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Fixed Access Review Delay Triggers BT Openreach UK Line Rental Hike

Saturday, February 15th, 2014 (8:01 am) - Score 1,797
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BTOpenreach, which maintains BT’s national UK phone and broadband network, has said that it anticipates a “three month … delay” in the publication of Ofcom’s final statement of the Fixed Access Market Review(s) and the associated LLU and WLR charge control review. As a result they’ve decided to put some of their line rental prices up.

Ofcom had been expected to publish the outcome during the early part of Spring but in a statement Openreach said that it wanted to give ISPs “certainty on pricing during the period between the current charge control ending on 31st March 2014 and the new control starting” (currently expected to be 1st July 2014).

Openreach Statement

Openreach has made a voluntary commitment to Ofcom that, regardless of the three months anticipated delay, for WLR and LLU core rental products (WLR rental, MPF rental and SMPF rental) we will charge a weighted average price* for the 2014/15 year that is in consistent with the control(s) if they had started on 1 April 2014. All other WLR and LLU prices will be left unchanged between 1 April 2014 and 30 June 2014, after which the new control is expected to be in place.

In order to achieve this without being non-compliant with the price ceiling Ofcom will determine, Openreach is increasing the prices in advance of the control for any core rental product where Ofcom propose prices could increase in the future LLU and WLR charge controls.

In short, Openreach will increase the rental prices for their Wholesale Line Rental (WLR Basic Rental) and Fully Unbundled (LLU MPF Rental) lines. The WLR service will thus rise from £93.32 to £96.17 per year and LLU MPF lines will similarly see a big rise from £83.92 to £96.37.

However if Ofcom should decide on a slightly lower adjustment then Openreach has pledged to “calculate the excess revenue charged to each Communications Provider and apply a rebate to the August 2014 bill“. The above prices are expected to be introduced from 17th May 2014 and further details can be found here.

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By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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51 Responses
  1. Simon Lockhart says:

    Hang on… So MPF becomes more expensive that WLR3??? How do they justify that?

  2. Sledgehammer says:

    BT don’t have to justify any price increases they just have to get Ofcom to pass them.

    Line rental will continue to rise every year or if BT can get away more frequently.

  3. JNeuhoff says:

    Yet at the same time there are still many people out there who are perfectly happy with strenghtening the BT monopoly by giving 1.2 Billion of taxpayer’s money to it, via dubious schemes such as the BDUK. They’ll learn the hard way that BT is not a poor charity!

    1. Unknown101 says:

      Last time I checked government is investing £530m and BT investing in excess of £400m, don’t see any other company forking out that kind of money? Also the government is going to get a return on the investment so win win really.

      So when other prices for products rise around the country Openreach are not allowed to join in an rise prices with inflation? Pretty sure we in the UK have some of the cheapest PSTN and broadband prices in the world……

    2. No clue says:

      You need to check more it is indeed 1.2 Billion of tax payers hard earned…
      http://www.channelregister.co.uk/2013/12/18/dcms_super_switch_on_day/

    3. Unknown101 says:

      Yes….

      https://www.gov.uk/government/policies/transforming-uk-broadband

      £530m then another £200 odd the rest seems for improving mobile signal and providing wireless broadband options which Openreach haven’t got as this will probably go to the major mobile providers..

      Funny £1.2bn.

      Of which the government will get back the money on investment when it starts to make a profit…

      Love to see Fujitsu or Sky build out a national telecoms network to reach the length and breadth of the country.

    4. JNeuhoff says:

      “Of which the government will get back the money on investment when it starts to make a profit…”

      Please provide Links or sources! When and how will the £1.2 Billion be repaid to the public funding agencies?

    5. FibreFred says:

      JNeuhoff / Gnewton you keep ignoring what the government has already told you

      http://www.theregister.co.uk/2013/11/14/broadband_investment_good_for_economy_government_claims/

      “The government claimed today that a £1.2bn investment of taxpayer money in the deployment of fast broadband networks would return £20 for every £1 spent from the public purse.”

      Repaid.. in more than full

    6. No clue says:

      BDUK £530 million
      further £250 million
      DCMS RCBF extension = £20 million
      UBF = £150 million
      those are just off the top of my head and equates to around 1 billion on its own.

      The full amount is 1.2 billion, unless
      http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/telecoms/10448014/Government-claims-economic-boost-from-1.2bn-BT-rural-broadband-subsidy.html
      http://www.civilserviceworld.com/pac-report-accuses-dcms-of-1-2bn-rural-broadband-failure/
      and even more indisputble
      http://www.nao.org.uk/wp-content/uploads/2013/07/10177-001-Rural-Broadband_HC-535-ES.pdf
      is wrong

    7. No clue says:

      As to BT “repaying things” really when does that start then? In ten or more years time?

    8. Unknown101 says:

      Yes because the UBF definitely has to go to Openreach, anyone who applies for the grant can have any supplier provide them a broadband circuit so that isn’t directly going into BT’s pocket so you’re incorrect.

      The DCMS £20m extra is for after the BDUK roll out for infill that all ISP’s and alrnets can apply for so again not directly going into BT’s pocket so again you’re incorrect.

      Last time I checked they had only got £780m from government and forked out £400m themselves.

    9. Raindrops says:

      “Last time I checked government is investing £530m”
      “Last time I checked they had only got £780m from government”

      Well at least you are revising your “last checked” figures in the right direction. Still have no idea what you are talking about but a start.

    10. George says:

      Yes definitely 1.2 Billion lots of links out there to show that is the figure.

    11. JNeuhoff says:

      FibreFred/TheFacts/whatever: trolling again here?

  4. Ignitionnet says:

    Wishful thinking on the part of Openreach this one. The line rental is already too high given that they sweat the lines well past the lifetime implied in the line rental.

    If this came with a commitment to use the excess to begin a full copper loop replacement then cool. I for one have no use for the 6km of e-side I am stuck with.

    That said Ofcom force this copper obsession due to their own obsession with unbundled loops. Japan is a star in the broadband world and ISPs use a GEA type product.

    1. DTMark says:

      You say you have no use for it. But, do you subscribe to it, or are you lucky enough to have an alternative option e.g. 3G/4G/cable?

      If you subscribe to it, then BT don’t need to upgrade you commercially since you’re paying them anyway, one of millions of cash cows to be milked in perpetuity with poor quality services unfit for purpose.

      Price regulation and lack of competition guarantee this.

      Competition first, then get rid of OFCOM in its entirety, and leave BT to up the line rental to £500 a month if they choose to do so. As long as we get rid of the Crown Guarantee you and I are liable for on BT’s pensions, then can then drive themselves into bankruptcy if they wish to do whilst whingeing about the “unfairness” of that outcome.

      Competition drives improvement and price. The current setup only drives the latter, which is only ever going to go up anyway – BT are in such a strong position running rings around the government now that they dare not get in the way too much.

      And on that note, someone has to pay for BT Sport. That someone is all the subscribers of all PSTN and ISP services on the BT network. This is a great way to continue to ensure that BT Retail continue to enjoy the benefits of getting the products at cost price (same group) while continuing to destroy the business models of all the other ISPs who “invade” “their” network.

  5. Chris Conder says:

    That is why openreach are so keen to keep us on the copper. they can hold us to ransom for decades. This is why it was crucial to use the funding for altnets. But the government blew it. You know what to do on voting day people?

    1. FibreFred says:

      Funding altnets like Digital Region? yes lets have some of that, dig a massive hole and throw money in it

    2. No clue says:

      I would not call funding BT a massive success either considering they claim FTTC is available to around £20 million people yet only around 2 Million people have the product.

    3. FibreFred says:

      You can’t make people buy it, only make it available, subscribers have grown every quarter so it sounds like good progress to me

    4. Raindrops says:

      So people do not want it?

    5. George says:

      Yes FTTC when you consider has been rolling out for around 4 years now has a pretty poor take up rate.

    6. FibreFred says:

      Is it a poor take up rate? Compared to what, what are you comparing it to, an equivalent.

    7. FibreFred says:

      Mike’s handy summary from here http://www.ispreview.co.uk/index.php/2014/01/uk-isp-bt-tops-1-9m-retail-fttc-users-broadband-customers-hit-7-11-million.html

      “So fibre takeup has been:

      Q3-14: +340k, to 2.4m
      Q2-14: +310k, to 2m
      Q1-14: +265k, to 1.7m
      Q4-13: +270k, to 1.5m
      Q3-13: +250k, to 1.25m
      Q2-13: +200k, to 0.95m
      Q1-13: +170k, to 0.75m (Openreach numbers)
      Q4-12: +131k, to 0.55m (BT Retail numbers only)
      Q3-12: +95k, to 0.40m (BT Retail numbers only)
      Q2-12: +88k, to 0.30m (BT Retail numbers only)
      Q1-12: +50k, to 0.20m
      Q4-11: +60k, to 0.15m
      Q3-11: +50k, to 0.09m estimate
      Q2-11: to 0.04m”

      Looks like very good growth to me

    8. FibreFred says:

      In fact if those figures keep growing as they are in less than 2yrs we’ll see FTTC subscribers outgrow Virgin cable subscribers and the latter has been around for many many years.

      It just takes time that’s all, people don’t jump ship overnight.

    9. No clue says:

      “In fact if those figures keep growing as they are in less than 2yrs we’ll see FTTC subscribers outgrow Virgin cable subscribers and the latter has been around for many many years.”

      It should have more customers than Virgin already considering according to BT it is available to more people than Virgin Cable already. Unfortunately though BT FTTC has less than half the customers of Virgin Cable so they are at least another 5 years off matching them yet if the growth as you say continues the same.

    10. FibreFred says:

      Why should it? Compared to what?

    11. FibreFred says:

      As usual you use totally flawed or non-existent logic. With your lack of logic can you tell me why Virgin cable that is available to 12million and has been for many many years even prior to FTTC and prior to ADSL2 has only 4million subscribers? Surely… vastly superior speeds for years and quality.

      I know it pains you but FTTC subscribers are growing and they’ll top everything regardless of how much you try to run it down.

    12. No clue says:

      Where do you even get the figure VM is available to 12 Million people? Even if it is they have over 4 Million customers, so that is OVER 33% uptake of their products.

      BT on the other hand claim FTTC is available to something like 20 Million already and only have something around 2 Million subs or about 10%.

      Even if we ignore FTTC altogether BT only have 7 Million customers total out of the 25+ Million their products are available to. Or in other words well UNDER 30% uptake.

      BT overtake VM for take up LMAO, yes if we use the school of fail maths you and BT like to employ.

    13. Unknown101 says:

      Noclue: Figure is a couple posts down from this one on the homepage – http://www.ispreview.co.uk/index.php/2014/02/virgin-media-uk-grows-reach-4-51m-broadband-isp-subscribers.html

      On BT’s Q4 financial results they mention FTTC has reached 18m and currently they have 2.4m subscribed across all ISP’s thats pretty good going in the last couple of years compared to Virgin who already had a mature superfast network give BT the amount of time Virgin has had and see how many more customers they would have…

      On the Openreach network 9m BT wholesale customers and 9.2 unbundled thats 18.2 customers so out of the 24m available to UK (not sure where you got it from or if its correct but if it is) thats over a 75% take up – you sure have noclue.

    14. Raindrops says:

      2.4 Million out of 18 Million is not very good at all, FTTC has been available for over 4 years now. So that is less than 600,000 a year when averaged.

      No idea where you are getting those BT figures fred. But obviously they are highly inaccurate unless this site itself is wrong. Even if your BT figures were accurate the fact there are more LLU lines than BT Retail ones speaks volumes.

    15. FibreFred says:

      “2.4 Million out of 18 Million is not very good at all, FTTC has been available for over 4 years now.”

      So it was available to 18 million 4yrs ago Deduction? No…? Totally irrelevant then

    16. Raindrops says:

      I have told you already i am not he who you hate. If you can not remain civil with either persona please do not respond.

    17. FibreFred says:

      I don’t hate anyone and I don’t recall being uncivil to either persona of yours within this item

    18. George says:

      Accusing a user of being another poster is uncivil you have done that to me also.

    19. No clue says:

      It is the Fred way, for some reason is compelled to comment on anything regular posters like Chris have to say, probably because they are from a successful small provider and that irks him. They then at every opportunity accuse people such as JNeuhoff of being more than a single user. Its quite entertaining to watch how deranged fred actually gets when basically every individual in a story disagrees with him.

      The place would not be the same without him though, only have to note the 3 days just gone that he and his whining were not around.

      I suspect it will be business as normal now and poor Mark will once again be flooded with complaints in his inbox from as many email addresses as it can create.

  6. DTMark says:

    People still have phone lines?

    😉

    1. No clue says:

      At some point i suspect many people will just be entirely mobile. It seems to only be the cost and usage limits seem to be the barrier at the moment. Though those compared to 5 years ago are greatly improved today. I wonder if in another 5-10 years the copper in the ground that is being protected will just be left to rot in peace. I suspect the way BT keep tring to milk every penny they can from every area also realise it. The likes of Sky and Virgin have their fingers in all the pies, BT with BT sport (IE TV people actuall want) and possible mobile deals again seem late to the party. Either way i will not miss the days of being held to ransom paying line rental what we have today. Once those are gone its only going to be BT there self its little fans and shareholders that are pee’d off.

    2. DTMark says:

      Within ten years we’ll formally be into BDUK2 which will potentially be a superfast broadband rollout, finally beginning to push fibre to premises with taxpayer’s money. The same taxpayers who pay the line rental will be hit twice again.

      In the end, the entire debacle will result in the slowest and most expensive possible rollout of a modern broadband network that’s fit for purpose leaving consumers with the minimum possible choice in the infrastructure that supplies them and guaranteeing that broadband remains an overwhelmingly State funded affair with the side-effect that it will then be much easier for the State to control access to the Internet through BT, its telephony arm.

      I just find it all amusing as I’ve only ever lived in one place where the BT network was capable of supplying anything vaguely resembling a broadband service, so I’ve only once ever been able to use that network anyway and have always had to find alternatives for internet access and like most I have a mobile phone and VOIP so need for a dinosaur of a landline service.

      I do appreciate that we are ‘lucky’ here to have two sets of broadband capable infrastructure (3 and EE) and an old phone network that could supply a just workable internet connection if it came to it. Others are not so lucky, thankfully for BT, BDUK will make sure it stays this way for as long as possible.

    3. FibreFred says:

      “At some point i suspect many people will just be entirely mobile”

      I suspect not, not at all

      Mobile has its use of course, but will many cease a fixed access line in favour of it? Unlikely.

    4. George says:

      Agree DTMark quite shocking mobile actually already performs better than fixed line for some people.

    5. Unknown101 says:

      George, you put the amount of data from fixed lines down mobile and you’ll soon see the speeds drop right off. The reason most mobile providers are scared to allow unlimited data on 4G. By the time the back haul and we have moved to the next generation say 5G I think FTTC will be completed on most if not all cabinets and FTTPoD will start to kick off at a reasonable price and 1Gb/s up and down speeds will be way more than what can be provided over mobile.

    6. No clue says:

      Clearly he said for “SOME PEOPLE” so i doubt he even knows why you are stating the obvious.

    7. DTMark says:

      “FTTPoD will start to kick off at a reasonable price”

      What makes you think that?

    8. No clue says:

      I suspect its the same thing that makes him think most things, inability to count.

    9. Raindrops says:

      Clearly from this news topic has some funny ideas on what is a ‘success’ and what is ‘reasonable’.
      I thought just to have FTTPoD installed was going to cost hundreds if not thousands of pounds? I do not recall anything stating it would be 1 Gig upload either.
      FTTC has been around for several years now and even with that peoples speeds either still suck or they have no interest in FTTC. At least looking at the last poll here and other regular news items where average BT speeds still do not even exceed 20Mbs.
      I also wonder how much more money BT will try to con the government out of when they claim FTTPoD is a success and should be rolled out nationally at an ‘affordable’ (BT and supporter term) price.

    10. George says:

      Yes fttpod is an expensive service only suitable for businesses really.

  7. BT Investor says:

    “At some point i suspect many people will just be entirely mobile. It seems to only be the cost and usage limits seem to be the barrier at the moment.”

    I know I would cease my landline and I’m an investor in BT. 🙂 But I’m comfortable knowing mobile bandwidth constraints will remain in place for at least another decade so anyone smugly predicting the pending demise of BT’s core business is in for serious disappointment.

    1. JNeuhoff says:

      Mobile won’t be a real challenger to BTs landline VDSL for a long time. However, there are a already a number of disruptive wireless local-loop technologies available which could cause a serious challenge to BT.

  8. doofy says:

    ripoff bt line rental and crap fibre what more can people ask for especially been installed by the team of cowboys

  9. doofy says:

    they can stick there line rental up there ass and Ofcom wants a good kicking them thick bas*****

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