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Ofcom Moot FREE Broadband Ceases for BT Lines in UK Rural Areas

Monday, January 27th, 2014 (12:08 pm) - Score 1,261
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The communications regulator has today posted a further consultation for its on-going review into the UK’s Wholesale Broadband Access (WBA) market, which among other things examines the impact of BT’s FTTC/P deployment in rural areas and also proposes free cease charges.

Ofcom currently classifies different areas of the country based upon the amount of competition from primary ISPs (e.g. BT, TalkTalk, Sky Broadband, Virgin Media etc.) in any given area (i.e. Market 1, Market 2, Market 3 and Hull). In short, Market 3 areas are home to several ISPs and thus have the lowest prices due to de-regulation and competition; while Market 1 is the opposite and services are often only available from BT (i.e. Market 1 currently equates to the last 11.7% of premises in predominantly rural areas).

But the markets have changed since the original review (2010), which is largely due to the expansion of unbundled (LLU) copper broadband services. Local Loop Unbundling is the process that allows ISPs like TalkTalk and Sky Broadband to gain more control of broadband and phone lines by installing their own equipment inside BT’s exchanges. As a result Ofcom last year prosed to consider changing their definition to the following (here):

Market A
Where there are only one or two potential significant wholesale broadband providers present or forecast to be present, which accounts for 9.6% of UK premises.

Market B
In which we believe there is effective competition, accounting for 89.7% of premises (exchange areas where there are three or more primary ISPs present or forecast to be present).

Hull Area
Covers 0.7% of UK premises, where KCOM (KC) is the only significant provider.

In other words, Market A (mostly rural areas) lacks the necessary level of competition and would thus remain subject to Ofcom’s price controls and cost accounting obligations on BT. At the time the regulator also proposed that cease charges (i.e. when you cancel the broadband line rather than use a direct migration) for only BT’s IPstream Connect Max and Max Premium (up to 8Mbps ADSL) broadband products should be set to £0. But today’s proposals said that this should now be extended “to cover all cease charges in Market A“.

BT currently charges for cessations from other variants of IPstream within the existing Market 1 (for example IPstream Connect Home and IPstream Connect Office cessations are £5.41) and WBC cessations are also £5.41, which is often passed on by ISPs to consumers. So the news that they’ll all be set to £0 under the new Market A is welcome, although the impact of this is debatable given that some ISPs still charge a set cease fee no matter where you live.

Market Definitions and Fibre (FTTx) Coverage

At the time Ofcom also chose not to factor in the roll-out of superfast fibre optic based broadband services (FTTC/P) to its Market Definitions, either on a state-funded (Broadband Delivery UK) or commercially-funded basis, because they were “unable to take account of that roll-out in our market analysis, as we did not know where or when the roll-out would take place“.

But since then EE has claimed that many proposed Market A exchanges could be moved to Market B because “BT [are] likely to face strong competition in the supply of WBA services in those (Market A) exchanges as a result of fibre roll-out“. EE further suggested that, where 40% or more of premises within a Market A exchange area are capable of being served by state-funded fibre by 2017, then the exchange should be regarded as “prospectively competitive” and moved to Market B.

The heavily redacted information provided to Ofcom by BT in October 2013 shows that fibre connected to Market B (i.e. prospectively competitive) exchanges is likely to reach between 50% and 70% of Market A premises by the end of the next market review period (i.e. around 2017), with around two thirds of these “being in Market A exchange areas in which BT is currently the only [Primary Operator]“.

Ofcom noted that FTTC in particular would require its model to focus more on street cabinets rather than telephone exchanges for coverage, although it ultimately felt that no change was necessary yet because “only 200-300 out of 3,223 exchanges in Market A have one or more fibre-enabled cabinets as of October 2013” and they “serve only 10 to 15% of Market A premises” (note: there are around 90,000 cabinets in the UK). But it has promised to look at the issue again in the future, most likely after BDUK has had a bit longer to run.

A full run down of all the latest WBA market review changes can be found here and the consultation will remain open until 10th March 2014.

NOTE: The regulators proposals to deregulate 90% (roughly) of the UK relate to the broadband services provided by BTWholesale.

Leave a Comment
28 Responses
  1. Avatar GNewton says:

    I think the BT/Ofcom cartel is barking up the wrong tree. The whole LLU situation is in a mess, so is the wasted BDUK. Many areas have some fibre deployments, yet at the same time keep an old parallel copper infrastructure, too. REPLACE, not add fibre, to the local loops, and improve fibre local loop unbundling. Remember, BT is probably the largest copper mine in the country, its copper alone is worth Billions.

    1. Mark Jackson Mark Jackson says:

      Easy to say.. expensive to do (true fibre optic).

      Fibre LLU is a more technically complicated area though, both for FTTC and FTTP/H. The latter is largely irrelevant because FTTP/H isn’t big enough for Ofcom to consider wavelength unbundling and FTTC is very complex to do, although Ofcom have proposed modifications to VULA that might bring some limited improvements.

      I guess you can say a lot against ADSL/2+ but arguably unbundling those was more of a political/regulatory than technical challenge.

    2. Avatar Gadget says:

      and what do you do for those services that do not work over fibre (some burglar alarms and epos terminals for example)

    3. Avatar FibreFred says:

      @Gadget,

      No-one has the money to do it
      It will break some systems (as you say)
      And stop true LLU

      Don’t let things like that get in way of progress tho 😀

      Just keep chanting fibre fibre fibre fibre fibre!

    4. Avatar GNewton says:

      Isn’t GPON the main stumbing block to local loop unbundling of fibre lines?

      Anyway, fibre has been around ages (albeit not in the UK), so one would have expected a solution for fibre local loop unbubdling by now. Also, internet-connected alarm systems have been available for quite a while, too, in other countries.

      It’s just crazy to see the development of redundant duplicate access networks, with all the unused previous copper buried in the ground.

    5. Avatar FibreFred says:

      GPON is the norm (not just here) you won’t get physical unbundling of fibre it would probably be wavelengths.

    6. Avatar FibreFred says:

      … and fibre has been available in the UK for many many years

    7. Avatar MikeW says:

      One thing you can absolutely guarantee, as BT put fibre in place in the local loop, is this: copper will physically remain in parallel for a long period.

      Things like LLU, alarms, redcare, regulation, etc have all been mentioned, reasonably, but can be dealt with. Training is an issue, and can only ramp up at a set speed – so it too will take years.

      However, the one issue that BT has been ultra-conservative over, and will remain so, is voice access to emergency services. It just must not fail, at any cost.

      Reliability of the fibre equipment for voice service is currently less well known, as is the acceptability of the battery-backup provision. These will take time to bed in, but the conservative background means it will be a long, long period before it is trusted.

      [Example: The 21CN rollout was meant to replace the voice exchanges, as well as being a rollout of ADSL2+. That process was stopped because the equipment proved too unreliable. A national rollout project just abandoned… Ever seen that mentioned again?]

      As deployment of the actual fibre takes time, and making appointments to hook people in takes time, you can be sure that ripping out copper in an area will *always* happen many months/years after the fibre there has been completely installed, reliability proven, and trust established. You will never be able to remove copper first, or do the work at the same time. Never.

      In fact, the existing copper is a backup safety net, in case things go wrong with the fibre deployment. Ripping it out would only happen when BT is absolutely certain of the robustness & reliability of the replacement.

      Which CEO of BT is going to approve removal of copper until the board is absolutely sure that the fibre replacement has worked, and is continuing to work? In fact, I reckon the one that signs the order to remove copper will prove to be at least 2 or 3 appointments later than the man who oversaw the final loop changing to fibre. I really think it will be that long.

      If there’s no work that can be done in parallel, no duct saving, no space saving and no time saving, then it doesn’t matter if the copper is removed 5 months later or 5 years. In fact, is there a reason to remove it at all?

      All this talk of the latest buzz-phrase “largest copper mine in the UK” thoroughly belittles the value of what it took to get the copper into the ground. There remains added value in its presence, even after fibre is carrying all the traffic.

      Save your breath for a different argument. This one just won’t happen.

    8. Avatar GNewton says:

      “There remains added value in its presence, even after fibre is carrying all the traffic.”

      Hardly. Copper is mostly obsolete for voice telephony services, and there are already plenty of internet-based alternative services for the other things like alarm systems etc. In fact, even BT owns a few fibre-onlt exchanges! Frankly, I don’t care if it wasn’t for the fact that £1.2 Billion of taxpayer’s money has been, or will be, wasted on the BDUK, to enrich BT with services it deemed commercially unviable for large parts of the UK.

    9. Avatar JNeuhoff says:

      “In fact, is there a reason to remove it at all?”

      http://www.infomine.com/investment/metal-prices/copper/5-year/

    10. Avatar NGA for all says:

      @MikeW – Agree with your comments but the debate could start with declaring a sunshine date – 20 years from now. USC to USO for Broadband could also be brought forward.

    11. Avatar MikeW says:

      @JNeuhoff
      Hardly. Second hand copper isn’t worth the full price, and it has to be extracted from the plastic first, and both have to be extracted from the ground. Which will cost £££ in turn. And there’s still the danger, at that time, of the work disrupting the then-current fibre network.

      I don’t doubt that there is some residual value in the copper metal itself. But it is only worth something when the value of leaving it in the ground has dropped to zero.

      But thanks to both of you for proving that you don’t understand the value of security, reliability and robustness. You’re too busy desperate to make a quick point to actually think things through.

      @NFA
      I could see value in doing something like that, though it would get tangled up in a discussion about local loop monopolisation. I think what we need is the concept of a national plan for the access network, but that would definitely trigger monopoly discussion.

      On the other hand, the Australians were at least keen to go through with establishing a national plan… Even if theirs might get changed significantly now, it still looks like a single NBN Co. will own it.

  2. Avatar John says:

    discrimination market by ofcom

  3. Avatar GNewton says:

    “and fibre has been available in the UK for many many years”

    Not when it comes to the local loops (we are talking here about broadband), only for backbones. Of course, these BT proponents know that only too well, they just bury the heads in the sand while their hard earned taxpayer’s money is wasted for the BDUK farce.

    1. Avatar FibreFred says:

      No not for backbones, local loops also… Ethernet/Leased lines, DWDM etc etc, been available for years.

      I know you are talking about consumer broadband but I just wanted to point out fibre has been in the UK for many years, not for the home consumer of course but there’s a reason for that which has been covered many times over on here, in fact most comments on here relate to the same topics over and over really.

      Why are we behind on consumer fibre
      Why are we wasting time on FTTC
      What is the plan not to waste public money on superfast
      ..
      ..
      ..

      There’s about ten core topics that just get discussed again and again no matter what the actual article is about 😐

      For me and I’ve said it before. I don’t think what is being delivered by BDUK is a farce (technically) just look at how many other countries are deploying FTTC around the world.

      But the BDUK process itself… a lot of wasted money on the framework and very badly managed.

  4. Avatar finaldest says:

    We now live in a country of CAN’T DO IT because its too DIFFICULT. BT are just full of excuses for why true fibre can’t be rolled out and the regulator is just as useless with endless red tape.

    If it were not for broadband I would rip the twisted copper pair out of the wall. Who uses expensive and unreliable land lines for voice calls anymore.

    As for emergency calls there is an invention called a “Mobile Phone” and its fantastic as it does not need copper wires to work and it works outside too.

    Time for this country to pull it’s socks up and get the job done.

    1. Avatar JNeuhoff says:

      “Time for this country to pull it’s socks up and get the job done.”

      Tell that these BT trolls 🙂

      Yes, this country has a pathetic ‘Can’t Do’ attitude, even big companies like BT can’t do without the BDUK, with £1.2 Billion of taxpayer’s money given to it!

    2. Avatar FibreFred says:

      Lets be clear here, its not too difficult, never has been. BT has been taking fibre to very remote parts of the country for years. Its not difficult, its not a technical issue

      Its cost

      Simple as that, cost vs returns which all businesses need to take into account or.. you go out of business. BT are a business not a charity.

      Have you convinced Ofcom that mobile phones are real substitute for emergency calls yet? Come back when you have.

    3. Avatar MikeW says:

      A century or two ago, the utilities in this country were paid for/invested in by a class of rich industrialist factory owners. They could see the eventual gain, particularly when fed back to their own business.

      Nowadays, the work is funded by bankers, who can’t see the benefit in long-term projects. Too many risks.

      The reason we have a can’t-do attitude is because the people who CAN do (industry) are governed by people who can’t (the ones with the money), all in an environment where the customers don’t pay enough.

      It is all in the money.

      @JNeuhoff
      Pot. Kettle.
      You’re probably the one person on here who has the biggest “can’t do” attitude around. Have you moved your business yet from its rural backwater into the 72% of Essex that already has superfast broadband? Why not? History is full of winners who go where the resources are.

      The right “can-do” businessman would have upped-sticks and gone, without bothering to moan on this forum. He wouldn’t be moaning about the county council, the district council, BT, or BDUK. He’d have just taken responsibility, and gone.

    4. Avatar JNeuhoff says:

      @MikeW: At the danger of repeating myself, there is indeed by and large a ‘Can’t do’ attitude. Local councils quite often included in this.

      We had local broadband in the past covering nearly a whole town well before the advent of DSL times, using a wireless mesh network technology, done by few engaged citizens who wouldn’t wait for BT or the council.

      Nowadays, without the shameful defeatist BDUK process more community and commercial intiatives would have sprung up, there is no need to waste taxpayer’s money, and no need to enrich greedy BT shareholders.

      BTW.: We haven’t used BT for ages. But I do post on this forum to engage in the public discussion, many users do for similar reasons. I know, it will upset a few users when they learn the truth about the true state of this country’s broadband.

    5. Avatar GNewton says:

      Doesn’t a Can-Do attitude at times involves campaigning and talking to telecom providers to offer better services? Merely moving away is more of a ‘Can’t do’ attitude, isn’t it?

      Either way, pooring in more taxpayer’s money into commercially unviable technologies like VDSL in many UK areas outside big towns isn’t the way forward!

    6. Avatar MikeW says:

      @GNewton
      I agree that a can’t-do attitude pervades this country. Hugely.

      But it doesn’t pervade the successful.

      A Can-do attitude can indeed be a part of campaigning. Indeed it is needed to succeed there, as campaigning will see many setbacks on the path. But the thing with campaigners is that they start without influence, and hope to gain influence as they argue their case. But they do have plenty of time. And hope that, in time, their view will prevail. A situation that is full of hope, and devoid of control.

      Being a successful businessman means getting to grips with adversity immediately. You don’t start a campaign, and hope that it turns out for the best at some indeterminate point in the future. In that regard, moving is taking direct control of your future. Failing to move is leaving your future outside your control, and hoping.

      Perfectly good post. Which you then spoil by choosing to add a bit of pointless campaigning on the end.

    7. Avatar FibreFred says:

      Mike I see that JNeuhoff didn’t answer you question re his business move 🙂

    8. Avatar FibreFred says:

      “But I do post on this forum to engage in the public discussion”

      I ran that through my gobbledygook translator and out popped:-

      “But I do post on this forum to bash BT at any given opportunity as they’ve never done me any favours”

    9. Avatar MikeW says:

      No answer indeed.

      Ironically, I was googling for some information on fixed wireless recently, and Google gave me an old thread on the forum here. In there, I happened to come across our old friend… it turns out he (or a namesake) was looking into getting a fixed wireless connection a while back (a good while back), but things were not going smoothly. I didn’t follow it through to see what happened though…

      I also see you use the same translator 😉

  5. Avatar NGA for all says:

    This contribution by Ofcom is a opportunity to request last minute changes to the 2014-2017 cost recovery regime. 1.10.11 holds out some olive branches for those pushing for additional changes, but only just.
    The detail on rural cabinets being served by Market 3 exchanges (handover points) is outlined and Ofcom are highlighting attempts by BT to shift cost recovery of IP stream from MKt 3 to 4.
    They are also refusing to accept the cost reconfiguration changes evident in BT’s 2013 accounts.
    Given Ofcom have to pick their battles very carefully this is a good read. The push by EU for BU LRIC (Bottom UP Long Run Incremental Cost) versus Ofcoms current acceptance of Bt’s copper network as efficient in cost terms is outlined and gives room for people to outline proposals to address the earlier discussion about Bermondsey (Fluidata) and customers served by ELO and suffering poor broadband.
    Their are some detailed comments on the states investment and its impact and how Ofcom will regulate as a consequence.

    1. Avatar Gadget says:

      Not sure what you mean by “cost recovery of IP stream from MKt 3 to 4.”

      I’ve always been under the impression that there are currently 3 Ofcom market categories (Plus Hull)and not 4.

      Dodgy keyboard perhaps?

    2. Avatar Gerarda says:

      If you look at the comments made by Think Broadband on this consulatiion you realise that Ofcom do not understand the technology on which they are basing their assessments

      It reminds me of a lot of business plans I see. 50 pages of pretty graphs and complicated calculations but a quick a look at the underlying assumptions tell me anything based on those is b*****ks

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