Ofcom chisels away at BT Openreach's cold, dead hands Ofcom has set out exactly how it plans to prise open BT's grip on the UK's telecoms infrastructure, in a move designed to make it easier for competing telcos to install fibre broadband connections. "Ofcom wants to ensure all providers can lay fibre in BT's ducts as easily as BT itself," said an Ofcom statement. "So we intend …
The best way to get ubiquitous cheap fibre everywhere is to force Virgin and the altcomms to also allow third parties on their network ala openreach with xdsl etc. Virgin will soon get greater take up in over built areas forcing BT to go fibre there to maintain market share. Altcomms will then be like Kelly comms is to openreach, and will be spurred on to build out fibre to meet the demand of the big isp's like talk talk and sky customers.
Drumming away at BT making fibre cheaper will not encourage others into the markets as the returns keeep getting diminished by ofcom policy.
Agreed this should be universal - but you miss the fact that BT / Open Reach already has ducting across the whole of the UK, Virgin on the other hand only has a small percentage. Additional most "Altcomms" down have their own ducting or infrastructure, they simply resell BT services or rely upon them to provide last mile and backhaul.
So the they are simply making the 1 "simple" change that will have the most impact..
Just saying - I don't agree or disagree either way. Fact is we're still in a better position than most of the US ;)
Not missing the fact about openreach' ducts at all. The point Is to encourage an alternate last mile like Virgins. Virgin won't build unless they know they can convert homes passed into customers. Haveing more ISP's selling will encourage wholesale uptake hence opening up Virgin and alt nets to third parties will convert more homes passed into active usage therefore spurring more competition in the access market. That's the point.
Virgin won't build unless they know they can convert homes passed into customers
It's actually worse than that. The block of flats where I live is physically adjacent to a Virgin cable, but Virgin will not provide service because the flats have a communal satellite dish (for which, incidentally, we had to get the permission of Virgin's predecessor) and Virgin do not consider the revenue from broadband alone to be worth the bother of connecting a length of coax - it's the TV revenue they want.
Our area which was originally fibred up by Telewest, now owed by Virgin.
I know of quite a few places that are surrounded by Virgin cable properties, but can't get it themselves because Virgin are not fitting any new lines. Some of these are small housing developments in the middle of older cabled-up estates, others are individual houses where the original cabled up property was knocked down and rebuilt, but they now cannot have cable put back in.
I have Virgin cable broadband and can't deny it works well for me, but I don't believe they have any real intention of growing their fibre network until competition forces them to.
Letting BT's monopoly steal Virgin's fibre-only customers sounds a great plan!
And then, obviously, what they'll do is sink millions into cabling up a couple of streets that weren't served by either company anyway, just to give people faster speeds at prices that they won't recoup the money from in decades (*).
I think you forget that, apart from new builds that pay for it, the only "cabled" areas in the country were put in by a company that went bankrupt and was bought out by Virgin for a pittance. Everything else is BT / Openreach over cables that have been there for 50 years and/or you have to pay quite a lot to install a new line.
And the rest of the "fibre", even on BT, is not really fibre at all. It's VDSL or DOCSIS 3 with a fibre backend. Unless you have a leased line and paid through the nose to install it, you're not getting fibre anyway (I know - I've bought three of them for workplaces, they aren't cheap but they are real fibre).
(* Do the maths - a leased line install to a cabinet costs on the region of £10k for the install alone.
Connecting that cab to the nearest cab/exchange costs the same because it's all wayleave and digging pipes, not the actual thing you lay inside them.
That cabinet will happily serve the street, if you dig the entire streeet up or run phone lines to every house, costing a lot more than £10k.
And you want to pay, what, even £50 a month? How much of that goes to the people who put in the infrastructure rather than the ISP? Less than a quarter? That's going to take them something like 2000-5000 monthly payments alone just to get their install money back, not counting ongoing costs and actually providing the service to you. How many houses in your street? 50? That means either every house for 10 years, guaranteed, or most of the houses for, say, 20 years. JUST TO RECOUP INSTALL COSTS.
There's a reason nobody wants to pay to connect up people, especially in rural areas where you run 10s of km of cable to service a handful of people. It just doesn't scale without massive subsidies)
I'm well aware of the costs of leased lines and hassle of way leaves. It's expensive for a reason. You can get any speed you want anywhere you want so long as you can afford to pay for the connection. The connection being the physical fibre, civils, lawyers, and active kit at each end plus the staff to hook it all up and do meaningful stuff.
Ofcom are ploughing on regardless of the actual costs of connecting domestic households with proper connections that'll last the next hundred years of more. The altnets are paying lip service to connectivity doing it as cheaply as possible, almost surface ducting etc.
The future is wireless. FTTP is an expensive side show. If you want FTTP do it properly and robustly and hopefully with more than 1 provider doing lastmile. Beating up the incumbent, lowering prices reducing the incentive for others to compete is nonsensical. Third party BB over OR provides next to no reason for OR to improve. Third parties able to choose OR or Virgin incentiveces OR to improve their offering and will keep prices competitive.
"How come that BT has a monopoly while Virgin has customers? The two seem contradictory?"
I get what you are trying to do here, make out everyone is having a go at poor old BT.
Monopoly us? Noo.... we're just a little struggling copper carcass based Telecoms Company.
Get Real.
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Because that's how BT is defined by Ofcom, having significant market power. aka. a Monopoly.
1.16 We have also provisionally concluded that BT has significant market power (i.e. has a dominant position) in the market for standalone landline telephone services.
https://www.ofcom.org.uk/__data/assets/pdf_file/0030/97806/Consultation-Review-of-the-market-for-standalone-landline-telephone-services.pdf
The buildings, wayleaves, and ducting are for the most part, taxpayer's infrastructure, built in the years between the nationalisation of private phone companies in 1912 (with the major exception of Kingston-upon-Hull) into the General Post Office, and the privatisation of BT in 1984.
Quoting Wikipedia: ( https://en.wikipedia.org/wiki/General_Post_Office#Telephone )
"The Post Office commenced its telephone business in 1878, however the vast majority of telephones were initially connected to independently run networks. In December 1880, the Post Master General obtained a court judgement that telephone conversations were, technically, within the remit of the Telegraph Act. The General Post Office then licensed all existing telephone networks.
The effective nationalisation of the UK telecommunications industry occurred in 1912 with the takeover of the National Telephone Company which left only a few municipal undertakings independent of the GPO (in particular Hull Telephones Department and the telephone system of Guernsey)."
The state-owned assets were transferred to the statutory corporation, British Telecommunications by the British Telecommunications Act 1981. This statutory corporation was privatised in 1984.
You can argue that 'stuff' bought by BT since 1984 is not a taxpayer asset (33 year's worth), but the telephone exchange buildings, ducting, and probably most importantly, the wayleaves were mostly obtained and built in the government owned and controlled era (1912 - 1984).
When competition was allowed, Mercury Communications had to get ducting and wayleaves - so laying fibre alongside railways (where you only had to negotiate with one landowner) was one technique they used, as well as buying the London Hydraulic Power Company for its system of pipework (and wayleaves) covering a lot of the city. Later on Energis put fibre on the same pylons that carried the high-voltage power transmission network - again for wayleave reasons. A wayleave is a very good example of an intangible asset that can be worth rather a lot. BT sit on a huge pile of wayleaves and freeholds obtained when it was a government (taxpayer owned) entity.
All new development, whether residential or business, really ought to incorporate ducting and communications rooms that are statutorily available to all - a bit like the road network.
@Norman Nescio
Don't forget the government sold all those assets to the public when it floated BT on the stock market.
The public purse initially purchased the assets but they where then sold.
I guess you are suggesting the assets where sold off too cheaply? to understand that you will also need to account for the additional taxes BT paid since privatisation as they became more profitable and expanded into things like mobile and BB.
>you will also need to account for the additional taxes BT paid since privatisation
BT were pretty damned profitable before privatisation (profitable enough to pay for the development and installation of System X - out of profits alone).
SInce privatisation (on the cheap), the Exchequer has been deprived of those profits.
"SInce privatisation (on the cheap), the Exchequer has been deprived of those profits."
And given what happened to the Post Office, a good thing too!
If the Exchequer had retained BT's profits these past 30+ years, do you think you would realistically be using anything faster than a 56kbps dial-up unless you were prepared to pay £££ for it?
>Don't forget the government sold all those assets to the public when it floated BT on the stock market.
The public owned them - they were sold to the private sector.
> to understand that you will also need to account for the additional taxes BT paid since privatisation
BT is high on the list of corporate tax avoiders - see Ethical Consumer,Tax Research UK etc. A hundred years from now we'll still be looking at a Net loss.
At the end of the day, private companies have a responsibility to their shareholders to pay as little tax as possible, to provide the lowest QoS to consumers they can get away with and exploit any advantage over rivals that they can. BT is a perfect example.
A daily reminder that this is the future you were promised: https://www.youtube.com/watch?v=EUcF_OuV19k
Still waiting for my wide-band coaxial cable.
Ofcom's plans give BT too easier a ride, it means BT can continue to install G.fast Copper carcass based technologies, yet this then prevents alt-nets also using their own copper vectoring technology in those locations.
If there is so called 'competition' in an exchange area, the only thing BT should be allowed to install/invest in, is pure Fibre, to compete with alt-net's pure Fibre, to keep the playing field level.
We need to move on from BT's Copper Network, we're spending vast amounts (via Ofcom) to monitor / regulate "up to" bamboozled, obfuscated copper based networks, money that could be spent putting fibre in the ground, negating much of the need for that regulation.
There needs to be a mandated directive - zero tax payer payments to further funding of any copper based investment in BT.
Enough is enough.
"There needs to be a mandated directive - zero tax payer payments to further funding of any copper based investment in BT."
This is more-or-less what was done in New Zealand to force the splitting of the incumbent into a lines company and a dialtone/connections company.
The problem isn't BT as such, the problem is that the commas market is dominated by a vertical monopoly with control of both infrastructure and retail with a vested interest in preventing any competition in the retail level.
ALL the arguments against splitting BT were advanced against splitting Telecom NZ (which isn't strange - TCNZ tried to sell the BT/Openreach model to NZ regulators as the way forward, to the stage of aping the same setup) and ALL those arguments were proven fallaciious (especially the pensions liability claims).
The real problem is Ofcom - as a technical regulator they're passable but as a competition and markets authority they're both decidedly lacking in teeth and arguably massively duplicating an existing regulator.
This was also proven in New Zealand when the Commerce regulator stepped in, documented the level of damage that TCNZ's monopoly was doing to NZ's GDP AND what BT was doing to the UK GDP (percentagewise, about the same - 3-5% - it adds up to hundreds of billions each year) and put its foot down, refusing to let TCNZ use the BT/Openreach sham in New Zealand.
The telecoms regulator said it is "concerned" that the UK has low coverage of fibre-to-the-premises broadband connections.
I assume the idiots at Ofcom have forgotten the background to the BDUK project and why it was agreed that basically BT should deploy FTTC and not FTTP...
Openreach now install direct FTTP on all newsites of 30 premises or more, they supply the duct for free to the builders and they install it at the same time as gas/electric/water. They then get paid for the network they install.
The problem comes when customers at the new homes try to order service from sky/talk talk etc. Nobody but BT offer a service over FTTP as nobody else has coughed up the money for the exchange end network!
All the other providers will moan about BT/Openreach and Ofcom are splitting them but why are they not forcing other providers to install equipment to increase competition??
BT or Virgin will get the first 100+ customers on the sites then sky/talk talk will take the plunge and install and moan about unfair monopoly. Seems BT can't win.
Ref: BDUK everyone had the opportunity to bid for the work/network but everyone other than BT/Openreach wanted to install and run. BT/Openreach agreed to maintain it and also give money back if the take up was over a certain percentage (ie was commercially viable).
Can you believe an MP called for an enquiry into why one area was done for less money than bid for and they handed money back!? The money was reinvested and other areas covered but they wanted to know why BT quoted so much to start with. Just shows some people are never happy.
>I also feel that, for sites 30 or more, Virgin should be forced to lay coax,
The problem isn't always with the developer or ISP. The development I live on was intended to be cabled by Virgin, only the planners decided that cable wasn't in keeping with the rural area the development was located in...
BT executives took the crazy decision to attempt to turn a communications company into a broadcast media company. It wasn't what the customers, the British Public, wanted as a service or needs long term. As a consequence investment in new infrastructure was focused on a latency insensitive asymmetric broadcast network. It's not useful for voice communications nor the Internet of Things, just music and video downloads. The money spent on FTTC gives a short term advantage, but is a technology cul de sac. It is in effect, wasted money when BT should providing a fast symmetric low latency network. Along the way it should be bringing its neglected ducting into a good operation state.
Sadly it needs Government (OFCOM) intervention to force BT to do the right thing. Apportioning the cost of maintaining the edifice should be shared amongst the tenants, but that is just a matter of billing.
Sky was using free broadband to take customers from BT – very successfully. BT had a choice: die, or compete. It chose the latter. There was no alternative to BT TV. You are however correct to identify that current broadband issues originate from around that time. Because of the Ofcom-endorsed constant downward pressure on prices, including Sky giving broadband away for free with Sky Sports, it has been a race to the bottom for both prices and quality; there has been precious little money to invest in new infrastructure. Consequently, the copper network has been poorly-maintained, but more egregiously there has been no case for incremental FTTP: in other words, because people refuse to pay more than £30–40 per month for their broadband, there is no business case to replace copper lines with FTTP lines. If there were an investment case for this, do you not think that other companies would have done so? In fact, of course, many companies have cherry-picked in central urban areas, but the vast majority of the UK remains without FTTP, without there being any prospect of this changing in the future.
We also have the advantage of being able to look to NBN in Austrialia, where delusional visions of FTTP also met commercial and technical realities, and the 'all-fibre' aspirations with which the programme started have been replaced by more achievable goals.
FTTP is like first class airline travel: everyone says they want it, but when you ask them if they are willing to pay for it...
Wireless can work, but in order for it to work well you need line of sight wireless.
For my area this could work well, our copper is connected via an overhead from a pylon. Connect fibre to/from the green box to the pylon. Line of Sight from each house to the pylon.
I appreciate this won't work everywhere but perhaps a different approach is needed to different areas?
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