'Massive game-changer for UK altnet industry': BT-owned UK comms backbone Openreach hikes prices on FTTP-linked leased line circuits BT-owned Openreach has slapped a "massive" price increase on connections used by alternative networks for FTTP aggregation, with critics claiming it will "revert the country to a BT monopoly". The infrastructure arm - which BT legally dislocated in 2017 - recently published notice of a price hike in what it will charge …
Well BT and OpenReach are technically separate now, and have been for three years.
The problem is, OpenReach inherited their network from BT (all the way back to when it was part of the Post Office), so they still have (almost) a monopoly on the wires across the country. It also seems they inherited some execs from BT as well, because their reaction to this monopoly is to use it to try and fuck over ever single competitor as much as possible.
It would be interesting to see if they're trying to raise prices for BT as well.
The issue is they are not separated, as Openreach is a subsidiary of BT Group; and that is where the issue comes from, rather than being due to where the lines were inherited from.
Openreach don't even actually own the network assets, they are still owned by BT Plc, so Openreach effectively just operate as a custodian of their parent companies infrastructure.
Until BT Group are forced to sell Openreach in full, then they will always have -in one way or another- an influence over the way Openreach discharges its duties as the custodian of the infrastructure. It's safe to assume that this influence will always ensure (to the maximum extent permitted by regulation) that Openreach's commercial activities with other businesses who are not also owned by BT Group are prevented from allowing said businesses to compete with other BT Group entities too fiercely.
@maker - the problem is that BT can easily sell it as a loss if Openreach make profit on it, because they're all part of the same group. If it costs Openreach £10 to provide it, they sell it to "everyone" (BT and competitors) for £50 but the end customer usually only pays £30 for it:
Competitor - Not worth buying because they lose £20
BT - Sells it to the customer for £30, pays Openreach £50 (loses £20)
OR - Sells it to BT for £50, only costs £10 (gains £40)
The BT/OR group is still £20 up, and the competition don't get to use it because it's "not economically viable"
Compare the same scenario where Openreach sell the service for £20:
Competitor - Purchases it and makes a £10 gain
OR - Sells it to competitor and makes a £10 gain
BT - Purchases it and makes a £10 gain
OR - Sells it to BT and makes a £10 gain
BT/OR is actually £30 up in this scenario, but now the competitor has an advantage too because they don't have to build their own network. Additionally, they probably have to reduce their retail prices (so let's say they both knock £5 off to be competitive), now BT/OR is in exactly the same position but dealing with twice as many customers for the same margin.
BT/OR are hoping that a higher price will keep more customers on their BT network basically, and let them charge more for it
5 BT execs were offended by your post. You are spot on. After inventing ADSL BT held back Broadband in the UK at every possible opportunity. I've not forgotten how they corrupted Broadband NOW! who were set up by the government to stimulate private groups to roll out their own WiFi and Fibre based rural broadband. Yes we now have villages like Great Maplestead Essex with 50meg with 500meg fibre being rolled out now. This village is listed 3rd in the Daily Mail's slowest broadband at 0.42meg based on BT numbers.
No thanks to BT who corrupted Broadband NOW! by obtaining inside info and claiming to be installing ADSL in every village which sought the grant.
The company to watch is CountyBroadband.net who are delivering 500meg symmetrical fibre service to rural areas. They abandoned BT years ago.
BT's links don't work in this way so no it won't impact BT in that way.
This is about CP's using a relatively cheap domestically aimed product instead of using full links back to the headend.
The 'issue' with this is that using consumer grade terminations as backhaul could well impact other users as you could find a whole building connected to one FTTP connection and so the other 32 people connected to the PON don't get what they expect at all.
In reality this is a very strange thing as for OR to actually tell what is going down the pipe they would need a highly intrusive level of inspection which probably breaks a stack of laws irrespective of what people have signed away.
The bigger problem is how do you tell the difference between two cases
a) you run an office building and get an FFTP connection and split it and supply part of the split to your desks and tenants; or
b) you get an FTTP connection and split it to domestic dwellings.
As OR's burble is written case (a) is OK but case (b) is not OK. Go figure.
Correct.
What it seems to be is you rent a leased line with a specific capacity - it should "cost what it costs". Instead, OpenRetch are saying that if you use it for "the wrong sort of thing"* then they'll add on random extra charges. It shouldn't matter what you use it for - if you've paid for (say) 10Gbps, then you should be free to use the 10Gbps for whatever you want. And unlike in the heavily contended xDSL market, for leased lines you do actually pay for the capacity you are suposed to be getting and there should be zero saving for BT if you don't actually use it all**.
* Where "wrong sort of thing" == "competing with BT" in a way Bt doesn't like.
** For leased lines, you are sold a guaranteed bandwidth - and most of the reason for the high cost (and yes, the cost is eye wateringly high) compared to (e.g. xDSl circuits) is that BT then have to guarantee that bandwidth through every path and node the circuit is routed through.
Ofcom has no teeth and will do nothing
I utterly refute that statement. Ofcom will most certainly do something. They'll say "We don't like the way you're operating, and if you continue to behave like that then we'll have no alternative but to say 'we don't like the way you're operating' again".
"But if companies do want to use this route rather than building their own Full Fibre networks."
Couldn't sound more smug if he tried right? This of course being their own full fibre "network" that has its core foundations and origins in the taxpayer funded telecom networks that were built in the 60's and 70's, and over which until only recently they and BT have had an absolute monopoly, including 100's of millions of additional taxpayer £'s to deliver effectively nothing of particular value; so let's not bring up the rural broadband fiasco that they and BT totally failed to deliver on right?
Hopefully this is the sort of smarmy reactive comment that will come back to haunt them within the next 10 years or so when they become irrelevant.
BT have been a private company for so long now that arguments about what they had when they were part of the Post Office are largely irrelevant. There will be some copper cables, ducts and the exchanges. Anything to do with modern networks has all gone in since then. Many of the exchange building have been replaced as well.
Let's say that Virgin was essentially the dominant player instead of BT, would things be any different? The gripes would all be the same, just directed at another company.
They also have a Universal Service Obligation (whether they meet is is another matter) that no other provider has. This is what has totally shafted Royal Mail, private companies can "compete" with Royal Mail but don't have to do any of the high cost low or loss making bits. RM has seen huge chucks of profit making business taken by the likes of UKMail only to have to do the last mile of the UKMail service for a pittance.
I am not saying BT is in the same position but the reason they get money from the government is partly to do with USO. They have also been tasked with rural broadband etc but the more competeing companies take all the profitable sectors leaving behind all the dross that is too expensive/difficult/non commercially viable the worse it will get.
Where I live we have BT or nothing because Virgin refuse to put anything in that either has to cross a railway line or requires a duct around 3 miles long. Why don't Virgin want to do that? Because it is not commercially viable and as a totally private company they can do exactly what they want.
Not only did BT fail to deliver on rural broadband they actively blocked their competition. If people need to have a broadband connection they will suffer 500k if they have no choice. With no competition BT still make the same money as if it was 2meg. Same with industrial estates. Those businesses will generally pay only a little more than people in a housing estate but many fewer customers in the same sized area.
"If people need to have a broadband connection they will suffer 500k if they have no choice."
"They charge £500k as it costs £500k. Do you give your services away for free?"
@Maker, you seem to be confusing a 500kbit/sec broadband line (which is the minimum Openreach will supply and still call it "broadband") with a £500k cost, which would pay for five of the most expensive leased line install I've heard of (someone got quoted £100k for a leased line as it invoved digging up six lanes of the M4)
So glad I stopped paying for a landline.
Never looked back.
No spam calls.
No unnecessary bundled services.
No crappy hardware and cabling.
No engineers and their terrible excuses.
I bump it down to other people to deal with and let my 4G provider argue all that nonsense, with a spare 4G SIM in my phone on an entirely different network if I ever do have an outage.
Did 1000Gb last month. Cost me £18, on a month-to-month contract. Would've only cost me only £15 if I bothered to keep up with my provider's offerings.
Use it to stream TV and video content to my phone while I'm out and about, also have an always-on VPN over that to my external server should I have a need to do anything vaguely techy. The pair together cost me less to run than a BT-based landline, and I have paid far less in hardware than even a line activation costs (£160 I was quoted! Plus a day off work).
BT have always been a shower in all their forms, both personally and professionally. I avoid them like the plague. Let someone else deal with them.
You must be very lazy. If you live on an island then put up a dish to connect to another dish on the mainland. Then have your island Access Point beam it out to the homes. I expect that's already been done and you are even lazier and have not even been to their website to order the service. You're also not very observant since the antennas will be on people's chimneys.
Ah, so you have a leased line, then do you?
Because all DSL lines are contended, including VDSL "fibre", and "best-effort"
And if you've lost electricity supply, the Internet is going to be down, really. If not immediately then within a few hours when your computer falls over.
Guess what - when the power goes down, those mobile towers are probably going to be the last thing to fallover, and even your phone lines will go eventually too (certainly I don't know of any obligation on BT to power your DSL in an emergency, only phone lines for 999 calls).
4G contention is massively more than any xDSL service, especially in areas with fewer mobile masts for a given network.
"And if you've lost electricity supply, the Internet is going to be down, really. If not immediately then within a few hours when your computer falls over.
Guess what - when the power goes down, those mobile towers are probably going to be the last thing to fallover, and even your phone lines will go eventually too (certainly I don't know of any obligation on BT to power your DSL in an emergency, only phone lines for 999 calls)."
Our local mast goes down within half an hour, every single time. xDSL is still serviceable in that timeframe and FTTP has to be due to your own arguments regarding PSTN services.
Mobile data services are great if you're a light user, don't need anything remotely clever (static IP etc) on your connection and don't mind if you lose service in high winds, power cuts or when the mobile network decides to reduce coverage. We use it as a backup for our fixed line comms, its definitely not a replacement unless you can get nothing else.
I don't really mind, because my 4G gets me the speed I want. Extreme situations are unlikely, rare, and present on all services. The Internet is the first place everyone will go when the phone lines go down whatever, the 4G of a local mast on a leased line is going to be chicken feed compared to everyone trying to Wifi-call, Zoom-call, Whatsapp-call, etc. etc. etc.
Been on 4G only for several years now. Never had a problem. Fastest speeds, more than enough data, and never lost signal. If I do, literal SIM-switch and I'm on another network entirely on entirely different masts.
We're talking home DSL... there's no emergency requirement, there's no power-loss requirement, there's no must-work-in-a-hurricane requirement. For all those things, DSL suffers just as much as 4G.
The vast, vast majority of people wouldn't care that they're using 4G or DSL, is my point. They don't already, and most of them have it on their phones. They don't care if it's Wifi or 4G, it works just the same to them.
The requirements in an emergency are vastly different, and I'll stick to my dual-SIM phone and 4G with an emergency backup of "Can I borrow your wifi?" if the situation ever desperately calls for it.
P.S. most people don't need/use/understand static IP, but I VPN into something that gives me one if I should need it. Which also works from my phone. Stop running services from 4G or DSL though, to be honest. Weirdly my static IP works whoever's connection (Wifi, cabled or 4G) I'm using, and is backed by a computer in an always-on datacenter with redundant backups, which is the true intention of a static IP. So I could pop down the local cafe and do anything that I needed with my static IP, or go abroad and still use it (e.g. for iPlayer), dial into it for VoIP, etc. and it wouldn't have gone off anyway.
"(certainly I don't know of any obligation on BT to power your DSL in an emergency, only phone lines for 999 calls)."
I'm not sure whether that's not an obligation any more, or whether they are just ignoring it - but I do know that BT are now fitting FTTP to domesic properties with no battery backup at all...
Over here in France, not only is their no obligation to provide any guaranteed access to emergency services via VoIP lines, the average DSL box takes several minutes to boot up (should the power be interrupted).
And, guess what, they want to get rid of all of the traditional phones and push everything through VoIP.
Get used to it. It's the only way to switch to a fiber network. You can still use a UPS or even a power bank to keep the DSL modem up if the cabinet is still powered - but it may be not. GPON OLTs may have better chances to have emergency power since they are better grouped, just like mobile phone masts.
Their fibre lines actual have both a fibre optic line and a secondary traditional phone line on the same cable run. This allows them to remove the need for a battery backup for the fibre.
Unfortunately I only have a cordless phone plumbed into it so in a power outage I'd still be mildly screwed (unless I attached the 1981 push button phone that still works on the line).
ATT did this in the States a number of years ago after they too were 'broken up'. Last mile is yours (ie. a reseller) but you can't get anywhere without their backbone.
It was cheaper to use a reseller but if there was an 'issue' that concerned ATT's backbone, they didn't need to respond for up to 24 hours. So for a bit more (~20% more) you could just go with ATT front to back and have instant repair service.
So much wrong with this obvious bovine excrement.
End customers never report to OR, you report to your own provider, so will never get a bill from OR
OR will charge the provider if the problem is beyond the socket, nothing about going on premises or not.
The provider can choose to absorb any OR charges if they wish, eg if it is a supplier provided modem issue.
If you do wish to troll, maybe try something at least remotely plausible.
I had a line providing voice and ADSL2+. After some very heavy rain, the internet worked but the phone was just noise - not even a dial tone.
Put in a support request to my ISP and was told Openreach would be out in three days (standard "service" for a domestic fault at the time). I was advised to make sure there was a fault, as I would be charged for a "no fault found" call out (i.e., the charge would be passed to me).
I was certain there was a fault as I had tried a wired phone plugged into the socket inside of the master socket. However, I was concerned that the fault was caused by water ingress and it would have "gone away" by the time OR called in three days.
The OR engineer turned up for the appointment (on time, as has always been my experience), and, as expected, the fault had cleared. He was not happy that this would result in me being charged (he agreed there must be water ingress somewhere that was causing the problem), so he swapped me to a new cable pair so he could record that repairs were made.
My experience with the OR engineers round here has been very good, even when the experience of the OR hardware has not!
OR engineers are very good, it's the management that is faulty. It's now reached the stage that when OR engineers come over on the ferry (2 hour journey each way) to fix a fault they enquire whether anyone else is having problems and will happily try to help. Their management don't like this because "the paperwork is all wrong"
As an Ex OR engineer we were instructed to record a TRC (Time related charges) to the CP (usually passed on to the poor old subscriber, sorry End User.
Water in the NTE? (socket), customer fault, issue a TRC. Even though the water was seeping into the overhead dropwire (line) and running into the NTE.
Every month we gathered at Trafford (Manchester) exchange on a Friday afternoon. Many of my shameless colleagues (you know who you are) with BT provided bacon butty and a cup of tea grasped in your money grubbing hands would be waiting for the big result of the month.
Yes Dale Winton (for that is not his name) open the envelope!!!
The baldy shit head manager opened the golden envelope (well more BT/GPO buff coloured) to announce the "Field Engineer" with the highest TRC's (Time related corruption) award! The envelope contained £50 in used bank notes.
I never won the £50 bounty..... In fact I was dragged into the managers office to explain why I hadn't booked a single TRC.
I can sleep at night knowing I would never rip my customers off. To the cretins at OR that think it's remotely clever to fabricate TRC's I hope your rabbit dies and you can't sell the hutch!
Oh and any OR management want to challenge me on the accuracy of this post, just ask, I still have a memo inviting me to the TRC draw.
Toodle Pip!
Last year we had a line cut at work (gardeners, hedge trimmer, very tall hedge). We were paying the extra £3 or whatever it is per month for high priority response to faults so two OpenReach vans arrived within a couple of hours of reporting it to our service provider and three cut lines plus an additional fault on another line were fixed on the same working day as the report. We did get charged (not OpenReach's fault after all), but it was only £117 plus VAT for two engineers for a couple of hours
I've always had excellent experiences when dealing with the OpenReach engineers. It helps if you use the right words (the thing from the pole to your building is a 'drop wire' or 'drop', not a cable and you're connected to a 'pair', not to a line). Although you can never be quite sure what will happen if OpenReach subcontracts the job to Quinn or Kelly.
Wireless Broadband companies rent antenna space on farmer's barns in return for free Internet. There are lots of companies with Fibre, they just have to battle BT and BT's governmental bribes. This is actually a good thing, it will rally the forces opposed to BT and create better services from the competition.
You forgot the business rates issue that's designed to make building your own backhaul "uncompetitive". Basically any infrastructure you have will attract business rates that (AIUI) are calculated somewhat differently to how BT's are. At a previous job, we had customer affected by this as the altnet's supplying a number of our customers simply shut down those bits of the network rather than pay the massive hike in business rates.
"'alternative' ISPs who are building their own FTTP networks currently have no choice but to use the former state monopoly's network infrastructure for backhaul"
This is not true. You can lease dark fibre right into LINX using the likes of ZAYO who have a comprehensive backbone covering most of the country.
The proposals strengthen the case for small providers using this sort of option.
"...This is not true. You can lease dark fibre right into LINX using the likes of ZAYO who have a comprehensive backbone covering most of the country...."
Well you obviously don't get out much! Once you move outside the main metro locations / business parks then Openreach / BT pretty much are the only option, and rural areas are where the AltNets have been making a real mark, helped by BT's absurd internal cost allocation and structure which purport to show that doing any real work spirals into stratospheric amounts of money - until, of course, an upstart, more efficient operator starts to lay serious local fibre whereupon BT Openreach will like magic revise their plans and overbuild like crazy.
Having tendered several >100 location UK networks there are indeed multiple providers who can cover the metro areas - but when you actually look under the covers they all sub to Openreach for the more "interesting" sites. I do have some sympathy for OR in that some of the regulation is wierdly weighted against them - for example I can see no good reason why duct-and-pole access rights shouldn't also apply to Virgin Media, Kcom, Vodafone/C&W etc. - but this surcharge seems blatently anti-competitive in an area where the notion that Openreach don't have Significant Market Power is just nonsense. I really hope the CMA fry them for breakfast.
Not sure of your argument here, you say there is pretty much no choice then mention some who have been making a difference, I get out enough to work with an AltNet laying Fibre in a rural area and BT have done nothing in response.
My point was that there is an alternative option, not that other suppliers were necessarily using it. However, if they get squeezed more they may start to reconsider this option.
The price rises promote additional competition into the market as now there is more margin to be had against the baseline that is OpenReach.
This SHOULD encourage innovation and competitiveness where OpenReach clearly and obviously dominates.
If OR are abusing their position then virgin, sky, sse, city fibre, talk talk etc etc are all welcome to step up and offer an alternative especially as there is now more meat on the bone for them to do so.
OFCOM should just had let OR charge a little bit more and flooded the nation with fibre instead of wanting to promote market competition which will just leave us with a bunch of failed altnets with questionable infrastructure and patchy coverage just like what happened with cable tv before they all merged into Virgin Media.
It's not that simple and the thieving scum at Openretch are not completely stupid.
It costs money to flood the nation with fibre: installing ducts, negotiating wayleaves, getting permission to dig up the street, legal costs, rates, arranging backhaul, etc, etc. Openretch will put up their price to just below what those costs would be for someone else - so it's cheaper to buy from them than build/run your own.
When Openretch/BT put up their prices, what do you think the likes of TalkTalk and Virgin will do? They'll put up their prices to match and rake in all that free money in extra profit. Better customer service? Cheaper prices? GB/s to the home? Fuck that! There's money to be made!
BTW, how is "a bunch of failed altnets with questionable infrastructure and patchy coverage" any different to what on offer right now? That's a reasonably fair description of the networks at Virgin, Talk Talk, etc.
We have Hyperoptic in the apartment building where I live. they are excellent.
There is a half rack of kit in the underground car park and Cat5 out to each apartment.
I believe they use Openrach for FTTP - so what is this price hike going to mean for Hyperoptic customers? I guess we will end up paying more.
This post has been deleted by its author
Leased lines generally offer symmetric speeds. It's mainly marketing* that dictates differential speeds once you get onto fibre. For xDSL there are technical reasons - as in, you have to split the available spectrum of signals into upstream and downstream, and the split is set to suit "typical users". With ADSL2, you can get Annex M which trade off downstream (less of it) for upstream (more of it) and we've used that for some customers where it's made sense for their usage patterns.
* Mainly, marketing says that only people running business services need symmetry, and they will pay more can be fleeced for more for a "business" product.
I work for a charity with a number of locations scattered around Wales. Every time we looked in to getting better connectivity than ADSL we were told that Leased Line was our only choice, the only supplier was Openreach via a reseller and you were looking at a five figure installation charge (to pull fibre 16km) and a few grand a month to provide the service.
Then, as the Openreach FTTP service gets rolled out, we suddenly find we can get a 300/30 service for 1/10th the cost, so we do, and so do a lot of other leased line customers. I'm assuming these lost customer incomes are hurting Openreach badly
And there you demonstrate exactly why, for decades, BT has done all it can to block progress.
When ISDN came along, they crippled certain features (that were standard in other countries such as Germany) so as not to damage their cash cow leased lines business.
When ADSL came along, they did all they could to cripple it so as to not damage their cash cow leased lines business.
Now, through their independent subsidiary sock puppet OpenRetch they are doing all they can to nobble competition.
It's ingrained into the BT culture. maybe not at the lower levels where there are some very good people - but when it comes to business policies, it's always been policy to do all you can to nobble any competition.
Good old BT, clinging to the Public Finance Private Profit business model.
I have lived here in this house in rural shetland for a decade without a landline. The only alternative is one provider and 3G. I would rather suffer that than pay BT, but I do get pissed off when I here the we cover 95% of the UK mantra. Yes, but not this 5%.
Last time I looked the customers of BT's FTTP/B products were likes of Hyperoptic (Oh, yes, "full fibre all the way" - mostly from BT - and then Cat6 inside the Multi-Dwelling Unit) and also Mobile network operators such as Vodafone for their backhaul. These operators will likely squeal like crazy - while hoping to get alternative solutions from other operators such as Virgin Media Business?
What people need to realise is that BT & OpenRetch have a natural advantage of having the infrastructure already in place. Yes, they have built a lot of it themselves, keep extending it, etc - but they have the core network in place and that gives them a massive advantage. Any new development is going to be somewhere near exiting infrastructure - so the cost of connecting it up is only going to be incremental to what's already in place.
For anyone else, to provide the whole backhaul, they have to provide the whole backhaul. AFAIK there is no-one* anywhere near here with any infrastructure at all - so if I wanted to get a circuit that wasn't provided by OpenRetch then someone would have to build (rough guess) something in the order of 30-40 miles of infrastructure to get to the nearest point where anyone else has anything. So I'm not going to be buying anything that needs that, not when the cost of laying new ducting is priced in the order of four digits per 100m (last price I saw from BT was many years ago, and was £1000/100m, or £10k/km). So the infrastructure isn't going to get built, so it's not there to sell to others - and the vicious circle continues. You could rent duct space from openRetch - but then you are still paying rent to them, and who knows what excuse they will come up with in the future for charges for "the wrong kind of usage" ?
If you look at the altnets building their own networks, they generally start from a hub where it's cost effective, and slowly build outwards. It's massively expensive, even if like B4RN you largely rely on volunteers and generous land owners. So it tends to go very slowly, and only to areas where it's cost effective. Anywhere outside one of these patches is going to be near enough reliant on OpenRetch.
* technically that's not quite correct. In the town where I work, aprt of it does have ducting that was installed by Norweb (remember them ?) - but it only covers a small area of the town and was put in as an old ironworks was being redeveloped into a business area. That's been de-commissioned by Vodamoan who now own it, presumably because it's such a small patch of odd-ball infrastructure that they don't want the hassle. And there's also a network owned/run by Global Crossing, which used to be BR Telecoms - yes there's a fibre network running along the railways. But that suffers from the same problem as the network run along the electricity grid - if you aren't right next to the network, then it's prohibitively expensive to get connected to it, and agin, it's too "not our core network" for most operators to bother using it.
The Register 
Biting the hand that feeds IT
Copyright. All rights reserved © 1998–2024
