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Advocates of Fibre Optic Broadband Hail Gimme Fibre Day 2015

Wednesday, November 4th, 2015 (12:14 am) - Score 960

Do you want to see the United Kingdom replacing all of its ageing copper telecoms cable with high-capacity pure fibre optic lines (FTTH/P), which can delivery ultrafast Gigabit broadband speeds? If so then you should probably lend your support to today’s annual Gimme Fibre Day 2015 event.

The event, which is timed to coincide with the birthday of Nobel Prize winner Sir Charles Kuen Kao (aka – the “Father of Fibre Optics“) who in 2009 won the Nobel Prize in Physics for “ground-breaking achievements concerning the transmission of light in fibres for optical communication“, is now in its third year and continues to be supported by the FTTH Council Europe and others.

Apparently the idea of Gimme Fibre Day is to help raise awareness about the benefits of the technology through special events in different countries, which in turn should help to drive adoption. It’s a good idea, although previous events have struggled to secure much in the way of mainstream support and the website doesn’t help to clarify if anything is even happening in the UK today (B4RN is listed as a supporter, but at the time of writing there were no event details online).

We find this to be a bit disappointing, particularly with TalkTalk and Sky Broadband being so keen to push the advantages of FTTH/P services via their respective deployments in York etc. In fact there are quite a few pure fibre optic ISPs in the United Kingdom now (e.g. Gigaclear, Hyperoptic and even BTOpenreach), although the vast majority don’t appear to be involved in today’s event.

In an ideal world we’d love to see true fibre optic connectivity become the norm, it would certainly solve a lot of age old performance problems, but first the issue of funding needs to be resolved (i.e. where do we get the needed £20bn to £35bn – figures vary depending upon which report you read) and then we’d have to be prepared for what could be a 10-15 year roll-out, where rural areas might once again be the last to benefit.

Some people argue that one way would be to scrap railway projects like High Speed 2 (HS2) and recommit a big part of the funding to rolling out fibre optic lines instead, although many of the big commercial operators fear that this could impact their private investments into existing networks (especially if BT were to end up becoming the prime beneficiary).

However BT’s rivals need not worry because the Government, which is still struggling under a huge mountain of national debt (around £1.48 trillion) that accounts for most of our GDP (Britain’s debt interest bill could rise to £1bn a week by 2018), appears to have no intention of making such a significant investment.

Meanwhile BT are happy to continue finding new ways (e.g. G.fast and XG.Fast technology) of pulling faster speeds out of ever shorter runs of copper cable, which is slowly bringing fibre optic lines closer to homes, albeit not close enough for Gimme Fibre Day to be even remotely happy about it.

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48 Responses
  1. Avatar Bob2002 says:

    “the issue of funding needs to be resolved (i.e. where do we get the needed £20bn to £35bn – figures vary depending upon which report you read)”

    If we can afford to spend an effectively arbitrary £10 billion/year(or 0.7% of gross national income) every year, on foreign aid, no matter what our economic circumstances, then why the heck can’t we find £5 billion/year over 6 years(or less over a longer period) for a full fibre network?

    We can afford it but as Ed Vaizey has made clear there is zero political will for a nationwide national network.

    1. Avatar M says:

      If you want to get politicial on figures, how about the 160-odd billion wasted on a nuclear submarine when we’re living in a peaceful Europe.

  2. Avatar TheFacts says:

    This is nothing more then a publicity stunt by the so called ‘FTTC Council’ which is just an organisation of suppliers of fibre products.

    1. Avatar GNewton says:

      Shouldn’t it be ‘FTTH Council’? Let’s stick to the facts here.

    2. Avatar TheFacts says:

      Oops! Well spotted.

  3. Avatar FibreFred says:

    We need gimme money day before gimme fibre day 🙂

  4. The FTTC Council is actually a really good idea, but they need to be completely up-front about their funding so people can get the full picture. But I’m blown away at how poorly they’re making the case.

    The fact is that (crude maths) BT pull £2.6 billion or so every year out of Openreach in profits on revenue of about £5 billion.

    That’s a 52% net margin.

    A 52% margin: I’m sorry, but as Openreach is a utility (just like electricity, gas and water), I find that disgusting. (The ‘d’ word should be used advisedly, but I do feel it’s appropriate here).

    We have the numbers on deploying FTTP in the UK because people are doing it: it’d cost about £800 on average (£500 in some areas, £1000 in others, if it’s more than that, check your supplier’s margin).

    To give everyone FTTP, it’ll cost about £800 multiplied by 23 million connections. That’s £18.4 billion. And quite a few of us live in apartments so it will likely be less.

    Openreach will likely make £26 billion or so profit in the next ten years. How about they make a 10% net margin? Hey, they can have 15% and ‘only’ make about £800 million a year. Then by 2025 (or sooner!) we’ll have the broadband infrastructure that will last our country for a hundred years.

    And it’d employ a lot of people and give them good technical skills.

    I also find it really distasteful that BT have started threatening to sue the government for 10 years if the Ofcom review due in early 2016 suggests Openreach be split off. That’s our money vs. our money (taxpayers vs. monopoly profits) they’re talking about. It’s really, really distasteful (the other ‘d’ word).

    Just as an example, I ordered BT’s Fibre on Demand service in December 2014 and so far have got one email. I’ve had no update since April 2015. It’s now November 2015. Hey, let’s add another ‘d’ word: disappointing!

    We’re seeing massive rollouts of FTTP in the US (the US, with their competition?!) priced around £40 a month for 1 Gbps with no/small setup fees – and no, I’m not talking about Google, I’m talking about AT&T ($70), Cox ($99), CenturyLink ($79.95).

    Whilst I’ve been waiting I made a little website:

    http://www.breakupbt.com

    I don’t know where it’ll go, but all comments greatly appreciated.

    1. Avatar MikeW says:

      We can start with a couple of comments on money.

      First, you say that BT pull out £2.6bn per year profit from Openreach.

      BT’s accounts report that Openreach makes an Operating profit of around £300m per quarter, so (crude maths) around £1.2bn per year. That’s a long way from £2.6bn.

      But the “Operating Profit” is not the end profit, either…

      In the last results (Q2 of 2015-2016), BT reported that, as a group, they had £1640m of Operating Profit from all parts of the group for the 6 months of H1, which then turned into “Profit for the period”, after tax, of £1139m.

      Openreach contributed £622m to that £1640 – around 38% of the total. We can only apply the same crude maths to suggest that Openreach therefore contributed 38% of the ultimate “after tax” value: 38% of £1139m is £433m; all for the 6 months of H1 2015-16.

      A full year figure of £866m is a long way from your figure.

      Would you care to explain why your figure is 3 times as high?

    2. Avatar MikeW says:

      Second, you quote a figure of £800 for 23 million connections, reaching a total of £18bn for the country.

      Unfortunately, the previous attempts at calculating this don’t agree with you.

      The most recent widely-recognised attempt at costing this is the Analysys Mason report for the BSG, dated 2008. Their baseline was that broadband was to be supplied to 80% of premises, which would be around 23 million of the 28 million premises.

      They also assumed, for their baseline, that VM subscribers would continue to use their DOCSIS environment, and that only 50% of the non-cable subscribers would upgrade to a fibre solution. Their costings therefore assume that, while you make fibre available to 100%, you only get 31% take-up of fibre.

      This work came to a total of £25bn for FTTH with GPON, for the baseline deployment (ie 31% of premises). If they wanted to reach 63% of premises, the cost rises to £29bn (presumably, the rest are still on VM). If you want the rest of homes to actually connect, you need to add another £4bn.

      The methodology already takes into account the geotype of different areas, and the proportion of MDU (flats, to joe public). There’s no reason to reduce costs there (the UK has, pretty much, the lowest proportion of flats in Europe anyway).

      Conclusion: The well-known figure for FTTH of the UK is £25bn, but much less well known is that only 31% of premises will get it. £33bn is the real figure to reach and connect every property in the UK.

    3. Avatar GNewton says:

      Where do you get the £2.6 billion profit per year from? Sources?

    4. Avatar TheFacts says:

      @DC:

      ‘the monopoly that controls Britain’s internet infrastructure’ – WRONG

      ‘Most British internet users have no choice but to use Openreach’s network to connect to the internet.’ – WRONG

      How will Openreach be ‘sold’?

    5. Avatar fastman says:

      so why do you need FOD — and how far from the cab are you and is that the most effective way of serving you / your community !!!!

    6. Avatar Bob2002 says:

      Think you need to edit your HTML a bit – “We Specialize in Interior or Exterior home Renovations, Including Bathroom and kitchen remodeling, garages and more!” – is not really BT related! 😉

    7. @Bob2002 Thank you for your suggestion, it’s ‘grassroots’ alright! 🙂 Much appreciated.

      @fastman Kind of you to ask – 1.76km apparently. We get 1Mbps or so, usually a bit less.

      @TheFacts

      ‘the monopoly that controls Britain’s internet infrastructure’ – WRONG – – No, true.

      Openreach is a de-facto monopoly unless you can get Virgin Media (duopoly) or start your own broadband company.

      ‘Most British internet users have no choice but to use Openreach’s network to connect to the internet.’ – WRONG – No, true.

      This is true – unless Virgin Media & B4RN and Co. can serve more than 50% of households and businesses. I believe this is not the case.

      How will Openreach be ‘sold’?

      Like any company does – happens many times every day. Offer Openreach to competitive bidding, or just issue shares in the company to BT customers (no need for bids). £8bn is the minimum valuation at 10x P/E with a full fibre rollout to 23 million premises by 2025.

      Happy to offer more info if requested.

    8. @GNewton BT annual report available on BT’s website. Quite a read, was blown away by Openreach’s profitability. Explained a lot on the dreadful service front.

    9. Avatar TheFacts says:

      @DC – check the numbers, VM aiming for 17M, so BT not a monopoly.

    10. Avatar GNewton says:

      According to the BT 2015 Annual Report for Openreach:

      Segment Revenue: 5,011 Million Pounds
      Internal Revenue: 3,064 Million Pounds
      Revenue from External Customers: 1,947 Million Pounds
      Earnings before interest, taxes, depreciation, and amortization: 2,600 Million Pounds
      Depreciation & Amortisation: 1,348 Million Pounds
      Operating Profit: 1,252 Million Pounds

      Just thought it might be of some help in this forum discussion.

    11. Avatar FibreFred says:

      So not 2.6billion then

  5. Sorry, I forgot the canard about the BT pension fund deficit.

    With £800 million a year in profits, Openreach is worth over £8 billion at 10x Price/Earnings. The BT pension fund deficit is £7bn.

    Another problem solved there.

    1. Avatar MikeW says:

      Oh dear. Another money comment.

      What bit of the supposed “worth” (of £8bn) would go towards a fund deficit of £7bn? Where would it come from?

      The supposed worth (whatever multiplier you choose to use) is embodied within the share price. But the share is just the embodiment of ownership of the company; the shareholders own the company, and this “worth” is only the price they could expect to achieve if they sold off all their shares.

      If you aren’t the shareholder, then you can’t do anything with this “worth” of the company.

      Right now, Openreach is 100% owned by BT, in turned owned by its shareholders. If it were split, then ownership would have to be bought by a new set of owners from the old set of owners. Or BT sharees are split, so that each owner receives a new rBT share and a new iOpenreach share.

      To use the £8bn “worth” of the company to plug the deficit, you would have to forcibly take all these new iOpenreach shares off their new owners, and “give” them to the pension fund.

      You just “solved” the problem by theft.

    2. Avatar GNewton says:

      @MikeW: I think your line of reasoning is a bit flawed here. As you said correctly, Openreach is owned by BT, therefore if BT decided to sell Openreach, it could do so (though it still would have to convince the shareholders that it is economically wise to do so). It wouldn’t be the first time that BT sells a company owned by it, I am thinking of the former BT Cellnet, which became O2, some years ago.

    3. @MikeW: BT Group’s pension deficit is the responsibility of BT, not the British consumer. Company profits (including through sales of subsidiaries) are used to close pension deficits as the rule, not the exception, if stock prices don’t solve the problem.

      I am shocked at your use of the word ‘theft’ – please do bone up on this.

    4. Avatar fastman says:

      so how many of you where you are and if there are more than you FOD is the wrong answer

  6. Avatar fastman says:

    Gnewton selling O2 when the business had massive Debt sum horrendous figure selling off cellnet was a sensible think to do !!!!, that the reason it was sold !!!

  7. @MikeW Your points:

    ‘First, you say that BT pull out £2.6bn per year profit from Openreach.’

    Yep, check the annual report on BT’s website. It’s been there or thereabouts for years.

    ‘But the “Operating Profit” is not the end profit, either.’

    Yep, BT can pop a lot of nasties into Openreach until it’s separated for good. That’s what should happen, even if you ignore the fibre rollout.

    ‘you quote a figure of £800 for 23 million connections, reaching a total of £18bn for the country’

    Yep, 23 million is the broadly agreed number. Coaxial will be good for a while – it can do 10Gbps, etc. Good luck doing that with twisted pair.

    ‘The most recent widely-recognised attempt at costing this is the Analysys Mason report for the BSG, dated 2008. Their baseline was that broadband was to be supplied to 80% of premises, which would be around 23 million of the 28 million premises.’

    Would you mind linking me to the report? Seems my 23 million figure isn’t miles off. But I don’t want to comment on someone else’s report, they’ve got different numbers which like predate the last year or so of installations that give us a much better understanding of the numbers.

    ‘They also assumed, for their baseline, that VM subscribers would continue to use their DOCSIS environment, and that only 50% of the non-cable subscribers would upgrade to a fibre solution. Their costings therefore assume that, while you make fibre available to 100%, you only get 31% take-up of fibre.’

    Seems reasonable that Virgin customers stay with Virgin. They might have had to deal with Openreach before!! 🙂

    1. Avatar Mark says:

      You make some excellent points Disapointed Customer, could i also suggest along with the excellent facts and figures site you have created you also set up a petition…
      https://petition.parliament.uk/help to get the separation of Openreach discussed.

    2. Avatar FibreFred says:

      I’m sure you’ll be the first to sign it “Mark” 😉

      Good luck with your campaign DC, I’m not sure how factual it is but everyone has a voice.

    3. Avatar fastman says:

      excellent points really ? misinformed more likely

    4. Avatar TheFacts says:

      So a separate Openreach would suddenly start installing FTTP across the UK to all properties?

      If this happened what would you, @DC, a) want to happen (your property first) and b) expect to happen based on sound commercial principles?

    5. Avatar GNewton says:

      @TheFacts: Let’s depopulate all rural areas, they are never going to be commercially viable 🙂

      How did this country get electricity, water etc in the first place?

    6. Avatar FibreFred says:

      ^ Using lots and lots of money over a very long period of time

    7. Avatar Mark says:

      “I’m sure you’ll be the first to sign it “Mark” ”

      Of course and i am sure you will be right behind, unless you are stating whatever Ofcom decide in their review of BT you are happy with and will have zero complaints to make on here.

      “Using lots and lots of money over a very long period of time”

      The national Grid took just over 10 years. Mid 1920s until mid 1930s. FTTC rollout due to be complete by 2017 and starting in 2009 puts that at 8 years, even though half of the required infrastructure IE the cable ducts, existing cabinets to link to Fibre cabs and exchanges were there already.

    8. Avatar FibreFred says:

      Oh how you nicely forgot to mention that the grid over that ten years was just linking up the separate smaller grids together to become the national grid of today it wasn’t 10 yrs to cable most of the country

    9. Avatar GNewton says:

      @Mark: You can learn more about the history of the National Grid at https://en.wikipedia.org/wiki/National_Grid_%28Great_Britain%29#History, amongst other sites.

      Anyway, when it comes to modern day broadband in the UK, we can clearly see an incompetent “Can’t Do” culture in this country, and that includes in particular BT, as can be seen from virtually all major review sites, see e.g. https://uk.trustpilot.com/review/bt.com or http://www.ispreview.co.uk/review/products/7.html. But it also include Ofcom and various failed government policies.

    10. Avatar Mark says:

      “Oh how you nicely forgot to mention that the grid over that ten years was just linking up the separate smaller grids together to become the national grid of today it wasn’t 10 yrs to cable most of the country”

      Ah yes of course they did not cable anything to link the smaller grids together. It was all connected and became known as the national grid with pure hope, finger crossing and psychic powers. Obviously!

    11. Avatar FibreFred says:

      “Mark”, we’ll call you Mark but knowing full well your previous many names.

      You gave the impression that the country was cabled in 10yrs with elecricity, but no… all that was done in 10yrs was connect all the different regions together.

      Tell me how that is any comparison to fibering up the entire country, it isn’t.

      Anyway, I won’t take part in your troll trap. I’ve put you right and so has Mr Newton….

    12. Avatar Mark says:

      ““Mark”, we’ll call you Mark but knowing full well your previous many names.

      You gave the impression that the country was cabled in 10yrs with elecricity, but no… all that was done in 10yrs was connect all the different regions together.”

      How were these regions connected if not by cables? The question was how did the COUNTRY not regions of the country get electricity. I fail to even see how you can even think a system that has been in place for over a century in total is in any way comparable in coverage or reliability to FTTC or BT in general. The first part of your comment i have know idea of what you are referring to.

      “Anyway, I won’t take part in your troll trap. I’ve put you right and so has Mr Newton….”

      I will look forward to no more responses on the matter or name calling from yourself then.

  8. Avatar fastman says:

    makr so when are you creating a petition for vigin to be forced to open ts network and share its network

    1. Avatar Mark says:

      “makr so when are you creating a petition for vigin to be forced to open ts network and share its network”

      I do not believe BT or VM should have to share their network.

      I also do not believe the essence of the word “share” equates to charging somebody for something before you give it to them. Id call that “selling”.

      Regardless VM have less coverage, less customers and are not deemed to be a SMP by Ofcom so there is little to point in questioning if they should “share” their network.

    2. Avatar TheFacts says:

      The word is ‘wholesale’.

    3. Avatar Mark says:

      Indeed it is aka sell NOT share something so dunno what he was on about.

  9. Avatar Al says:

    Whilst I’m sure many would love to have FTTP, there are still plenty on ADSLMax/ADSL2 who are still waiting for FTTC. And I suspect many of them would happily take FTTC right now if they had it.

    Sure scarpping HS2 would free up the bulk of the money to role out FTTP, but perhaps like the National Grid for power we should have a National FTTP Grid, so combine the OR netwoek/VM Network and the other fibre networks into one. I’m sceptical that VM and the others would be for that idea.

    1. Avatar TheFacts says:

      I would not assume that scrapping HS2 would see 100% FTTP happen.

  10. Avatar GNewton says:

    @TheFacts: “I would not assume that scrapping HS2 would see 100% FTTP happen.”

    No, not in this country with its “Can’t Do” culture.

    1. Avatar Mark says:

      I doubt some would want the HS2 budget diverted for a FTTP network…….. Unless of course it was tens of millions given to BT again to do another late job.

    2. Avatar TheFacts says:

      Why would FTTP be more of a priority than other things?

      Isn’t HS2 required for additional fright capacity?

      Seriously, why not BT with much of the existing infrastructure. And get them to find some contractors who will not be late.

    3. Avatar Mark says:

      “Why would FTTP be more of a priority than other things?”

      Dunno why was FTTC when less than a third have subbed to that?

      “Isn’t HS2 required for additional fright capacity?”

      Dunno is it a ghost train? I have not heard anything about it frightening people.

      “Seriously, why not BT with much of the existing infrastructure. And get them to find some contractors who will not be late.”

      BT have fibre cables to most homes already do they? I do not think so, whoever would provide FTTP would have to dig up the streets. As to why not BT…
      Delays, Poor service, Profit sharing within the group, poor quality in general, no ‘need for FTTP’ your words from prior news items.

      As to them finding contractors, im sure if the government were to take the Billions from HS2 and divert it to FTTP they are capable of finding contractors on their own, rather than rely on BT who have proven time and time again any roll out and development from them is delayed and then blamed on blocked ducts, contractors and just about anything else except BT itself.

    4. Avatar GNewton says:

      @TheFacts: “Seriously, why not BT with much of the existing infrastructure. And get them to find some contractors who will not be late.”

      I think, as usual, you already know the answer to that, don’t you? BT had years to find suitable contractors, yet it failed miserably. Just study up on the TrustPilot or ISPReview reviews, which is just the tip of the iceberg as regards BTs sheer incompetence.

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