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Ofcom UK Asks for Feedback on Full Separation of Openreach from BT

Thursday, July 16th, 2015 (8:11 am) - Score 2,596
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The telecoms regulator has today published a new discussion document as part of their major Strategic Review of Digital Communications, which asks for feedback on the vexed question of whether Openreach should be completely separated from BT so as to boost UK broadband and phone competition.

The last such review, which was conducted over a decade ago, effectively forced BT to open up their national UK telecoms network to more competition through Local Loop Unbundling (LLU) and also fostered the creation of BTOpenreach as a semi-separate network access operator (aka – “functional separation“).

Today Openreach takes responsibility for most of the access, upgrades and maintenance related work on BT’s national network, while Ofcom’s rules work to ensure some separation between BT’s commercial arm and Openreach in order to avoid the telecoms giant abusing their dominant position in the market.

Sharon White, Ofcom’s CEO, said:

This review is about ensuring people get the best possible communications services, wherever they live and work. Our priorities are clear. We want to promote competition, investment and innovation, so that everyone benefits from even better coverage, choice, price and quality of service in years to come.”

But many rivals feel that this is not enough, particularly the main beneficiaries of the last review (e.g. TalkTalk and Sky Broadband), with common examples focusing upon Openreach’s control over who can conduct engineering work on BT’s network and a lack of flexibility in third-party ISP control of FTTCfibre broadband” products and prices; we’d like to see ISPs have more control too, so as to help create a more diverse market.

BT’s move to muscle in on the mobile market by merging with EE also has mobile operators worried since few can match BT’s fixed line network, which could in turn be leveraged to help launch much cheaper or more flexible mobile packages that rivals may struggle to compete with.

In today’s update Ofcom claims that their past efforts have “delivered real choice, quality and value for phone and broadband customers over many years,” although in the same paragraph they admit that the “incentive for BT to discriminate against competing providers can be limited by regulation, but not removed entirely.”

The regulator notes that BT’s network has “evolved” over time and their “fibre lines” are now running closer to premises (still not close enough for some though), which Ofcom suggests “may require different models of competition than those that worked best for the traditional copper telecoms network.”

Ofcom also notes that Openreach’s performance, such as with regards to slow line installations and fault repairs, have not always been as fast or effective as they could have been; although new rules have already been brought in to tackle this (here). It’s for these and other reason that Ofcom is today seeking views and evidence on several “future regulatory approaches“.

Ofcom’s Mooted Regulatory Approaches for BT

1. Retaining the current model, where Openreach operates as ‘functionally separate’ from BT, and using regular market reviews to address any concerns around competition;

2. Strengthening the current model by applying new rules to BT – such as controls on its wholesale charges with stronger incentives to improve quality of service, or tougher penalties if BT falls short;

3. Separating Openreach from BT could deliver competition or wider benefits for end users. It would remove BT’s underlying incentive to discriminate against competitors. Separation could also offer ways to simplify existing regulation. However, the process would be challenging and it may not address some concerns relating to Openreach – such as service quality, or the timing and level of investment decisions;

4. Deregulating and promoting competition between networks. Virgin Media and a variety of smaller operators own networks, which allow them to provide phone and broadband services without using BT’s network at all. This kind of ‘end to end’ competition, which sometimes involves running fibre lines directly to premises, can help incentivise Openreach to improve its infrastructure. However, it could also lead to duplication of networks and weak competition.

We suspect that much of the focus will rest with the vexed question of Openreach’s separation. However Ofcom’s new CEO, Sharon White, has previously stated that she perceives the best way forward as involving a “lighter approach” to regulation.

Similarly it seems unlikely that the Government would seek to stir up the market at a time when they need BT on side to help deliver their Broadband Delivery UK programme and bring fixed line superfast broadband (24Mbps+) speeds to 95% of the country by 2017/18.

Meanwhile BT has already hinted that such a move is likely to discourage their investment in future services, such as the commercial roll-out of 500Mbps G.fast technology that’s due to start around 2016/17 (here and here).

Splitting up a commercial company is also no easy task and could tie the regulator up in legal squabbles for a long time to come and, as Ofcom alludes when it states that such a “process would be challenging and it may not address some concerns“, there’s no guarantee that the grass would be greener on the other side.

Instead Ofcom are perhaps more likely to take an easier path, which could involve options 2 or 4 above (maybe a combination). But that doesn’t mean to say there won’t be big and difficult changes for BT, with the regulator already proposing one as part of its 2016 Business Connectivity Review – Dark Fibre access (here). But rivals will want more.

Dido Harding, CEO of TalkTalk, said:

We are pleased that Ofcom is looking at all the options for the future of the telecoms market as part of its strategic market review. This is a once in a decade opportunity to make bold, radical decisions, such as the separation of Openreach. It is vital that Ofcom places customers at the heart of their decision-making process so that we end up with a competitive market that delivers the modern digital services and infrastructure Britain desperately needs.”

Mai Fyfield, Sky’s Chief Strategy Officer, said:

It is welcome news that Ofcom is putting the future of Openreach at the centre of its review. For too long, consumers and businesses have been suffering because the existing structure does not deliver the innovation, competition and quality of service that they need.

We believe Ofcom should now move quickly to ask the Competition and Markets Authority (CMA) to undertake a full competition inquiry. In a rapidly changing sector, it is vital for the UK that the national telecoms network delivers a service fit for the 21st century.”

A BT Spokesperson told ISPreview.co.uk:

We welcome this review and are confident it will find the UK broadband market to be both vibrant and healthy.

There has been huge progress this past ten years with an explosion in competition and broadband usage. Consumers are getting more for less and the UK has outpaced its European peers in terms of superfast broadband. As Ofcom say today, “This approach has delivered real choice, quality and value for phone and broadband customers over many years”.

Much of that progress is down to BT investing billions of pounds in fibre at the height of the recession. That investment wouldn’t have occurred had BT been split in two a decade ago and our ambitious plans for ultrafast broadband also depend on BT remaining intact.

Ofcom have overseen a regime that has balanced investment with competition and we hope they will once again put the needs of the UK and its consumers ahead of those who have tried to keep the UK in the digital dark ages.

The one area where consumers are getting a raw deal is Pay TV. There is no reason why UK consumers should pay half a billion pounds more a year than the European average. Ofcom have said they will consider whether to make it easier for customers to switch in this area but this isn’t enough. Much tougher action is needed to address the fundamental flaws in this market.”

It’s worth pointing out that Ofcom’s review, which notes that superfast broadband is now available to 83% of UK premises, will also focus on other areas too. In particular the regulator estimates that a broadband speed of 10Mbps “is necessary to benefit from today’s popular online services“, although they note that 8% of UK households cannot currently access those speeds.

The BDUK deployment should help to resolve much of the speed concern, but Ofcom are also on the record as wanting to see a tougher Universal Service Obligation (USO) or Commitment (USC). The Government have so far said that they will review the idea of a 5Mbps USO, although there is not yet a firm statement of intent to go further than that.

Ofcom is also looking at how it could make it easier for consumers to compare ISPs (we suspect this is more a reference to business connectivity as there’s no shortage of domestic comparison sites) and to further improve switching by expanding the migration rules to the mobile market and services bundled with Pay TV.

The closing date for responses to today’s discussion document is 8th October 2015 and Ofcom then intends to publish a statement, which will set out its draft proposals, by around the end of this year.

UPDATE 9:07am

Added a comment from TalkTalk above.

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Mark Jackson
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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41 Responses
  1. Avatar FibreFred

    I’m pretty sure we know what the feedback will be!

    • Lol!

      Actually, in my view it would almost certainly be a waste of time. All that I think would happen would be that Openreach would do its best to abuse its dominant position, and we would all direct our gripes at them directly.

    • Avatar FibreFred

      Well I meant from Sky/TT/Virgin 🙂

      If people honestly believe this crew has the customer at heart when pushing for a split then you are deluded. This is nothing more than trying to weaken BT and has nothing to do with a better service for customers.

      It will be interesting to see what happens, I’ve said it before I just cannot see how 3) could happen I cannot see how Ofcom has the power to do this, I expect there would have to be something catastrophically wrong for that to be contemplated and if such a thing existed Ofcom wouldn’t be asking for feedback they would just crack on.

    • Avatar Steve Jones

      @FF

      Ofcom do not, of course, have any power to directly mandate a separation of OR from the rest of BT. What they can do is to make a recommendation and kick off an investigation by the Competition and Markets Authority (previously the Competition Commission). A full on investigation by the CMA takes a long time, is highly uncertain and inevitably involves a great deal of uncertainty which has the potential to kill investment in the interim. Exactly this was threatened by Ofcom some years ago, and it was the “out of court settlement” that BT and Ofcom made that resulted in the “equivalence of input” principle and the current regulatory as nobody had much to gain from several years of uncertainty over what would have been a hotly contested investigation with huge legal implications. As it was, the compromise was made or else investment by many companies (LLU operators as well as BT) would have been on hold. There is the prospect of history repeating itself.

      As for those that argue that a separated Openreach would be incentivised to do a full on fibre investment, then that’s highly debatable. Such an investment would only be financed if there was some reasonable chance of return. The alternative would be for the shareholders of OR to just use the business as a source of dividend returns and make minimal investment. Ofcom are legally bound to allow a modest return on investment.

      The alternative of shareholders (or other financiers) finding perhaps £10-20bn for large scale investment is uncertain (to put it mildly) when there’s little prospect of a return. Better to just take the money out as dividends from a reliable, even if gently declining business. After all, there is ultimately the passive infrastructure, and much of country is wholly reliant on it. Why spend huge amounts of money on an uncertain return from a regulator that might change the rules at any time. Witness “dark fibre”, the issue of “equivalence” and so on.

    • @Steve -your suggesting if Openreach remain as part of BT Group, it will continue to operate as a slum landlord, making do and mend, with 60% failed appointment rates and hanging on for subsidies, in love with its legacy and afraid to create a network capable of supporting the nations ambition for a Digital ecomony.
      FTTC is a reasonable stop gap, but the gaps in service are too great to support say on-demand TV to a quality that people will a little more.
      BT Group has lost the plot in the manner it is treating Gov and BDUK and the local authorities.
      In the consultation on cost allocations, it is interesting to see the £1bn of BT group costs, which have nothing to do with running a network being applied to regulated services.
      BT Group also get to decide on any investment over £75m, so Openreach is entirely limited by non-performance of BT Global, moribound BT Retail.
      I thought measures to ring fencing capital investment for the network would be sufficient but your convincing me otherwise.

    • Avatar FibreFred

      “in love with its legacy and afraid to create a network capable of supporting the nations ambition for a Digital ecomony”

      lol, no one is in love with legacy, its a simple matter of cost and maximizing what you have now, this is what is happening all over the world not just in the UK.

      There are just so many problems rolling out FTTP to everyone in the UK:

      Cost
      Manpower
      Time
      Very long payback, some areas may never payback!

      Those are some of the tops ones but also add onto that, if BT funds it themselves as well as the very long payback that could get even longer as the services have to be wholesaled and prices regulated by Ofcom and every few year’s you’ll get the TT and Sky whingebags asking for reductions in cost which means the payback gets even longer.

      Sounds appealing!

    • Avatar Gadget

      NGA – I’m not sure of your source for the claim of 60% failed appointment rate, but it seems to be completely at odds with the statistics published by Openreach here: http://www.homeandwork.openreach.co.uk/Our-responsibilities/ and these are reported to Ofcom and official.

    • @Gadget – sorry on the stat but the Ofcom doc does stress Operneach failings in this area.

      @fibre Fred As per the WSJ articule, OR investment has been flat, this £3bn or more likely £1.5bn on NGA is same resource that would have been maaintaining the e-side and d-side, no new investment, none. Openreach profits help the rest of BT Group, so the resource issue is a consequence of BT Groups decision making to invest in other things. Openreach the cash cow looks very unloved.

    • Avatar AndyH

      Where are you seeing the 60% failure rate in an OFCOM report? The numbers I see are around 2-9% depending on whether it’s a SIM order.

  2. Avatar Pete Woods

    I suspect splitting Openreach and BT up would make little difference. Openreach would still essentially be in a near-monopoly position for UK broadband infrastructure, again with no real incentive to improve their performance or listen to end customers. They’d maybe just have access to a smaller pot of cash without the retail arm. Creating real competition in the wholesale market would involve somehow making the likes of Virgin media spreading out to the size of Openreach’s network, which I don’t see happening soon / ever.

    • Avatar gerarda

      I think it would depend on whether the people running an independent Openreach have a vision that it is a high tech company that needs continually to invest in its future.

      There may actually be some talent in BT which if released from the constraints of the public sector monopoly protectionist culture that currently prevails may actually take them into the 21st century.

    • Avatar FibreFred

      gerarda,

      The business offerings from Openreach look good to me, from 2Mbps up to 10G access, sounds 21st Century to me, so I assume you are talking about the consumer broadband offerings which are lacking.

      They are already looking at G.Fast (cutting edge) but I suspect that isn’t what you are talking about either, most likely FTTP on a wide scale, not sure how a split off Openreach would achieve that?

    • Avatar Bob

      It could make a big difference the current vertical integration of BT creates a conflict of interest. A separate Openreach company has the local loop at the core of its business it has a vested interest in maximising the use of that local loop and to take best advantage of it means extending fibre further into the network
      Sky is already starting to show an interest in using the local loop to supply TV as well as Broadband and Phone.

    • Avatar FibreFred

      They are already doing this as above? Going even further will require a lot of money with a very long pay back period, how would they afford it?

  3. Avatar TheManStan

    The biggest can of worms in the world… the pensions scheme.

    Cellnet was easy to spin out without pension liabilities as it had no historical ties to old BT structure…

    Openreach is very much a part of old BT structure and has the biggest employee base historically and now… spun-out it’ll have to take on the major portion of liabilities.

    • Avatar GNewton

      That was one of the government’s biggest mistake to take over a backup guarantee of the BT pensions. This should be removed, BT, and Openreach as a separate company, should become full commercial companies.

    • Avatar Steve Jones

      @GNewton

      You clearly have no idea about the legal issues involved. The “Crown Guarantee” is not a to BT, it’s a to pensioners and was done that way to avoid the industrial action and uncertainty that would have happened had BT been privatised without it. As such, it’s written into statute law and its scope has been tested in court. The guarantee cannot just be removed, it would require primary legislation. More particularly, it would require primary legislation that is retrospective in action, and it’s one of the basic principles of liberal democracies that they don’t enact such laws except in the direst circumstances. I cannot see any government putting forward such legislation, and certainly not being passed in parliament. Maybe if there was a Greek style crisis, but nothing much short of that.

      However, leave the Crown legislation aside as that’s not really relevant to splitting up BT unless, of course apart from the risk of the Crown guarantee being invoked. Any BT/OR split would require some form of split of the pension liability. Most likely it would have to be based on the roles pensioners (and deferred pensioners) will have performed whilst at work. The history is that the vast majority of those will have been employed in the voice network and exchange area, so most likely OR will carry most of the responsibility for the pension scheme. (At the time of privatisation BT employed over 250,000 people against about 80k in the UK). As such, a very large amount of the pension liabilities (and the scheme) were inherited from when it was under state ownership.

      People also ought to bear in mind that in the big picture, Openreach would not be a very large company. Turnover is around the £5bn a year mark, with little prospect of growth due to the tight constraints under which it works. It could not, for instance, compete in any “upstream” products. It’s also faced with a lot of infrastructure competition in the most lucrative areas. VM of course, but a number of other operators. It’s only in the least cost effective areas (some of which will be loss making and cross-subsidised from rural areas) that

      A £5bn turnover might sound a lot, but it’s not a great platform for large levels of investment when it has no say in upstream products. It could also almost certainly end up with the lion’s share of responsibility for the pension deficit.

    • Avatar GNewton

      @Steve Jones: Your truly sounds like a lame excuse to protect the existing BT, which, as we all know, has by and large failed as a proper telecom company in most parts of the UK, there was virtually no fibre access network built by that company (VDSL isn’t fibre in case anybody brings this up!). Any solution other than the current status quo will almost certainly im;prove the situation. A remnant BT without the burdens of Openreach and that of legal restrictions will be able to do better in services (something BT hasn’t been good at either), and it will have more flexibility, it could even use other access networks, or even different backbone core networks (if Openreach and BT Wholesale were merged into one independent entity).

      An independent Openreach would finally have to become more innovative if it wants to survive in the market, and it would to charge more realistic market prices (which at the moment are probably too low).

    • Avatar Steve Jones

      @GNewton

      I was addressing the issue of the pension scheme and how it would have to be dealt with. Perhaps you could deal with the actual issues I raised rather than rambling off into things like whether VDSL can be described as fibre or not. Fortunately the people who have to deal with this will have some idea of the complex legal issues.

      As for a full fibre rollout, care to explain how a company which would have a turnover of about £5bn could finance something that would cost over £20-£25bn? Based on the cost of capital, it would require something of the order of £2bn a year extra revenue for perhaps 20 years payback.

      The numbers simply don’t work for anything but partial implementation in the most cost effective areas. Bear in mind all of OR’s major products with the sole exception (for now) of GEA/FTTC & GEA/FTTP are regulated with cost-based pricing. It generates a safe return, but nothing like the money required for a full-scale network swap-out. A separated OR would make no difference in that respect. Either a business case costs in, or it does not.

    • Avatar themanstan

      I´d hazard a guess at 75% of pension top ups… so deduct 250-300M GBP from profits every year…

    • Avatar GNewton

      @Steve Jones: Yours sounds like a Can’t Do argument.

      To start with, how do you know it costs £25 Billion for Openreach to upgrade to fibre? How do much poorer countries have more widespread fibre access networks?

      And why shouldn’t an independent Openreach be able to charge realistic market prices (they are probably too low now!)?

      As regards pension burdens: There is always a risk with company pensions, the government should not cover for this.

    • Avatar FibreFred

      You can always tell when people are running out of things to say and can’t respond to well thought out , rational and legal arguments when they resort to things like “Can’t do attitude” and questions about costs already covered so many times and making comparisons to other countries which is effectively comparing apples with footballs.

      If you want a good comparison have a look at NBN in Australia, grand plans to FTTP up the whole country, then they scaled it right back to doing FTTC instead, now its looking like it will be FTTC limited to 12Mbps!

      Yeah look how NBN did it.. what a role model, UK broadband already makes a mockery of it and we’ve got plenty of things left to do yet.

    • Avatar TheManStan

      I don’t think he understands the basis of why i brought up the issue of pension scheme… and it’s nothing to do with Crown Guarantee…

    • Avatar GNewton

      @TheManStan: I understand your reasoning about the pensions burden. An independent Openreach would probably have to take a proportional share of this. However, this won’t be a major obstacle for the creation of an independent OpenReach, it is already halfway there anyway. This would help to make it become more of a commercial company, with commercial thinking, it would force it to become more innovative and to give up it’s lazy ‘Can’t Do’ culture inherited from its monopoly GPO past.

    • Avatar TheManStan

      Really?
      So substantial pension top ups swallowing a sizable percentage of free flow cash is not an obstacle!
      There is potential for any pension scheme shortfalls to reduce investment to next to nothing…

    • Avatar GNewton

      @TheManStan: “There is potential for any pension scheme shortfalls to reduce investment to next to nothing…”

      One more reason to do everything possible for a wakeup call to this lame entity known as ‘Openreach’. It needs to be kicked into the 21st century, become competitive and innovative, and to get rid of its lazy “Can’t Do” culture inherited from its past GPO haydays. And independent company will serve towards this goal and help secure the pensions before the government has to step in with its ‘Crown guarantee’!

    • Avatar TheManStan

      Right… so the fact that external markets affecting the value of pension funds resulting in deficits which are uninfluenced by how well a company is doing (even if it is “can do”) escapes you?

  4. Avatar Billy

    Local Look Unbundling (LLU)

  5. Avatar Bob

    Separating Openreach from the man BT company removes the current conflict of interest. You have a company that is focused on maximising there use of the local loop rather than with the current set up BT wishes to discourage it

    Getting improved service from it should also be easier with it not vertically integrated into BT. So far BT has been highly successful at stopping an real competition in the local look

    Openreach does not need to be sold off as such it could become a wholly owned subsidiary BT company

  6. Avatar MikeW

    In the past, regulation has focussed on dropping prices, and introducing competition. It has all been done with the belief that the extra competition (of more “me-too” services) will cause a drop in price.

    The biggest question for this review is whether that regulatory focus should remain as the priority. Or should the focus switch to allow investment in what used to be perceived as a mature market? Investment which, obviously, needs a level of profit to entice the investors.

    What is the government telling Ofcom that we need as a country? Cheaper broadband? Or is it trying to set an environment for investment in ultrafast broadband? Will we see the government responding to the consultation?

    @gerarda thinks that an independent Openreach can survive because it will feel the need to invest to survive. That there’s some culture it needs to be released from.

    Myself, I believe that Openreach, while consuming high tech products and needing huge investment, can only ever produce utility products at utility prices. The profit that investors seek isn’t made there. It isn’t made from the monthly wholesale line rental. It is made on the content: The pay TV, the sports channels that many deride. The boxsets.

    Sky make their real profits on the pay TV. They have cheap broadband to round off a bundle, to entice people who may head for VM (in years gone by), or BT-TV/TT-TV (now), or Netflix (in future, if the US is anything to go by). Their motivation is to keep the TV profits strong, and to turn broadband pricing to the minimum, to keep competitors weak.

    VM make their profits from a combined bundle of TV and broadband, and make the most of being a separate physical network with vertical market control. Their motivation is to keep control of that vertical market; I doubt they’d enjoy a separation of Openreach, because they would become the next target. It is hard to play the role of the underdog when you end up being the last of the dinosaurs.

    BT’s future profitability will come from TV, no doubt. The hope and expectation of these profits on one side of the business is what allows them to invest (and to attract investment) in the mundane access network. There is room for some “vision” here if they manage to truly converge their fixed network with a mobile one; a network where you just use bandwidth whether fed from a fixed-line backhaul, LTE or WiFi. The profit would still come from content, but the compelling nature of the offer would come from combining the networks.

    If ever there is hope for “vision” on the scale that @gerarda is thinking, it would need a divested Openreach that doesn’t just manage the fixed-line access network, but also manages a wireless access network and a mobile access network. Whose product is just “Access. Wherever, Whenever”.

    That means any consideration of splitting Openreach is premature without considering the impact of bringing in EE.

    An independent Openreach would be all about the utilitarian transport of bits in the access network … but that would be entirely useless without matching capability in the core and transport networks – and matching the capability means matching the investments.

    The core and transport network all seems to be part of BT Wholesale, so the obvious question would be: Do we cause problems by divesting Openreach, but leaving Wholesale in BT?

    BT has already started the conversation about merging Wholesale into Openreach. Isn’t any consideration of splitting Openreach also premature without considering the impact of bringing in Wholesale?

    And, having mentioned VM, isn’t there scope to be asking the question about whether VM’s access network should be merged with a divested Openreach? Essentially creating a UK equivalent of the NBN? It might not prove to be a good idea … but it would be interesting to see what the different parties say about it!

    I can go either way on the issue of divesting Openreach, but I think the solution needs to promote investment primarily, and allow room for that “vision”. I don’t think the country’s long-term interests are best served by just targeting cheap broadband, so that means I’m against the idea of promoting competition that just makes stuff cheaper. I am for the promotion of competition that triggers investment, and makes stuff both better and more available, but that very much means we shouldn’t establish competitors that can just cherry-pick. Tricky…

    • Avatar gerarda

      I agree with much of what you say and there are a lot of issues to be overcome but if you look back you can see the lack of faith that BT have in a digital future e.g refusal to rollout ADSL without publicly funded demand stimulation exercises, the sale of their mobile operation, ludicrously low take up assumptions for FTTC, etc, any change has got to be better than the status quo.

    • Avatar GNewton

      @MikeW: “Essentially creating a UK equivalent of the NBN? It might not prove to be a good idea … but it would be interesting to see what the different parties say about it!”

      This would cause a big riot by the BT trolls, just see further up this forum thread on what they think about the NBN. 🙂

      Your suggestion is an interesting idea from different perspectives:

      1) Reduce duplication of fibre access networks
      2) Cover the whole country
      3) Potential not to burden the taxpayer in the long term

      The original Australian NBN model was quite a good one, much better than the UK BDUK farce. It was planned as a proper long term investment and would have seen an eventual ROI. It was then abandoned after current Australian coalition government won the last election and took over from Labour who was in disarray unrelated to the NBN. The new government then was lured into the same trap as we see with the UK BDUK, with the false believe that FTTC would be cheaper and easier to do, neither of which is true in the long run. Most government aren’t able to follow through with good long term projects.

    • Avatar TheFacts

      @GN – what bits above do you disagree with and why?

    • Avatar GNewton

      @TheFacts: Do you have any reasonable proposal for a nationwide fibre without burdening the taxpayers in the long term?

    • Avatar dragoneast

      How do you compel investment? The Government would, I am sure, like to know. After all they’ve been trying for long enough. And are the rest of the consumers ready to accept higher prices?

    • Avatar MikeW

      The idea behind the NBN was brilliant. Brilliantly socialist, principles I don’t necessarily agree with, but if it had worked, it would have been worthwhile. Even with ~10% on fixed wireless and satellite, at least they were aiming to cover everyone.

      The problem with the NBN was affordability – but the truth has been slow to emerge.

      It seems that the original premise required the monthly charge for an NBN connection to go up over time; something which hardly anyone cottoned onto … Here, the price of broadband has dropped over time, not increased. In Australia, broadband is already extremely expensive, and the need for prices to rise more would become less palatable.

      NBN was also critically failing at actually rolling out fibre to the places it should have been – and was creating terminal relationships with the contractors who actually did the work. It turns out the project was in disarray.

      If the coalition had left NBN to follow Labour’s original premise, it would have died a long slow death. Something needed doing.

      I like the video presentation here:
      http://simonhackett.com/2014/09/06/rebooting-the-nbn/

      However, it also seems to have recently transpired that the cost per premise (for NBN’s fibre) was turning out to be around double the numbers that the politicians bought into.

      “The new government then was lured into the same trap as we see with the UK BDUK, with the false believe that FTTC would be cheaper and easier to do, neither of which is true in the long run.”
      On this, I disagree with you – FTTC is indeed cheaper and easier to do than FTTP. Both short term and long term. Who are we to argue about how commercial companies choose to go about their commercial decisions?

      But it seems others believe that, even having done FTTC, there is still a good chance that doing G.fast *on top* remains cheaper and easier to do than FTTP, both short term and long term.
      http://postimg.org/image/xc1la7089/

  7. Avatar fastman

    agreed FTTP is hard / Expensive and highly challenging – it makes good sense to deploy it in New Build pre occupancy – assuming the developer will sign an FTTP contract otherwise you get left with a new build on copper (not in commercial or any BDUk programme !!!!)

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    Avg. Speed 30Mbps, Unlimited
    Gift: Code: HYPER19
  • Vodafone £21.00
    Avg. Speed 35Mbps, Unlimited
    Gift: Amazon Echo Plus
  • Direct Save Telecom £22.95 (*29.95)
    Avg. Speed 35Mbps, Unlimited
    Gift: None
  • Origin Broadband £23.00
    Avg. Speed 35Mbps, Unlimited
    Gift: None
  • SSE £23.00 (*33.00)
    Avg. Speed 35Mbps, Unlimited (FUP)
    Gift: None
Prices inc. Line Rental | View All
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