Several smaller ISPs have told ISPreview.co.uk that they feel discouraged from adopting BTOpenreach's new generation of superfast fibre optic broadband ( FTTP ) services because the current Transition Pricing, which applies until such time as Fibre Voice Access (FVA) becomes available (this allows voice calls to be made over the fibre optic line), appears to put them at a competitive disadvantage .According to Aquiss UK, ISP's will get a rebate discount (worth roughly £9 +vat a month) if BT's Fibre-to-the-Premises (FTTP) and Wholesale Line Rental (phone line) are taken from the same supplier (i.e. bundled). On the surface that sounds like a good deal, unless you happen to be an ISP that doesn't offer BT's WLR and thus have to charge significantly more.
Martin Pitt, MD of Aquiss, said:
"We have been arguing this point for quite a number of days now. A whole host of problems appear. We can see this causing a possible 2 tier pricing structure, favouring the main market players. Many ISPs, vISPs or Channel Partners will have no WLR product in their portfolio, but they will also have customers who have established, in some cases long-term WLR (phone) contracts, in place. This means an extra cost where solutions are split.
Personally I only see this helping BT Group companies where the natural percentage of the UK population will have a BT phone line so the rebate will favour their retail models. This also forces ISPs back to BT, reducing choice long term."
"We have been arguing this point for quite a number of days now. A whole host of problems appear. We can see this causing a possible 2 tier pricing structure, favouring the main market players. Many ISPs, vISPs or Channel Partners will have no WLR product in their portfolio, but they will also have customers who have established, in some cases long-term WLR (phone) contracts, in place. This means an extra cost where solutions are split.
Personally I only see this helping BT Group companies where the natural percentage of the UK population will have a BT phone line so the rebate will favour their retail models. This also forces ISPs back to BT, reducing choice long term."
Pitt's comments have been echoed to us by other providers, some of which could be delaying the launch of their own FTTP services until Fibre Voice Access (FVA) becomes available or coverage improves. But ISPs appear to be split on the issue.
Entanet, which supplies a number of UK broadband providers, suggests that BT might not have much of a choice because otherwise, in the face of mounting competition, they'd risk losing their line rental business and future telephony revenue.
Darren Farnden, Entanet's Head of Marketing, explained:
"It's easy to see why a sceptic might suggest that BT is making combined line rental and FTTP orders cheaper/more economically sensible than just an FTTP order so that they can ensure they don't lose their voice customers before they're able to offer FVA (Fibre Voice Access, essentially calls over the fibre connection but which doesn't yet commercially exist and has faced numerous delays already).
By not making such an offer, they risk losing the line rental business and hence future telephony revenue. Making the data-only FTTP connection more expensive might be seen as a deterrent to prevent this. Technically, BT will be exercising equivalence across the board because arguably everyone has the opportunity to take broadband etc from companies other than BT, even if not every provider/reseller.
BT definitely gains an advantage because, as the incumbent, they have a massive base of PSTN customers that they can capitalise on. Resellers need to put themselves in a position where they can bundle the PSTN rental with a fibre rental and provide calls and broadband; OR they provide the fibre broadband and overlay VoIP as the telephone service. This means carefully choosing a voice and data communications provider that gives them these options."
"It's easy to see why a sceptic might suggest that BT is making combined line rental and FTTP orders cheaper/more economically sensible than just an FTTP order so that they can ensure they don't lose their voice customers before they're able to offer FVA (Fibre Voice Access, essentially calls over the fibre connection but which doesn't yet commercially exist and has faced numerous delays already).
By not making such an offer, they risk losing the line rental business and hence future telephony revenue. Making the data-only FTTP connection more expensive might be seen as a deterrent to prevent this. Technically, BT will be exercising equivalence across the board because arguably everyone has the opportunity to take broadband etc from companies other than BT, even if not every provider/reseller.
BT definitely gains an advantage because, as the incumbent, they have a massive base of PSTN customers that they can capitalise on. Resellers need to put themselves in a position where they can bundle the PSTN rental with a fibre rental and provide calls and broadband; OR they provide the fibre broadband and overlay VoIP as the telephone service. This means carefully choosing a voice and data communications provider that gives them these options."
Ultimately most agree that the situation should resolve itself once FVA surfaces over the next few months. On top of that FTTP is currently only available to a tiny proportion of the UK, which won't change until spring 2013 when FTTP on Demand surfaces. As a result any negative impact from BT's transitional FTTP pricing shouldn't last for too long. We are currently awaiting a reply from BT.
A potentially more significant problem is the price of FVA itself (details), which is set to cost £183.48 +vat per year (£15.29 a month) and that's before any call deals or profit margins have even been added. It's little wonder that so many consumers are going mobile-only for voice calls.
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Comments: 15
cyberdoylePosted: 14 February, 2012 - 7:17 AM
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If 4G was available now, my guess is the majority of landline customers would go totally mobile. BT are just protecting their copper assets. aided and abetted by the government and a toothless regulator.
A decent connection with fibre could support a multitude of phone numbers with no need for any copper phone line. No wonder they don't want anyone to have one.
FibreFredPosted: 14 February, 2012 - 7:45 AM
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cyberdoyle did you read the article this is about FTTP, nothing to do with copper or copper assets
SomersetPosted: 14 February, 2012 - 8:05 AM
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cd- This 4G comment is your latest soundbite with no evidence and unrelated to the subject of the article.
MarkJPosted: 14 February, 2012 - 8:10 AM
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In fairness BT's Wholesale Line Rental product, which is a core part of the article, is a copper based service (i.e. Transition Pricing for use of copper voice lines until FVA arrives).
SledgehammerPosted: 14 February, 2012 - 8:33 AM
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I am just waiting for the next increase in line rental which is likely to happen early next year.
That will put the cat amongst the pidgeons.
MrSaffronPosted: 14 February, 2012 - 9:04 AM
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Why oh why, do we want faster and cheaper, but never understand that the end result will be worse service.
NikeyPosted: 14 February, 2012 - 9:11 AM
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Except nobody is talking about cheaper, it's all getting more expensive and that's the problem with line rental. The price goes up but fewer and fewer use their fixed line for voice calls anymore.
FibreFredPosted: 14 February, 2012 - 11:19 AM
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Fair enough Mark. But to suggest that BT want people to remain on copper doesn't add up for me.
Why create a new product you want no-one to use? I would have thought BT wanted as much copper out of the network as possible to:-
A) Sell, copper is worth money as we all know
B) To try to reduce copper theft
Although B is unlikely to happen as those who steal it won't be selective and we'll no doubt find many fibre breaks in the future whilst these people rip out whatever they can.
DeductionPosted: 14 February, 2012 - 3:21 PM
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quote"Why oh why, do we want faster and cheaper, but never understand that the end result will be worse service."
Why oh why as an ISPA judge using that logic do you and your colleagues have a history of giving cheap providers awards?
SledgehammerPosted: 14 February, 2012 - 6:03 PM
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@ FibreFred
Anyone on FTTC is still using copper for the final leg. Everybody on FTTC will still have this copper element for at least the next 20 years if not longer.
As Cyberdoyle points out about 4G, it could cause BT severe headaches if a great number switch to mobile for their phone service or both phone and Internet.
FibreFredPosted: 14 February, 2012 - 6:35 PM
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I know that sledge, I'm talking about FTTP which is what the article is referring to.
4G has its place but its not the future for high speed internet access.
DeductionPosted: 14 February, 2012 - 6:48 PM
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4G is easily capable of the 80-300Mb FTTC and FTTP will run at.
Sledgehammer is entirely right the final mile for many will be copper for years to come. The FTTP "on demand" product wont be an option for many as install costs are likely to be beyond what many will pay, or worse they wont be able to have it (especially rurals) where there is no duct running to the poles.
If it were that easy they wouldnt be bothering with FTTC at all and all future deployments would be the "on demand" product automatically with a lucky few (still only around 2%) getting the top end FTTP GEA based solution rather than the GPON FTTP "on demand" variant.
Copper is here to stay for many for atleast another 10 years probably more 20-30 and probably just as BT planned. Not saying thats a bad thing, its a smart business move but morally and for the end user it sucks balls.
FibreFredPosted: 14 February, 2012 - 7:13 PM
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Like I say 4g has it's place and it is still in early trials in the UK. I cant see it delivering those speeds in real world deployments concurrently or being consistent enough for iptv etc but we'll see the more options the better to be honest
CYMRUPosted: 14 February, 2012 - 9:09 PM
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The current mobile and its broadband is doing very well in my neck of the woods, BT appear not interested. Up to last year there were 5476 residential customers on the exchange that leaves 14000 households who could be on the exchange with no telephone or broadband, according to BT or perhaps they all moved to Scandinavia!
DeductionPosted: 15 February, 2012 - 1:50 AM
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quote"Like I say 4g has it's place and it is still in early trials in the UK. I cant see it delivering those speeds in real world deployments concurrently or being consistent enough for iptv etc but we'll see the more options the better to be honest"
It already does in certain areas of the globe. It can also easily deal with IPTV, online gaming etc typical pings are not really any greater than you get with a fixed line connection. Any connection be it mobile, cable or BT lines can be subject to congestion etc. Quite often that comes down to things unrelated to the tech being used and how its managed.
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