer - SFA !

    This is all about "last mile". The local exchanges round here all have competition to BT in the infrastructure and backhaul - what they don't have is anything but OpenRetch pre-corrodoed copper string. And that bit between the exchange (or PoP) and the premises is a natural monopoly - just like you wouldn't expect two (or more) lots of roads, two (or more) lots of sewage/drainage pipes, two (or more) lots of clean water pipes, two (or more) lots of gas pipes, etc, etc.

    At our office we actually do have an non-OpenRetch fibre connection. But that's a historical artifact and probably relates to exchange of amounts of cash in the direction of Norweb (or more probably, Norweb Telecoms) back when the area was redeveloped from a redundant and contaminated industrial site to modern industrial & office buildings - and the network covers nowhere else. Since then they have not, as far as I know, laid so much as an inch of new ducting - and I believe that Vodamoan who now own it as part of their acquisition of Clueless & Witless would actually like to decommission it.

    It should also be pointed out that BT enjoy a tax advantage over any competition. AIUI, and perhaps ElReg would like to investigate if this is the case and report on it, it goes like this.

    If you are ANOther network operator, your ducts, poles, radio masts, etc will all get assessed for rates according to what profit the rates assessor things they could make if fully utilised. Hence you either have to have them fully utilised to pay their way, or remove them because they make a loss - and having them fully utilised is "unlikely" to happen. We actually know of customers cut off when such networks closed down in the wake of the ratings change. OpenRetch don't have this millstone and hence enjoy a tax advantage over any competitor.

    1. AndrueC Silver badge
      Happy

      It should also be pointed out that BT enjoy a tax advantage over any competition. AIUI, and perhaps ElReg would like to investigate if this is the case and report on it

      Might be an interesting read. Is this what you're referring to? If so then this might have been Ofcom's attempt to address it.

      1. SImon Hobson Silver badge

        > Might be an interesting read. Is this what you're referring to?

        Yes indeed, that is it.

        > If so then this might have been Ofcom's attempt to address it.

        It might have been an attempt, but a completely lame and innefectual attempt.

  14. bwrl

    FTTC is not just a poor alternative to FTTH in technical terms. It's also a fantastic way to kill competition. It's difficult to believe this was not part of BT's rationale for pursuing that route.

    Why? Because by introducing FTTC, you kill LLU from the exchange, without introducing a suitable alternative.

    To remain fully competitive, competitors would need to move from the exchange to the cabinet where they would take Sub-Loop Unbundling (SLU). From the competitors' point of view, the economics of exchange access and cabinet access are vastly different. Moving into an exchange gives you access to around 10,000 lines, whereas a cabinet only gives you access to a few hundred at the most.

    On the other hand, if FTTH were introduced from the start, you would have a ready-made replacement to LLU with roughly similar economics: you just replace copper unbundling with fibre unbundling. FTTC on the other hand ensures there is no direct replacement for LLU.

    So it's not only a strategy that holds this country back, it's one that affirmatively kills competition and begins the long, dark route back to the days of the Post Office. Ofcom really need to get a handle on what's happening.

    1. Nifty Silver badge

      Says it in one, have a 1000 upvotes

    2. Anonymous Coward
      Anonymous Coward

      "On the other hand, if FTTH were introduced from the start, you would have a ready-made replacement to LLU with roughly similar economics: you just replace copper unbundling with fibre unbundling. FTTC on the other hand ensures there is no direct replacement for LLU."

      I don't think that quite works. FTTP doesn't mean each building gets its own fibre all the way to the exchange (or it doesn't if you don't want to pay £1000 a month for it). There's a shared fibre to something like an FTTC cabinet and then individual fibres from there into the buildings.

      1. AndrueC Silver badge
        Thumb Up

        There's a shared fibre to something like an FTTC cabinet and then individual fibres from there into the buildings.

        As BT intend to roll it out, yes. So far BT has always used TPON so there's nothing other CPs can do other than ask for the traffic to broken out at the exchange so that they can use alternative backhaul arrangements (as per FTTC). I don't know if any telcos have gone for a a genuine 'one premises, one cable' solution. Given fibre capacities it probably never makes sense unless you're connecting up a data centre for Google or Microsoft or some other big player.

        But I'm not sure the LLUOs are too bothered anyway. It would be very expensive for them to push their equipment further into the local loop. At the end of the day most of what made LLU attractive was the backhaul separation. Separate DSLAMs (and later MSANs) are just a maintenance cost. As long as BT can more or less keep up with demand I don't see anyone complaining.

    3. Doctor Syntax Silver badge

      "On the other hand, if FTTH were introduced from the start, you would have a ready-made replacement to LLU "

      Wrong tense.

      s/were/had been/

      How short-sighted of the telecoms industry way back in the last century to lay copper (which they had technology to make and use) instead of fibre (which they could neither make nor use).

  15. Andrew Taylor 1

    I'm sick of everyone giving BT a kicking, if they are doing such a bad job why don't Sky, Virgin et al put in their own fibre nationally like BT has to. Answer is they don't want to because BT has to bear all the costs and then lease lines to them at below market rates. In case it hasn't sunk in to all the BT bashers, this is not competition but subsidisation. If you want competition then BT 's competitors should start putting in and maintaining their own networks. Now just grow up and stop the me me me, I want fibre free & I want yesterday attitude.

    1. Anonymous Coward
      Anonymous Coward

      Regardless of who owns the network, no business can easily install something that costs £2000 and then rent it to you for £15 a month. It's especially hard when a business has to install it and then let a competitor make the profit.

      1. Anonymous Coward
        Anonymous Coward

        £2000 investment. 15*12 = 180. 2000 / 180 = 11.1 years to break even. That doesn't take into account inflation so assuming 2% increase each year a little over 10 years. Offer additional services over the fibre, the £15 would cover broadband, add another £15 for voice, so down to 5 years payback time. Stick on TV for another £15, down to around 3 years. Fixed IP, that'll be another £5 a month. So £2000 is nothing. I hope you aren't claiming it is £2000 recurring costs. Companies are supposed to invest, not be granted instant short term profit.

        1. Doctor Syntax Silver badge

          "So £2000 is nothing."

          OK, so it's nothing. For one house. Now roll it out to a million houses. Pretty soon all those nothings start to add up to real money. The there's the logistics. Let's say you have 100 teams and each team can connect a house a day*. If you want to connect a million homes then that's going to take 10k days, 27 years working 7 days a week, 52 weeks a year. How do you scale up the number of teams? Who's going to train them? Where? Are you going to pull workers out of the active times to provide the training and slow the rate of installation down in the mean time? And when they've finished connecting up every home what will the redundancies cost?

          *If you have real figures as opposed to illustrative ones please feel free to substitute them.

        2. Anonymous Coward
          Anonymous Coward

          ...11.1 years to break even...

          You're neglecting to include the cost of the loan the Telco needs in the first place.

          The additional services you mention will often be sold by other telcos (BT has a 1/3rd share of home phone market) so the revenue from those doesn't go toward paying off the investment.

          1. Anonymous Coward
            Anonymous Coward

            Not forgetting anything. BT 2015 pre tax profit of 2.6 billion. They wouldn't need a loan. Rollout would take more than a year so it only eats into some of that years profits.

            1. Roland6 Silver badge

              You're forgetting the Ofcom interference in BT's business.

              One of the problems BT has is that if it actually did something that customers wanted, like rolling out FTTP, the likes of Sky, TalkTalk et al will go running crying to Ofcom, saying how unfair it is that BT are exploiting their market dominance etc. etc.; we saw some of this in the run-up to the creation of the BDUK FTTC project.

              So we can hardly complain that BT are being reticent in the proactive deployment of new and better technology to customers without an agreement with Ofcom/government.

              Remember one of the reasons BT sold O2 wasn't because O2 didn't fit, but that there was a risk that Ofcom would decide to extend the monopoly PSTN regulations to mobile because BT were developing and marketing products like the Fusion phone (one number for landline/mobile/WiFi phone).

              What is good about Ofcom approving of the BT/EE merger is that Ofcom will have difficulty in trying to regulate it on the basis that BT/EE is a monopoly.

  16. Anonymous Coward
    Anonymous Coward

    Spin out Openreach?

    fine - no problem. Buy out the shareholders at a fair price (not just one the politicians feel make good headlines), and completely separate all of the infraco from the retail operator. Do the same to VM - force them to also offer last mile, wholesale services. then if you really want last mile competition, new challengers can come in and offer different bundles, mixes of copper, Openreach or VM fibre, and so on

    1. Anonymous Coward
      Anonymous Coward

      Re: Spin out Openreach?

      New challengers, like all the cable companies in the 90s? i.e. they will all be hoovered up by a single company such as VM. If Openreach were spun off from BT would the regulators prevent a Sky or Virgin from a hostile takeover?

  17. Anonymous Coward
    Anonymous Coward

    FTTP is cheap.

    BT have a vested interest in making FTTP appear as expensive as possible but it's far more cost effective than any other solution once you take performance, future proofing and long term maintenance costs into account.

    BT are doing everything they can to promote their alternative technologies because that's what suits their short term business interests bests. The interests of their customers and the country as a whole come a very long way behind the interests of their management and shareholders. BT would claim their interests and those of the country as a whole are perfectly aligned but it's OFCOM's job not to be taken in by that bollocks and to do what it thinks is best for the country. If that means telling BT/Openreach to sling their hook then so be it - there are plenty of better run, more efficient companies with better technology and management itching to step into the gap.

    Britain's business is critically dependent on them, but on almost any metric you care to apply, BT are a second rate operation. Financially they are fairly small, their current technology is rooted in the last century, their proposed future technology is third rate, their customer service is dire, their efficiency is crap and their management is very mediocre. The only thing that can be said in their favour is that they are probably better than what we would have if they had not been privatised.

    Oh, and while I'm on, can someone explain why OFCOM, the organisation charged with overseeing the country's most critical business instrastructure, reports to DCMS and not to BIS?

    1. Anonymous Coward
      Anonymous Coward

      Re: FTTP is cheap.

      '- there are plenty of better run, more efficient companies with better technology and management itching to step into the gap.'

      That's a nonsense though isn't it? If FTTP was cheaper, easier, quicker the BT would be doing it now. If for some perverse reason they chose not to, those other companies would be rolling out right now. How could they lose? They'd not have BT's legacy costs, no pension bill to pay; they be selling cheaper, faster broadband as fast as they could install it. Why aren't Virgin right now working to cover every single home in Britain?

      There's no monopoly in the UK, anyone can set up a network and sell service to the public.

      Other networks gave done their sums and the answers have told them not to do it - because otherwise they would be doing it. If you can make the sums add up better you should go and see your bank manager for a loan and get started.

      1. 96percentchimp

        Re: FTTP is cheap.

        "There's no monopoly in the UK, anyone can set up a network and sell service to the public."

        Nonsense, there are huge impediments to anyone wanting to roll out a physical network, whether it's the permission for street works, obtaining wayleaves, or the cost of access to BT's ducts and poles (let alone building your own). BT has significant historic structural and regulatory advantages over any incoming network provider, which is why VM still struggles under the inherited debt burdens of the individual local cable providers from the 80s and 90s, and why altnets face such struggles today.

      2. Alan Brown Silver badge

        Re: FTTP is cheap.

        "That's a nonsense though isn't it? If FTTP was cheaper, easier, quicker the BT would be doing it now. "

        BT is only doing _anything because it's being paid (by the government and by extension by us taxpayers) to do so. Given no regulator oversight it would have continued its policy of letting the lines infrastructure rot and charging as much as it can get away with for access to that.

  18. 96percentchimp

    Spin off BT Consumer, not Openreach

    The problem isn't with Openreach as such, but with its divided loyalties to BT Retail and its other customers. BT is essentially an infrastructure company, so it makes a lot more sense to spin off BT Consumer (it can still use the brand under licence) so that it truly has to compete on a level playing field with other providers.

    Openreach would then be free to meet its customers' needs as a pure infrastructure provider, either choosing to sweat its copper assets or invest in long-term provision, with the risk that BT Consumer could choose to use altnets such as Hyperoptic if it doesn't feel that consumer needs will be met.

  19. Matthew Taylor

    I'm not sure of this Woman's credentials, but anyone who holds BT Openreach's feet to the fire regarding fibre broadband is ok in my book. I live in West Kensington, London, and our Fibre rollout is barely in the planning stages.

    1. Alan Brown Silver badge

      "I live in West Kensington, London, and our Fibre rollout is barely in the planning stages."

      1: BT isn't getting govt grants for these areas

      2: Your lovely neighbours are putting in planning objections left, right and centre against the cabinets.

      The result is that BT can't be bothered because digging through the objections is expensive.

      You (and your neighbours who _want_ FTTH) may want to take note of the objectors (this is all public information) and let the area know who's blocking their better broadband.

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