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BT Accuses ISP TalkTalk of Clinging to a Copper Broadband Raft

Wednesday, January 16th, 2013 (10:06 am) - Score 2,190

BT has warned Dido Harding, the boss of its arch rival TalkTalk, that her ISP is in danger of being “remembered as broadband luddites clinging to a copper raft in a sea of fibre” after Harding criticised the lack of competition and regulation in the United Kingdom’s emerging market for fibre optic based superfast broadband (FTTC/P) services.

According to The Telegraph, Harding yesterday told a conference in London that Ofcom, the UK communications regulator, needed to weaken BT’s grip over superfast broadband in order to make it just as competitive as the current unbundled local loop (LLU) market for copper based broadband ADSL2+ (up to 20/24Mbps) services.

Dido Harding, TalkTalks CEO, said:

92% of all [superfast broadband] connections go to one provider. Factually, today, our superfast market is significantly less competitive than our copper market and that should be a real worry.

Today, I and [Sky Broadband] and every small reseller of broadband has no idea whether we are paying the right price for superfast broadband connectivity because there is no regulator, no referee on the pitch.”

We assume the 92% figure mentioned above is referring to FTTC/P services delivered over BTWholesale’s platform, which is indeed largely dominated by BT Retail, as otherwise it seems to ignore customers on Virgin Media’s separate cable service and those of independent FTTH / FTTP or FTTC offering ISPs (e.g. KC, CityFibre etc.).

At present the dominant form of superfast broadband on BT’s national UK network is Fibre-to-the-Cabinet (FTTC), which at best only offers a more restrictive form of virtual LLU known as Virtual Unbundled Local Access. Sadly VULA doesn’t provide the same level of price or flexibility control as a full LLU service, which is technically difficult to achieve on fibre, although both the EU and UK governments have so far given it their support.

Harding wants Ofcom to introduce better regulation within the next 5 years and indeed the regulator has already begun to look at potential solutions, which could in the longer term include measures such as wavelength unbundling on true fibre optic lines. But so far no firm plan beyond VULA has been established and ISPs, most of which have little choice but to use BT’s existing infrastructure, often cry out for greater flexibility to help differentiate their products.

Naturally BT frequently counters that its FTTC/P products are offered on a “level playing field” to all ISPs and that those who complain could always build a rival infrastructure. In reality few ISPs, if any, would have even remotely enough money to deliver a truly national alternative to BT and those that try often suffer problems (e.g. Fujitsu UK, Digital Region etc.).

Similarly TalkTalk, which has so far seen fairly low uptake of its own BT based superfast broadband packages, could perhaps put more effort into both advertising and revamping its packages instead of just offering the FTTC service as part of a “boost“, which can confuse new customers.

Never the less the calls for more fibre competition are continuing to grow and so too is the frustration with Ofcom’s seemingly glacial pace towards change.

Leave a Comment
14 Responses
  1. Avatar Phil says:

    Never mind this BT, get your act out and named next phase exchange lists for FTTC, last one was last September 2012. Expecting anytime this month !

    1. Mark Jackson Mark Jackson says:

      I have been asking BT about this recently as we too expect one anytime now, although they haven’t responded. I’ll give them a prod.

    2. Avatar Ignitionnet says:

      This has been done Phil, the spreadsheets on the ‘Where and When’ section of the Openreach website have been updated.

  2. Avatar Phil says:

    I don’t expect BT to named exchange lists probably March now (delaying for some reason ???)

  3. Avatar FibreFred says:

    But unless someone else builds their own ducts and fibre, how they can truly compete? As they’ll always be paying BT for something

    1. Avatar PhilT says:

      Water, gas and electricity utilities potentially have ducts or poles and could enter the market as a provider of physical access – an electric utility could provide both power and backhaul to a street cabinet for example. Perhaps even going back to the fibre on the grid pylons (I remember Energis dial-up access that worked this way).

    2. Avatar FibreFred says:

      Yes Phil that would be great, we just need to convince them they can make revenue that way, I think it has been tried out with sewers but that didn’t go anywhere

  4. Avatar 4hk5 says:

    The problem with sewers/water etc is what happens when there is a problem with the said pipes having to be dug up/cleaned out/repaired/replaced – whatever.
    At the moment is it “simple”
    Having a fibre connection running though them makes the job very much more difficult indeed if not impossible without the fibre being disconnected at either end and then re-threaded once the repair is done along with the loss of service that would result.
    One can see the water’s companies reluctance to get involved with this idea….

  5. “Today, I and [Sky Broadband] and every small reseller of broadband”

    Do we REALLY think that TalkTalk care a monkeys about small resellers?

    TalkTalk are a massive company now and really have no excuse for not putting their own money where their (big) mouth is. They should stop moaning about BT and start digging their own fibre if they really are that concerned!

  6. Avatar dragoneast says:

    I suppose that from TT’s perspective, their business model relies entirely on undercutting the opposition on price, and they haven’t so much scope to do that with FTTC, and that’s the rub. Their model suits most consumers obsession with cheap to the exclusion of everything else. It has one slight disadvantage – where does the money come from for the necessary investment in FTTx (or for altnets, for that matter)? Haven’t we had the problem with gas and electricity – an obsession with the cheapest consumer price leads to an investment drought and now the investment chickens are coming home to roost, the consumer pays (as always)? I don’t think the C21 has yet solved the eternal problem of how to have your cake and eat it.

    1. Avatar FibreFred says:

      Correct, the investment drought has hit the energy suppliers, we are all (like it or not) going to have to fund a huge upgrade to the energy network through increased prices.

      But pay more for broadband to fund an country wide upgrade? Good heavens no….

  7. Avatar DTMark says:

    For once I have nothing to add to the article, since I’ve said it already and have been saying same for a year or so now.

    In the future the only ISPs will be Virgin, BT, Sky and Talk Talk.

    Thanks, BDUK.

  8. Avatar Matt says:

    Talktalk should be told to get on their bike, or at least put their money where their mouth is.

    Whilst I agree in areas that have been built using BDUK or various other schemes that involve public money should be regulated most areas were installed By BT using their OWN money should not.

    They are quite entitled to make a return on their investment as that’s how business works. BT after all only exist to make profit, in fact as a publicly listed company they are REQUIRED to do what’s best for their shareholders

    The government made it this way when they sold off our national infrastructure to a private company. (Which personally I think was the stupidest idea anyone’s ever thought of due to the critical nature of it but there we go…)

    Telecoms kit isn’t cheap and it takes years to pay back the costs of putting it in, infact sometimes it’s obsolete before it’s paid for itself. If ofcom keep forcing them to give it away to the competition for peanuts where exactly is the incentive to invest come the next round of upgrades?

    1. Avatar DTMark says:

      This is surely very simple.

      To answer the point in the penultimate paragraph of the article, Talk Talk don’t really want to sell FTTC services.

      That’s why it’s a low-key marketing effort as a “boost package” or similar.

      They are balancing the desire for market share (or not) against the profit to be made and would prefer to sell ADSL LLU solutions, an assertion backed up by another (smaller) ISP on here previously.

      The outcome of the BDUK model is a long way from correctly motivating the players.

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