back to article Openreach offers more wholesale fiber discounts, rivals call foul

Openreach has revealed new wholesale pricing for fiber-to-the-premises (FTTP), offering more discounts for internet service providers (ISPs) to encourage a migration of consumers to fiber broadband connections. However, it has already met with criticism from other network operators, who believe the company is using its …

  1. Empire of the Pussycat

    Keep him there, it's funnier and he burns more money

    (body)

    1. nematoad

      Re: Keep him there, it's funnier and he burns more money

      ?

      1. NoOnions

        Re: Keep him there, it's funnier and he burns more money

        Perhaps they thought they were on the Elon Musk story page?

  2. nematoad
    Mushroom

    I don't think so.

    "...fiber only" measure seen in the original Equinox.

    For God's sake, if you are going to quote a British proposal then at least have the courtesy to use the correct spelling.

    It's fibre not bloody fiber, that's an American spelling and I don't think even Openreach are yet using the Webster Dictionary.

    This is starting to get tedious.

    1. MJI Silver badge

      Re: I don't think so.

      I found the article was too annoying to read with nouns using the correct spelling and the writer using merkin.

      I gave up.

      I had FIBRE to the premises done this year with Openreach, was a choice, went with BT as already with BT on FIBRE to the cabinet.

  3. elsergiovolador Silver badge

    Admission

    He warned there are "too many players chasing too few pounds" in the broadband market, and that consolidation is inevitable given the amount of build-out that is taking place.

    It's interesting that something like this can be said so casually. The consolidation in the market happens if there is a complete failure of regulation. Consolidation removes element of competition, which is crucial for capitalism to work.

    Unfortunately, the problem is that organisation that get extremely wealthy as a result of consolidation, have extreme lobbying power to ensure politicians won't think of breaking them up.

    For capitalism to work, there must be a mechanism that ensures companies don't grow too big to fail and such consolidations don't happen.

    Otherwise we descend onto a path of fascism, where big corporations are in bed with government and they work together on ensuring the status quo never get challenged at the expense of consumers and diminished growth.

    1. Mike Bunyan

      Re: Admission

      I agree on lack of regulation, adding probability BT/Openreach and other majors manipulating the market.

      Sadly I see multiple fibre installations along local streets where one would suffice if the 'carrier' market were better controlled to force prices down.

      Such a waste of resources, money and environmental impact.

      1. Anonymous Coward
        Anonymous Coward

        Re: Admission

        Although I'm not a massive fan of "Big Government" I really do think that for critical infrastructure such as Gas,Electricity and Telecoms there should be a state owned national fibre network, with access available on an equal basis to anybody who wants to sell to end customers. The biggest downside of this would be if it made matters easier for Govt to snoop on comms, but I really don't think it would make any difference - they can do what they want anyway.

        1. myithingwontcharge

          Re: Admission

          Quote: "I really do think that for critical infrastructure such as Gas,Electricity and Telecoms there should be a state owned national fibre network, with access available on an equal basis to anybody who wants to sell to end customers. "

          The fact we already have an effective broadband monopoly in many parts of the country is why fibre prices are high and availability poor. We need more competition, not none. As an example, Openreach often seem to add fibre to an area only when prompted by the plans of a competitor.

          Just ask anyone who experienced it how bad the phone network was under the monopoly of the GPO or who has to deal with the Australian national broadband omnishambles.

          1. SloppyJesse

            Re: Admission

            @myithingwontcharge said

            > The fact we already have an effective broadband monopoly in many parts of the country is why fibre prices are

            > high and availability poor. We need more competition, not none. As an example, Openreach often seem to add

            > fibre to an area only when prompted by the plans of a competitor."

            So in an area where there is competition the price would be cheaper, right? I can get BT FTTC, Virgin or CityFibre FTTP. The prices are the same despite the local competition.

            Your example of Openretch magically being able to install fibre when a competitor comes along indicates a failure of regulation.

            Seems the issue is poor regulation of what should increasingly be regarded as a critical infrastructure. Competition is either being stifled or is an ineffective driver to delivering a good service to more people.

        2. John H Woods Silver badge

          Re: Admission

          The powers exercised by "big government" don't magically cease to exist if you shrink government, you just have them being exercised by people who are a) less accountable and b) less bothered about you.

        3. low_resolution_foxxes

          Re: Admission

          The usual argument against this would be that when companies (or governments, individuals etc.) are given too much monopolistic power, it leaves the management and unions with no incentive to regulate costs, and every incentive to raise costs.

          Processes bloat. Staff numbers bloat. The legal and marketing departments triple in size. Average employees start being overpaid and underworked (did I hear recently that 16% of BT employees earn over £50kpa....?!?!). Simple changes start taking 3-4 years to implement. Costs must increase at 3-8% per year to maintain the status quo.

          BT are paying ~ £1bn a year just to fund the hole in the retired employee pension fund.

          And then you get an altnet who comes in with no debt, no sprawling empire of 500+ processes, and simply gets on with the job of laying fibre optic cable wherever it needs to go for half the price.

          That being said I'm actually a reasonably content BT broadband and EE customer. But they are on the pricey end.

      2. crg the new one

        Re: Admission

        Please don't buy the "fibre is expensive to implement" thing, cause it's extremely cheap.

        The same Vodafone from UK offers 1Gbps in Romania on £10 because, if it's more expensive, everybody would buy it from the competition.

        So: I'm Romanian, Romania has had fibre since, don't know, 2006, was installed by private companies with no government help, and those companies installed it knowing that, at an average income of £300 per month, nobody would pay more than £5 per month, so it can't possibly cost much to install.

        1. Martin Summers

          Re: Admission

          "so it can't possibly cost much to install."

          Not if the installers wages are that low too. It's all relative. Does your average Romanian find £10 a month cheap?

          1. elsergiovolador Silver badge

            Re: Admission

            Not if the installers wages are that low too.

            You are framing it wrong. High wages of UK workers would have negligible effect on the end price. It's about chasing that profit.

            1. Anonymous Coward
              Anonymous Coward

              Re: Admission

              Not quite. Openretch could have saved a fortune and made far bigger margins if they'd been able to bring in Romanians on $1/day to install the fibre. Brexit put the kibosh on that.

        2. Anonymous Coward
          Anonymous Coward

          Re: Admission

          I would hazard a guess that it's much cheaper to dig up the street and install fibre in Romania than it is in England. The actual cost of the fibre will be roughly the same. But getting permission to install it - licences, wayleaves, planning permission, etc - and paying someone to put the sodding stuff in the ground will be far higher than in Romania.

        3. Anonymous Coward
          Anonymous Coward

          Re: Admission

          In the UK we could have had rudimentary fibre in the 80s but it was sacked off for some reason.

          1. Rob Daglish

            Re: Admission

            I remember going to our local telephone exchange as a Cub Scout, which dates it to 1987-90ish.

            We got shown the underground room where giant bundles of copper cables which were bigger than our arms entered the building. We then all got given (and I still have it somewhere) a two inch long strand of fibre in a laminated card with some British Telecom branding on, and were told that this was going to be the future as we were one of the first areas to implement this new technology, which was going to revolutionize telephones and sending data (no WWW then!)

            The next stop was upstairs where the Stowger switches were clattering away, and I feel a little bit nostalgic about that now...

            1. bloggsy

              Re: Admission

              Strowger

        4. low_resolution_foxxes

          Re: Admission

          The trouble was, BT were in a mess due to the scale of problems at their staff pension fund.

          It was more tempting for BT management to sweat the last few drops of profit out of the copper network, while the government at least put in place financial support and tax incentives to encourage the FTTP rollout.

          FTTP itself is relatively cheap to install provided there is existing ducting. But ducting problems are reasonably common and some new installations/repairs will be expensive.

          Every incentive is now in place for FTTP to keep BT relevant. With 4G/5G allowing wireless broadband that can move with the user, the copper networks have no option. If they do not keep up with technology they will become obsolete. It's always hard to survive when 40% of your customers suddenly have a cheaper and/or better option.

          1. Anonymous Coward
            Anonymous Coward

            Re: Admission

            What do you mean "were in a mess"? BT are still in a mess. An almighty mess is the normal state of affairs at that fucked up company. It's been like that since it was part of the Post Office.

          2. Anonymous Coward
            Anonymous Coward

            Re: Admission

            Then why is it so hard to get FTTP? My only viable broadband option around here is Virgin Media...who haven't been terrible to be fair, they just treat long standing customers with a certain amount of hatred...you can't ever swap to a better deal as an existing customer. Only new customers get the stonking deals.

            I can get BT "fibre" round here, but the speed caps off at 76mbps which for this day and age isn't great and it costs the same as a 600mbps connection from Virgin.

            One of the main issues I've noticed is that providers want at least 50% penetration on a street before the commit to running cables down it, which means if you live on a street with more than 50% of people that decide "ADSL is fine for me, it works" you're fucked.

            You're extra fucked if these people have no intention of selling their houses any time soon because broadband availability can knock easily £50k off the value of your house (depending on where it is).

            A friend of mine sold his house somewhere out in Berkshire a few years ago and he lived on a street where broadband availability was crap, every other street around him had high speed broadband, but his street did not. It fell through 3 times, twice specifically because of broadband coverage.

      3. Anonymous Coward
        Anonymous Coward

        Re: Admission

        Hell no. You need competition to maintain standards and keep prices down.

        Shared access to conduits...now there is something I'd agree with. There's no point digging up a road if a conduit already exists.

      4. NeilPost

        Re: Admission

        Same here.

        City Fibre started digging around here 4 months after Openreach completed upgrading to FTTP for free, using existing ducting/telegraph poles and a Master Socket/NTU swap. Our cheapo Talk/talk FTTC real world 30/10mbit became a solid FTTP 70/20 mbit instantly at no extra cost.

        <Been a VM area with their FTTC/DOCIS copper hybrid for years (though we’re are on ‘the wrong side of the road’ as far as a VM Install is concerned).>

      5. Roland6 Silver badge

        Re: Admission

        From the shenanigans that surrounded the startup of the BDUK programme over a decade back, I suggest the (Conservative) goverrnment were willing participants in the market manipulation that created an environment that satisfied EU government funding constraints whilst favouring the maintainance of BT's near monopoly, at the expense of the new entrants and ultimately the consumer.

    2. John H Woods Silver badge

      Re: Admission

      To be fair, the essential requirement for such regulation in order for capitalism to work effectively is easily missed by those soi-disant devotees of Adam Smith who have never read a word he wrote.

    3. John Robson Silver badge

      Re: Admission

      Yes - they're chasing each other round laying fibre in the same places...

      Go and find somewhere three miles away and lay fibre there instead, then you'll have all the custom on that road, rather than not having custom because those who want fibre have already got it.

      1. NeilPost

        Re: Admission

        Esp. As all the VM customers want rid of the tedious fleecing attempt dance at annual renewal.

  4. Flak
    Flame

    Ex post vs ex ante

    Why does Ofcom often not fully see what is going to happen and then only realise after the fact when the damage has been done?

    The same game has been played by BT / Openreach over the decades. I have seen and experienced it personally in various guises on PSTN services (remember those), 'tail' circuits' used for a variety of services (leased lines, Frame Relay, ATM, MPLS IPVPN) and large managed network solutions.

    There should be greater emphasis on ex ante regulation (before the proposed change kicks in) and a realisation that ex post may result in a reversal, but customers who signed up will already be locked in.

    Have been out of this particular game for too long to be fully up to speed with recent history, but I saw some shenanigans being played where Openreach started charging extra for services that were used by other service providers to aggregate full fibre services on their infrastructure and then wanting to backhaul aggregated services using Openreach. See 'Ethernet Access Direct (EAD) including EAD Enable' on the Openreach price list - Note 31 - it even has its own column now on the price list. Robbers!

    1. I can't believe its not butter

      Re: Ex post vs ex ante

      That'll be because the boss of Openreach (Mike McTighe) also served on the board of Ofcom.

      So he'll know perfectly how to avoid Ofcom intervention. And because Openreach is completely owned and funded by BT....well, obviously you don't annoy your funding source.

      All of that is simple public records:

      https://newsroom.bt.com/mike-mctighe-to-be-first-openreach-chairman/

      https://www.openreach.com/about/how-were-led

      Still. Nothing to see here. All legal and above board.

      Now excuse me, I've got some bridges to sell.

  5. Rasczak
    FAIL

    Know who your rivals actually are

    <Quote>

    [CityFibre}CEO Greg Mesch saying in a statement that "BT Openreach is exhibiting a series of behaviours"

    </Quote>

    If the CEO of a company doesn't even know the correct name for the rival company he is talking about, why should his comments, or indeed his company, be taken seriously?

    1. Anonymous Coward
      Anonymous Coward

      Re: Know who your rivals actually are

      https://www.openreach.com/about/how-were-led :

      "Openreach Limited is a wholly-owned subsidiary of British Telecommunications plc but is independently governed. Openreach Limited trades on behalf of British Telecommunications plc."

      1. Rasczak

        Re: Know who your rivals actually are

        Exactly, you agree that the CityFibre CEO doesn't know the correct name of a rival company.

        1. Richard 12 Silver badge

          Re: Know who your rivals actually are

          In that case, neither do the employees.

          The team of fibre installers dragging cables down the road said they were "BT", and the van had "BT Openreach" written on the side in quite large letters.

    2. Anonymous Coward
      Anonymous Coward

      Re: Know who your rivals actually are

      That CEO can't be taken seriously because they said "behaviours", a non-word used by stupid people to impress even stupider people.

      Still, he might have a point about Openretch or BT or both being evil.

      1. Rob Daglish

        Re: Know who your rivals actually are

        It's the plural version of behaviour according to the OED, and I'm fairly certain they'd have checked before putting non-words in there...

        My psychology text books have used "behaviours" quite a bit in the last 12 months when discussing learning and development in animals.

        Mind you, that maybe makes your point ;)

  6. that one in the corner Silver badge

    I'd happily migrate

    If they'd bleepin' well supply some fibre.

    Not a lot of use lowering prices if they are going to turn around and say we can't afford to complete the supply to cover the entire village!

  7. Lorribot

    They missed it by 30 years

    BT offered to fibre up the country if they could sell services back when Cable TV became a thing (90s?), however the Thatcher Government of the time wanted the fledgling cable companies to get started to create competition, so it has taken 30 years for the country to start getting fibre and all those cable TV companies are now called Virgin and it still only cover about 10% of the country.

    This is what happens when governments interfere with markets and artificially create competition.

    Also are al those small companies obliged to allow other companies to resell internet on their fibre?

    I have never lived anywhere where I had a choice for internet, be that LLU or different wires/cable. It has always been BT/Openreach and the speed/service is always been the same whoever was (re)selling it to me.

    On some new housing estates near me they have HyperOptic because BT was taking forever to get anything other than ADSL set up. No one else is doing anything to get my money so it is OR i am with.

    All the small companies had their chance to be nimble, get in to all the new housing estates being built, target areas where ADSL or FTTC is appalling poor, I had 13/0.5Mb on FTTC and latency that went as high as 3000ms regularly due distance and old cables, the first company to lay fibre to my door got my money, that was OR, so frankly those small companies have missed the boat that was docked, waiting for them for 30 years.

    1. Richard 12 Silver badge

      Re: They missed it by 30 years

      BT Openreach have been playing silly buggers throughout.

      The most common sequence is that an alt-net announces they've secured funding to begin installation in $village, and two weeks later Openreach announce they'll be installing in $village next month.

      Funding for the alt-net collapses, and then Openretch suddenly postpone installation indefinitely.

      What's happened recently is that the Tory Government have started paying BT and City Fibre (mostly) to do installations, so they've suddenly started bothering.

      Of course, this also means the vast majority of customers cannot actually take up the service because they're currently locked into a 12-24 month contract as there was nary a hint that full fibre would be available when they signed it.

      And yes, I am somewhat annoyed by this.

      1. NeilPost

        Re: They missed it by 30 years

        Probably as it fails a return on investment and needs some funding to make happen.

        You know same as private roads like the M6 Toll Road which has been a financial money-pit.

      2. Anonymous Coward
        Anonymous Coward

        Re: They missed it by 30 years

        "Of course, this also means the vast majority of customers cannot actually take up the service because they're currently locked into a 12-24 month contract as there was nary a hint that full fibre would be available when they signed it."

        Most ISPs will let you upgrade mid-term without issue, unless you're unlucky enough to be with one that doesn't resell Openreach fibRE products.

  8. Myleftboot

    Hahaha

    The Altnets wanted an open market, and now they don't? Their substandard network through PIA is destroying the existing copper that most homes still rely on, and they expect BT/Openreach to just lay back and take it?

    1. I could be a dog really Bronze badge

      Re: Hahaha

      OpenRetch is a natural monopoly in many area - and it certainly has a massive dominance.

      What the Altnets are asking for is a level playing field. Effectively, just like the earlier version of the scheme mentioned, OpenRetch are deliberately structuring the scheme to make it "not cost effective" to use altnets at all.

      If it were as simple as "make X% of all the connections you buy from use FTTP and you get Y% discount" then that would be OK. But it's a case of "place X% of ALL connections you sell as OURFTTP and you get Y% discount". Lets say X is 80%, and the ISP is still selling some copper connections. It could be that if it places just 10% of it's connections with an altnet, it could not meet the requirements for the OpenRetch discount. With a situation like that, no ISP would buy connections from the altnets unless the altnets could sell so much cheaper that the overall cost was lower. Given that the altnets don't have the same coverage, in effect they would have to have massively lower prices than OpenRetch - effectively subsidising the ISP for those connections it did buy from OpenRetch.

      So, just like the earlier version of the scheme, this discount scheme is designed to limit how much business ISPs place with altnets by putting an artificial and deliberate financial penalty in the way of any that did.

  9. GreyWolf
    Flame

    Whimpering

    City Fibre clearly think they have a right to a guaranteed profit, and want OfCom to make the arrangements. City Fibre, if you are not prepared to do the work to compete, don't expect the profit. [Nota bene: if Openreach and BT are so incompetent, how come it is so hard for City Fibre to beat them easily?]

    In other news, City Fibre can't find their arse with both hands. They have laid fibre in our county town, but only in the centre. Half a mile from the Central Square, we have heard nothing but promises (and no action) for three years now. There's a golden harvest just waiting for someone who simply gets on with the job.

    Furthermore, they are only interested in the part of UK where the population is densest. Beyond the edge of town, you'll be dead before anyone other than Openreach installs anything.

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