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BAD NEWS for BT as 121 Cross-party UK MPs Call for Openreach Split

Saturday, January 23rd, 2016 (8:08 am) - Score 4,141

The Government itself might still have big doubts about the merits of splitting BT from control of their national phone and broadband network (Openreach), but a new report backed by 121 cross-party MPs has supported separation to boost performance and competition in the UK telecoms market.

According to the Government’s Digital Economy Minister, Ed Vaizey, splitting BT from Openreach has “lots of potential to backfire” and existing “regulations have proved very effective” (here). However separation is currently being “seriously considered” as part of Ofcom’s major Strategic Review of Digital Communications, which will publish its findings by the end of February 2016.

On the flip side BT contends that it has continued to meet Ofcom’s existing regulatory targets and that any attempt to split their business might tie the process up in legal battles. Questions also remain over how BT’s debt / pension pile might be apportioned in the event of a split, as well as the impact on consumer prices from all of the related changes (better services cost more money) and what kind of market model might be adopted in its place. BT has also warned that their plans to roll-out ultrafast (G.fast) broadband could suffer.

Never the less a new “Broadbad” report from the British Infrastructure Group (BIG), which was setup by Grant Shapps (Conservative MP for Welwyn Hatfield), has brought together 121 cross-party Members of Parliament in support of calls for BT to lose control of its Openreach division.

The study claims to highlight “the serious problems that the UK broadband network is facing” and argues that the current situation of “large inconsistencies in service leading to millions of citizens and businesses experiencing slow or non-existent connections is now untenable“.

The report contends that “our future is being held back by systemic underinvestment stemming from the ‘natural monopoly’ of BT and Openreach“, which is “stifling competition, hurting our constituents and in the process limiting Britain’s business and economic potential.”

Cross-Party Report Statement

We believe that Britain should be leading the world in digital innovation. Yet instead we have a monopoly company clinging to outdated copper technology with no proper long-term plan for the future. We need to start converting to a fully fibre network so we are not left behind the other nations who are rushing to embrace digital advancement.

However, we will only achieve this by taking action to open up the sector. Given all the delays and missed deadlines, we believe that only a formal separation of BT from Openreach, combined with fresh competition and a concerted ambition to deliver will now create the broadband service that our constituents and businesses so rightly demand.”

The report itself does not appear to represent a detailed assessment of the market (only Ofcom can deliver that), but it does look at some of the most common complaints about the industry and then largely appears to accept them at face value, without doing a deeper analysis. Some of the data is also out of date and cannot thus be relied upon.

BT’s forthcoming 300-500Mbps G.fast technology also gets described as a “short term fix“, with the report claiming that BT will use it to “strain every last bit of profit they can from the outdated and struggling copper network.” The assumption is once again that the grass will be greener on the other side and that separation is the best fix, although this has yet to be proven.

Key Findings

• Openreach has so far received £1.7 billion in taxpayer subsidies to connect harder to reach areas of the UK to superfast services, but has repeatedly failed to deliver.

• Around 5.7 million people in the UK have internet connections that do not reach Ofcom’s ‘acceptable’ minimum speed of 10Mbit/s. 3.5 million of these people live in rural areas.

• Poor internet connections are costing the UK economy up to £11 billion per year.

• 42% of SMEs report experiencing problems with their internet connectivity and 29% also report poor service reliability.

• Following the announcement that BT will be merging with EE it has been calculated that BT will have a 40% share of the retail telecoms market and a 70% share of the wholesale market.

• The time has come for BT to be forced to sell off Openreach to encourage more competition and a better service for every internet user and for the benefit of the UK economy.

In fairness we don’t entirely agree with the first point (or some of the others due to shaky data) as, for all its faults in other areas (e.g. BT’s dominance of contracts, lack of support for altnets, overbuilding etc.), the Broadband Delivery UK programme has made reasonable progress and is still delivering a significant boost to national superfast broadband connectivity (example). A pure fibre (FTTH/P) network would have taken many years longer to roll-out, required many billions more of investment and would have also struggled to reach rural areas (except via altnets).

Sadly the report doesn’t set out a detailed plan for what should replace Openreach or indeed explain how the new structure might be able to deliver where BT has allegedly failed, which is again an area that seems to have been left up to Ofcom.

Funnily enough one of BT’s most outspoken critics, Chi Onwurah MP (Labour’s Shadow Minister for Culture & the Digital Economy), isn’t named on the report, but ISPreview.co.uk did manage to catch up with her for a comment yesterday. Onwurah actually worked with Ofcom as part of their last Strategic Review in 2005 and so has some unique insight.

Chi Onwurah MP told ISPreview.co.uk:

The structure of BT/Openreach is a complex issue, I worked on it as Head of Telecoms Technology for Ofcom during the Strategic review of Telecoms ten years ago. As we saw with the splitting and then re-integration of the Baby Bells, creating a sustainable separate entity can be difficult.

As such it is not a decision best made by politicians but for the competition authority and the sector regulator. I believe Ofcom need the political cover to make the best decision in the interests of consumers and business in the UK, without being intimidated by phalanxes of lawyers.

I regret that this Government does not seem to be providing that cover, with Ed Vaizey almost acting as BT’s mouthpiece at times. I also believe strongly that competition delivers the best outcome for consumers and businesses and that the market is suffering from a lack of competition in the provision of superfast broadband.”

On the consumer side BT is often perceived to be the evil empire of UK telecoms, which is the price that most big businesses tend to pay for being so dominant and having such control. But for all their faults they have also done a lot of good service delivery, even though we tend to expect considerably more.

However if Ofcom is to replace the incumbent with a new approach then we can only hope they design one that delivers something better and fairer, albeit without dramatic price rises or slowing down the delivery of faster connectivity. Easier said than done; all eyes towards Ofcom.

UPDATE 5:24pm

BT has issued a statement in response.

A BT Spokesperson said:

We take any criticism seriously but we think this report and its recommendations are misleading and ill-judged. Independent data from Ofcom, the EU and others repeatedly place the UK number one for broadband and superfast broadband when compared to other large EU countries.

90 percent of UK premises can already access a fibre optic broadband connection. That will soon climb to 95% and above. We understand the impatience for progress to be even faster, but improving broadband is a major engineering project that involves contending with all manner of physical and geographic challenges.

The idea that there would be more broadband investment if BT’s Openreach infrastructure division became independent is wrong-headed. As a smaller, weaker, standalone company, it would struggle to invest as much as it does currently.”

UPDATE 27th Jan 2016

Better late than never, here’s a Gigaclear quote.

Matthew Hare, Gigaclear CEO, said:

The BDUK program is delivering Superfast upgrades to hundreds of thousands of properties. But MPs are understandably frustrated by what they see as a lack of progress in addressing poor broadband in their rural constituencies. The BDUK upgrade by BT has been designed to give a speed boost to superfast to as many homes as possible: the “inside-out” approach.

This has left those who started with the worst broadband performance generally still without good broadband. And they are not shy to tell their MPs that they are unhappy. In the areas that Gigaclear has been selected as supplier, we have agreed to build out Gigabit FTTP networks to better than 99.9% of the properties currently not getting superfast service – a comprehensive and future-proof solution, eliminating broadband woes.

Leave a Comment
101 Responses
  1. Avatar FibreFred says:

    A good use of taxpayers money then, total duplication of something already being looked at in detail by Ofcom.

    1. Avatar Noel says:

      If you want to know what BT thinks of the customers it serves so poorly, listen to the BT Press Office talking after they thought they’d put the phone down.

      A total disdain for customers with legitimate complaints about terrible service and awfully slow speeds is not acceptable.

      BT-Openreach’s appalling customer service has been suffered too long, the length and breadth of these isles.

      It’s time to follow the lead of France, Spain, Ireland, Portugal and many other EU countries and go to a full-fibre network.

      We can afford it, and we can’t afford to not have it.

      Break up BT-Openreach. Let our national telecoms infrastructure be free of BT Group’s anti-competitive, self-serving strategy.

    2. Avatar FibreFred says:

      Yep I’ve heard it:

      “A total disdain for customers with legitimate complaints about terrible service and awfully slow speeds is not acceptable.”

      – No that isn’t what is on the recording, they are mocking the title of the report, that’s it, nothing more nothing less

  2. Avatar FibreFred says:

    I’ve yet to read it in full but already it reeks of amateurism.

    “Broadbad” oh dear, professional?

    And the opening line is

    “Who is the British Infrastructure group”

    Who is?

    Surely who are?

    1. Avatar Steve Jones says:

      Not that it’s exactly relevant to the conclusions of the report but, the use of group in the singular is acceptable. Group is a collective noun, and as such it can be used singularly or in the plural depending on whether the verb addresses the whole or the individual members.

      There are some factual errors. For example, “BT has so far received £1.7billion intaxpayer subsidies to roll out superfast broadband to harder to reach rural areas”. In fact the amount shown in the accounts is about £700m to date. There will, of course, be more to come as BDUK rolls out (and payments are made on results), but they might at least get that right.

      The figure of 10mbps from Ofcom is a recent one, and has never been a formal target so how on earth can it be a failure? The same with BDUK. Rather than magic political claims out of the air, they ought to have looked at what was contracted. If politicians over-promised, that’s their issue. Perhaps they should have paid a bit more attention to BDUK when it was setup.

      Using EBITDA as a profit figure is simply ridiculous. Dropping off depreciation might make some sort of sense if all capital expenditure stopped. The fact is that Openreach are a capital intensive company (which retail operators are not). As such, depreciation will be very high and will (in the long term) roughly match capex (which is what is happening at the moment – OR capex is currently a bit above depreciation). There’s also a strong statement that the profits have come from the state subsidy which is, of course, wrong. The profitability comes from the core network (not just the copper network, but leased circuits) and any profit from the GEA/FTTC side under BDUK is marginal or non-existent at the moment. BDUK was set up as a gap-funding, essentially to cover shortfalls in revenue and with the “claw-back” mechanism to recover excess subsidies. The BDUK funded infrastructure is not part of BT’s assets in on the balance sheet (the BDUK grants are netted from capex).

      Nowhere in this report is there any acknowledgment that there is infrastructure competition across about 60% of the population which is planned to rise to about 70%. Nowhere does it consider why one company (and in their proposal a separated OR) would somehow be enabled/incentivised to roll out FTTP to areas that other operators consider uneconomic. Nowhere does it consider why other operators don’t take up the opportunities that it seems to think are there.

      Nor does it consider the issue of speed and resources for deployment. There simply isn’t a trained workforce large enough to do what they are proposing (a national FTTP network) in a tolerable time period. Certainly no network operator is going to take on what would be a workforce of around 100 thousand (which is the back of the envelope calculation I made for a 10 year programme) to do this. We are already at the point where we can’t build enough houses, in large part due to lack of skilled labour. Certainly OR (a £5bn turnover company) couldn’t afford to employ that number of extra workers.

      The biggest issue with the report is that it really gives no clue as to what this will change or how it would improve things. Openreach would be a £5bn a year company yet, somehow, they think that this can finance a £20-25bn investment including subsidising areas which are not commercially viable. It does not explain how this will increase infrastructure provision (or how it would promote infrastrucure competition which Grant Shapps was keen on judging by his performance on R4 this morning). It does not explain how that will suddenly become profitable or how the market conditions would change to enable it. Openreach’s incentives under the current regulatory regime would be precisely the same. No investors are going to stump up £20bn for a fibre network and a complete swap-out given Ofcom’s approach which is to encourage competition in the cheap to service areas without any incentives for NGAs. The incentive will always be to invest money in the most cost effective manner to give the best possible chance of a return. A separated OR would still want to use g.fast and other hybrid technologies due to cost, speed of roll-out and the ability to get revenue as soon as possible. In trying to compete with VM, it’s inconceivable that an FTTP network could be deployed into urban areas fast enough (even if the capital was available). Hence the emphasis on g.fast in urban areas. Relatively fast to deploy with minimal disruption. Rural areas are, of course, a different issue, especially where the basic economics are unfavourable.

    2. Avatar FibreFred says:

      Agree with your comments Steve the report is full of holes, knock together a dodgy report full of errors by non experts using computer press and newspapers as source material discuss it with rural based mps and get the backing you need

      Waste of.money

    3. Avatar Steve Jones says:

      Given Grant Shapps reputation for socket puppery, self-editing his Wikipedia entries and so on, then I wouldn’t give much for his paper being more than a propaganda piece without much addressing of the actual practicalities or attention to an accurate presentation of the position.

      I think Chi Onwurah has the best approach. That is the politicians set the policy priorities (as they did with BDUK, even though they don’t seem to have realised what they were agreeing to) and then let the professionals examine the issues, do the analysis and come up with solutions. Once we have politicians setting technical solutions, then we know we are in trouble. Most of them probably are pretty clueless on that matter yet seem to want to dictate it.

      We see this sort of stuff with parliamentary committees all the time. Politicians grandstanding and playing to the audience, often without any real idea of what they are talking as they don’t have the time or inclination to go into the detail.

      None of this is to say that there aren’t real problems with businesses and individuals who have real problems, or that it is the politician’s job to deal with these issues. It’s more than simple-minded bandwagon jumping like this using spurious and superficial analysis bypassing the experts is a recipe for a mess. We might look at the expensive mess of the Australian NBN or, closer to home, the consequences of the way that the railways were privatised. MPs could very easily make an even bigger mess in this area if they refuse to listen to the analysts and force their own half-baked notions onto the industry (lobbied by a lot of vested interests as well).

      If they only set the priorities and let Ofcom come up with the options (which might well involve some unpleasant surprises in the form of public money requirements and/or unpopular levies) then I’d have a bit more time for them.

    4. Avatar Steve Jones says:

      I meant “sock puppet”. From where in my head id “socket” come from?

    5. Avatar Steve Jones says:

      nb. having praised Chi Onwurah, I’ve read up a bit on her. She has a degree in electrical engineering from Imperial College, which happens to be where I graduated (in physics). No wonder she speaks some sense…

      In contrast there is very good evidence that Grant Shapps (or at least his office) edited his Wikipedia entry to remove unflattering information, presumably hoping it won’t be detected. If true, it shows both a technical naivety and a lack of integrity.

    6. Avatar GNewton says:

      @Steve Jones: While the BIG has its flaws, especially the usage of older data, do you at least recognize that Openreach and BT has some serious issues?

      How would you address the Openreach / BT issues, in view of the fact that BT is one of the worst rated companies in the UK. How would you finance a widespread fibre network in the UK without burdening the taxpayers, and without strengthening a near-monopoly company?

      BTW.: Who will own the BDUK-funded infrastructures / assets if not BT? Or did I misunderstand you on that point?

  3. Avatar dragoneast says:

    Although it’s refreshing to hear an MP acknowledge for once that those people who know what they’re doing should be allowed to get on with their jobs; what’s this “I also believe strongly that competition delivers the best outcome for consumers and businesses”. Oops, has she spoken to her Leader yet? Who wants to renationalise the railways, to take out what little competition there is; and keep any competition out of the NHS???

    Why do I get the impression that the only competition most MPs know about is that for who can shout the loudest?

  4. Avatar bob says:

    Separating Openreach from the main BT group is sensible. There are two main options. BT Openreach is floated as a separate wholly owned BY Company or BT Openreach . I would be inclined to go for the first option at least initially

    I see lots of people calling for renationalizing the Railways but that could be difficult as the Railways are already state owned and Railtrack is a wholly owned government company. The services are contracted out but that’s an EU requirement

    Many people seem to think the Railways are still state run in Germany but that’s not correct In Germany the Railways are run a bit like TfL. The services themselves being contracted out in fact National Express operate a number of German Railway services

    The big problem with the railways in the UK is no one actually manages the overall service EXCEPT for London Overground

    1. Avatar Steve Jones says:

      There is an extremely good case that the separation of the rail infrastructure from the operating companies has been financially disastrous. There’s a lot of finger-pointing (whose responsible for later trains etc.) and the short franchises for the operating companies means that they can’t buy their own rolling stock for fear of being left high-and-dry should they lose the franchise. So the rolling stock is all leased (and if you want to see where money is being made in the rail industry, the companies leasing rolling stock are a good place to look).

      There is one part of the system where the operating company has more control over the rail infrastructure, and that’s the Chiltern Line. It’s still owned by Railtrack, but the relatively long franchise and Chiltern Railway’s finance have meant that rail services and lines have been developed rather more symbiotically.

    2. Avatar Ivor says:

      Network Rail (not Railtrack) is indeed state owned and has control of the stations and rail infrastructure.

      It isn’t an EU requirement that it must all be contracted out. It is an EU requirement that operations and infrastructure be separate. but can have common ownership. The rail equivalent of the BT/Openreach relationship would be acceptable.

      The main complaint about investment is for things that are within the control of the train companies – e.g. station and train refurbs, or new trains entirely. The state could make long term investments in the infrastructure if they like.

      But this scenario wouldn’t exist under a newly separated Openreach, because there is no operations monopoly. Any ISP can offer any service Openreach offers to them, but with rail, there is practically a monopoly on operations. If you live in Cornwall you’ll likely be getting an First Great Western train, as you have no other choice.

      Chiltern is not owned by “Railtrack”, it’s owned by Deutsche Bahn and uses Network Rail’s lines. It has helped pay for certain line upgrades itself.

  5. Avatar wirelesspacman says:

    The only real conclusion I would draw from this is that politicians love to open their mouths but are loathed to (or more likely, unable to) engage their brains! 🙂

  6. Avatar themanstan says:

    What the politicians have failed to answer in their report is that there is no advanced national network, because they enacted legislation that prevented BT from rolling out that sort of infrastructure…

    1. Avatar GNewton says:

      For how long now has BT not been prevented any more to roll out fibre?

    2. Avatar Steve Jones says:

      It was back in the mid 1980s when BT offered to change to an all fibre network if it was allowed to offer TV services (as that was seen as the only viable way of paying for such a network). The government decided that they preferred infrastructure competition and did this via exclusive geographical franchises which conferred a monopoly on fixed line TV services. The government got their alternative network, but it turned out to be a financial disaster for the cable companies and the original investors essentially lost the great majority of their money (and banks had to write-off parts of loans or convert to equity stakes). In any event, there is a cable network that was consolidated.

      So why can’t it be done now? Simply because the financial and infrastructure situation are wholly different. The cable network is there, if needs must it can charge at marginal operating rates which puts a distinct ceiling on line pricing (just as the copper pair network puts a ceiling on cable pricing). So the scope for revenue increase from a fibre network is very limited (GEA/FTTP is charged at the same rate as GEA/FTTC for the same rates). Also, this was before local loop unbundling which has essentially removed much of the technical and commercial control of the network. BT simply can’t rip out copper, even if it wanted to, due to products (like MPF) which it is compelled to offer. LLU operators have invested money in exchanges as it’s simply not possible to arbitrarily withdraw services. Even what is carried over the access network (in technical terms) is controlled by an independent body (the NICC who produce things like the ANFP).

      In the 1980s, BT also had a much bigger control of the its network, it only had to interconnect for voice services and could essentially set technical standards on its own network. The government had gone down the infrastructure competition line and BT was free to deal with its own network on its own terms.

      However, a revolution happened. LLU was imposed, a larger amount of the control of the access network was taken over by Ofcom and the technical bodies that report to it and its now tied down with an immense web of SPs with direct access.

      In essence, we are not in the position that we were in at the time of privatisation and the setting up of the cable franchises. The opportunity has passed and the goalposts moved by changed regulation. We are were we are.

    3. Avatar Chris says:

      What Steve said,
      The noise makers seem to think it’s a simple matter of mating some cables together and job done. There’s a lot more to it than that & it’s a testament to the initial design that we get any type of speed out of the current topology. ADSL was not even thought about when the initial copper was laid yet we are now using that medium for unintended uses and people are complaining its not fit for purpose yet are not willing to pay the true costs for ad hoc fttp services.

  7. Avatar hamish says:

    lol wont improve the openreach cowboys and there shoddy work

    1. Avatar Norstar says:

      “their”

  8. Avatar dave says:

    This would kill off BT sport as bt would have no financial advantage over other isps so they would not be able to offer “free” BT sport. As a result sky sports would cost less and sky tv packages may reduce in price again. Line rental may possibly go down but unlikely. There are certainly a lot of advantages to openreach splitting but who would buy it out and what obligation would they have to roll out fibre?

    1. Avatar themanstan says:

      Splitting OR would not need anyone to buy it.

      It would a be a “demerger” so new company shares would be issued to existing BT shareholders.

    2. Avatar Steve Jones says:

      Why would BT retail still not offer their sports package? BTR’s business has to be profitable on its own (did you not see the margin squeeze test that Ofcom did on the package?). BT Sports is not subsidised by OR (something which would be clear from the accounts).

    3. Avatar Gadget says:

      The decisions of BTRetail about how they balance their books have no impact of the financial performance and obligations of Openreach. If BTSport makes commercial sense for BTRetail it will continue regardless of Openreach being part of BT Group

  9. Avatar terrencem says:

    It’s unsurprising that such a foolish and half baked should come from a body under the leadership of a publicity seeker like Grant Shapps (aka Michael Green, aka Sebastian Fox).
    He should stick to tinkering with his Wikipedia page rather than fiddling with thing he clearly doesn’t have a clue about.

    1. Avatar terrencem says:

      foolish and half baked *idea* .
      Whoops!

  10. Avatar dragoneast says:

    Constituents are unhappy = Politicians need to find someone to blame.
    Blame Openreach = Change OpenReach.

    That’s about as far as the average MP “logic” goes.

    Next!

    1. Avatar James Body says:

      Agreed. I am not sure HOW breaking up BT Openreach is actually going to help UK in the short to medium term.

      What is needed today is to get a lot more fibre into the ground linking ALL UK businesses and homes. What we need is legislation that FORCES BT to deploy FIBRE (not squeezing the last dregs of performance out of aging copper – and if you are unlucky – aluminium cables) to everywhere it is needed. Oh – and can somebody tell BT that the practice of hanging fibre on telegraph poles is just not good enough – poles are an unsightly and above all unreliable ‘third world’ way of providing physical connections which might have been acceptable in the 19th/early 20th century – but I think that we can do better today…

      Next – we need to bulk up our national 4G/5G network such that ALL of the UK is covered be at least one working cell. With widespread use of multi-operator neutral-host small cells, possibly overflown by airborne cells (such as those aboard the Facebook Aquila UAV – https://www.flightglobal.com/news/articles/facebook-unveils-42m-wingspan-aquila-uav-415331/ )

      Summary: FIBRE for static users; LTE for mobile users; 100% UK coverage mandated by Universal Service Commitment.

    2. Avatar FibreFred says:

      So…. is already expensive to deploy FTTP even if urban areas never mind rural, now you are saying not to use poles? So basically dig everywhere?

      Can anyone see an issue with that plan?

    3. Avatar GNewton says:

      @James Body: “I am not sure HOW breaking up BT Openreach is actually going to help UK in the short to medium term.”

      According to Ofcom’s digital communications review:

      “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.”

      Of course, there will be challenges. E.g. it may not fully address some concerns relating to Openreach’s service quality, or it’s level of future investment decisions.

      But in any case, it’s good to see that even MPs are now starting to realise that there are some fundamental issues with Openreach, which is more than we can of some posters here!

      Yesterday night’s BBC Look East news highlighted some of the Openreach issues it currently experiences in the southern parts of Norfolk. I think BBC Radio Norfolk will describe them in more detail this coming Monday morning. In one example, a rural business in southern Norfolk ordered 6 copper lines, they were quoted a 12 weeks installation time, it turned out to be a whole year! That was just one case of sheer incompetence and severe staff shortage. There are countless examples around the UK.

      BT itself (the customer facing part) has the poorest possible rating on Trustpilot. In about 25% of these reviews you can see the involvement of Openreach in it (reviewers mention ‘Openreach’, ‘engineers’, ‘line faults’, etc).

    4. Avatar Steve Jones says:

      So, pray tell, how are you going to force a private company to spend £25bn on installing fibre without even considering the immense costs of burying all the existing network? Yes, you can try passing a law, but there is not the tiniest, tiniest chance that any bank or shareholder is going to put up the money without which precisely nothing will happen.

      Now if you could come up with a regulatory framework by which it could be paid for, then maybe. But simply passing a law which would simply drive a company into the insolvency courts isn’t going to help anybody.

      So, how do you propose to force bankers and equity investors to do this? Pass another law forcing them to do it?

    5. Avatar GNewton says:

      @SteveJones: “drive a company into the insolvency courts”

      Actually, that could a blessing in disguise. In that case, someone else would have to do the job (after all, telecom services are still needed). This would only be bad news for shareholders (who should have known the risks before buying BT shares), but a win-win situation for almost everybody else. For many people, anything but the current Opereach is probably better.

    6. Avatar FibreFred says:

      For most people it would be better that openreach goes bust? Way to speak on behalf of a country

      And who would step in to take over from gone bust openreach? And where are they now why arn’t they competing right now?

      Your comments are comedy gold “someone else would have to do the job” of course that openreach style organisation of 1000’s of trained engineers sat on the sidelines waiting to jump in 🙂

    7. Avatar themanstan says:

      @GNewton

      OFCOMs sound bites hint at their own fallibility in creating this mess.

      The basic question needs to be answered…

      Would additional competition is brought to market by OR being separated?

      So what market forces does a separate OR bring that would improve competition?

      Would it encourage VM to expand their network there by increasing competition? Unlikely, VM enjoys walking up to the line of SMP and stopping, which reduces the investment burden as they don´t have to SLA on capacity that would be required in wholesale. If they did, then SMP would certainly have to be applied. VM being vertically integrated can cross-subsidise their business.

      Would OR increase investment in network? Only where commercially viable, so no real change there. If forced via regulation, would that improve things? No, it would cause the wrong type of competition. Smaller independent networks would find themselves in competition with OR, lose market share and not become viable businesses. The first companies in insolvency courts would be these small network ISPs not OR. Remember this infrastructure is capital intensive with long ROI, revenue is critical to these small ISPs.

      Only 6 years… everyone else (countries) have had a 5 to 9 year lead… in terms of national infrastructure projects 6 years is a very short period of time, certainly without substantial government support from the outset (e.g. S Korea, NZ, etc…)

    8. Avatar Steve Jones says:

      @GNewton

      So the master plan would be to drive OR into insolvency by forcing financially unsustainable requirements on the business? Then, as with Railtrack, the bankrupt company will be taken over by the state so it can be run in the same manner (Railtrack being £38bn in debt at the moment with simply enormous budget overruns and late deliveries). You think that is going to help? (I’ll leave aside the little issue of legal intervention on engineering such an insolvency).

      Or maybe you think another private company would take over the assets given the unsustainable commercial basis of such legislation. Well, good luck on that.

      This is all insanity. If there are political policy goals to be achieved, then fine, but the regulatory environment has to be in place to make it achievable. Stupid ideas like forcing companies to implement major national infrastructures without giving any thought to its financial sustainability is just placing everything onto the road to disaster.

    9. Avatar GNewton says:

      @SteveJones: Thank you for your thoughts.

      Why would an Openreach under an insolvency administration be as bad as Railtrack? You can’t compare 2 different things.

      Mine was a serious question. The pension deficit has grown (£7 Billion at the moment), and most posters seem to believe that Openreach would be the one to carry the bulk of these pension burdens. I was not talking about driving Openreach into insolvency on purpose via legislation. But a potential insolvency is not an impossible scenario. What would prevent Openreach (or BT) from using the insolvency threat as a kind of nuclear option, to extort more money from the public?

    10. Avatar GNewton says:

      @themanstan: “Smaller independent networks would find themselves in competition with OR, lose market share and not become viable businesses.”

      Who are these independent networks? And if they exist, how are they in less competition with Openreach still owned by BT today? As opposed to the future when Openreach is independent?

    11. Avatar themanstan says:

      @GNewton

      Every single rural specialist ISP (Gigaclear, Call Flow, etc…).

      These are the networks which currently only have OR ADSL to contend with, if they had OR which was forced into provision for all, then they would suffer.

  11. Avatar Ignition says:

    Hmm.

    Has Mr Murdoch gotten at Mr Shapps?

    Both have profited heavily from the work of others, after all. Natural match.

    1. Avatar Steve Jones says:

      I think it fair to say there has been lobbying…

  12. Avatar FibreFred says:

    I suppose in some respects its to be expected.

    Thatcher meddled and stopped a fibre rollout when there was an appetite to do so, its taken years to rectify that and only now are we starting to see some decent services with others such as G.Fast on the horizon.

    Let’s interfere again, split off Openreach and during the years of legal wranglings investment in G.Fast and FTTP stops, sale goes through, no-one invests in OR (TT won’t Sky… doubtful, Virgin not a chance) they fail to get any funding from elsewhere, current prices rise to try to drum up extra cash, G.Fast doesn’t progress even after sale neither does FTTP as there’s no money to do so. Openreach and its current products (FTTC/ADSL) are stuck in limbo and people start to outgrow them with no-where to go.

    End Result, a lot worse than it is now with no viable widespread alternative apart from Virgin media

  13. Avatar Al says:

    Call me selfish, but how would a split benefit me as the end user. Surely that is the only question that needs to be answered How will a split benefit the end user, and by end user I mean every user no matter if they live in a commercially viable area or not.

    As for complaints surely some of those are down to how the BDUK rollout went, rather than targetting those with the slower speeds they went for coverage so even years into the BDUK rollout many of those that needed the investment BDUK would bring more are still waiting for it. If you are on a decent 21CN exchange getting 10+Mbps you might not feel the need to upgrade comapred to those on Sub 5Mbps 20CN excchanges. So the 20CN exchanges along with those 21CN cabinets serving buildings a long way from the exchange should have been targetted first.

    Have yet to see any benefit from BDUK (it’s coming hopefully by summer) but that’s down to BDUK not BT. As such haven’t had a speed increase in almost a decade, it was the same in the days of dial-up had to wait years before broadband came to replace it.

    Will it result in lower prices to the end user, I doubt it.

    Sky, TT, VM et al can complain as much about OR as they like, but I don’t see them rushing to create a rival network that covers as much of the UK as OR does.

    1. Avatar Mike says:

      Exactly what they did in my area, upgraded all the cabinets that already had decent speeds, leaving the rest at the mercy of BT.

  14. Avatar FibreFred says:

    Another thing I’ve not seen anyone mention or consider is that openreach don’t just provide residential broadband they provide a lot of business ethernet circuits and a whole host of other high speed services aimed at businesses, there is nothing wrong in terms of competition in that area so how does that work then, some people (mostly competitors ) moan openreach is failing on residential broadband but that is only one part of their operation.

    1. Avatar Al says:

      Living an a non-LLU exhange as far as I am concerned all providers are falling me.

    2. Avatar wirelesspacman says:

      “there is nothing wrong in terms of competition in that area”

      cough, splutter…!

    3. Avatar FibreFred says:

      There’s good competition in the leased line market in the UK

  15. Avatar James Body says:

    “90 percent of UK premises can already access a fibre optic broadband connection”

    I wish that BT would STOP calling services delivered over copper wires ‘fibre optic’.

    The vast majority of BT customers are enjoying(?) broadband delivered using VDSL over copper.

    1. Avatar TheFacts says:

      As are the customers of 24 home and 62 business ISPs.

      VM says it’s fibre.

    2. Avatar wirelesspacman says:

      BT only claim copper twisted pair is made out of glass because the ASA accepted VM’s claim that coax is also made out of glass.

    3. Avatar GNewton says:

      You can fibre broadband almost everywhere in the UK:

      FTTE (Fibre-to-the-Exchange)

      There you go, problem solved 🙂

  16. Avatar dragoneast says:

    Perhaps the advantage is that neither Ofcom nor the Competition and Markets Authority will want to be seen to be giving in to political pressure. Nor, I suspect, will BT who see themselves as a technology company, not an arm of government.

  17. Avatar Colin says:

    It should be noted that Openreach does not have a presence in Northern Ireland. BT Ireland basically looks after all operations including the same functions as Openreach on the mainland. So, will there be a split within BT Ireland?

  18. Avatar gerarda says:

    As full of holes as the report may be I think it reflects a frustration that money spent on what started as a project to improve rural broadband has turned out not to have delivered to many of the worst served areas and as a result the postbags/inboxes of the MPs in those areas are full of complaints. To quote one of the MPs on the Public Accounts Committee
    “For my constituents who will be within that 10%, you have no idea how much it will cost. You have no idea when it will be delivered, and you have devised
    a scheme that makes it less likely for those people in rural areas where the transport infrastructure is particularly bad—one bus a week in some of my
    villages—and where the case for having superfast broadband is strongest. It is in our remotest areas with poor transport links that we should be targeting the
    scheme. You have designed a scheme that actually makes it least likely that my constituents will get it. You cannot tell us that that is value for money,
    because you have no idea what the cost is”

    This was aimed at DCMS but the suspicion that BT were complicit in the design of the scheme adds to the reasons, justified or otherwise, that they need to be brought to heel.

    1. Avatar Dave says:

      I agree. After years of promises of superfast broadband for rural areas, I still have no reliable broadband connection, sub 1mb/s and no mobile connection. With no prospect of ever getting it. Except in 5 years time with a USO. But this will no doubt be met with a useless satellite service and a £350 bribe.
      So as far as I am concerned BT and BDUK have not delivered and are not going to.
      Nothing is going to change, people with broadband are to get even faster broadband and people with no broadband are to get nothing and pay more for it.

  19. Avatar FibreFred says:

    I’m not sure what is more worrying to be honest, that Grant Shapps an elected MP has put together such a flawed report or the fact that 121 MP’s backed the flawed report.

    Think of how many other flawed reports like this and policy changes as a result of them there must have been!

    I’m not surprised the country is in a mess

    1. Avatar dragoneast says:

      Yep, it’s how politicians and the media work (and always have). Generate a head of steam so no-one can see through the resulting fog, and then just plough on regardless.

      I’ve long has this dream that we could limit them to one budget meeting a year, then pack them off to do something useful (if that’s possible). The rest of us could then get on with it.

  20. Avatar Mike says:

    Openreach soon to become the next Network Rail…

    1. Avatar GNewton says:

      @TheFacts: I looked at your link. Your comments are quite mistaken at places (the same is true for these MPs!). Your notion that nothing but re-nationalising BT will lead to a nationwide fibre is a bit out of place here. So were your ideas about a government-funded nationwide fibre you posted in ISPReview about a year ago.

      Do have any realistic proposals on how to sort out the Openreach mess, to start with?

    2. Avatar FibreFred says:

      Which comments are mistaken?

    3. Avatar GNewton says:

      @TheFacts: Apologies, I just noticed you aren’t the author of the document referred to in your link.

      So my questions should be answered by Ignition (aka Ignitionnet on TBB).

      However, my last question still is for you: How would you sort out the Openreach mess?

    4. Avatar Ignition says:

      I do have ideas and will put those in the blog.

      I didn’t say nationalisation was the only route to nationwide FTTP I said it was the only route to avoiding unintended consequences.

      Obviously the government could subsidise Openreach to deploy rural FTTP also.

      Not happening on a purely commercial basis.

    5. Avatar Ignition says:

      As previously requested by another poster I would appreciate explanation of where I was ‘quite mistaken’.

      I am sure there are errors in there. It was a fair body of work.

      Thanks.

    6. Avatar FibreFred says:

      I was hoping he would post the “mistakes” before he realised his own (venting at wrong author) but as he now knows its you who wrote it and not his pet hate I doubt he’ll post them.

    7. Avatar GNewton says:

      @Ignition: Thank you for sharing your thoughts with us. I am happy to post some of the points on your blog when I have some time off work.

      Please ignore FibreFred, he has accused me of doing fake reviews or of identity misuses in his defamatory jokes so I’ll ignore him till Mark Jackson deals with it.

    8. Avatar Ignition says:

      I guess work was so intense the opportunity didn’t present itself.

  21. Avatar Patrick Cosgrove says:

    It is a dodgy report instigated by a dodgy character, but it’s raised the profile of an issue that was starting to take a back seat which is helpful. I think any solution in the short term (which is what’s important in places with dreadful provision still) will be determined by what the new EU State Aid regs say is or isn’t permitted. My understanding is that we’ll know more about this within a month or two. Can anyone confirm that?

    1. Avatar gerarda says:

      It does not help BT’s case when their CEO then tries to spin the BBC with equally dodgy statements such as “over 90% of UK premises could access superfast broadband.” and “with Openreach now testing internet speeds of 500 megabits per second using copper”

    2. Avatar dragoneast says:

      I’m not sure it’s quite so simple as what the state aid “rules” are. The rules that come out of Europe deal with principles, and as always the devil is in the detail, specifically how they are interpreted by Westminster civil servants and, ultimately, by case law in the Courts (if they get that far). As for when, that’s a “how long is a piece of string” question.

      I suppose, being a crowded island, we are very “rule based”, and “rules is rules”, which has always caused problems when European law crosses the channel. Not that I would expect things to change very much even if we “leave” the EU, given the interlinking of international trade. The single market is designed to benefit business, not the consumer. Fair enough if one thinks about it, it’s business that makes the money for everything else we want.

      I still think the biggest impediment to progress in the UK is, as it has always been, that we are simply mean with money. We want the benefits (and moan like hell when we don’t get them) but we aren’t prepared to pay for them. The only way to “square the circle” as it were, is (a usually half-baked) compromise and that great English creation, the queue. There is no pot of gold at the end of the rainbow, and whether its BT Openreach or we make it anything else we like, the economics don’t change.

      But we’re British, so we’ll just talk about it, endlessly. And hope that some Harry Potter comes up with a magic solution. The politicians, and even the Regulators, will play the game; as they always do.

    3. Avatar Steve Jones says:

      @Dragoneast

      The single market isn’t there’s to support business and provide nothing for the consumer. It’s designed to help economic activity and provide a better deal for consumers by getting rid of the sort of local restrictions that reduce competition. For example, it made it very difficult for car companies to enforce differential pricing by countries as it allowed personal importation. It was also designed to eliminate local protectionist measures thereby increasing competition, widening choice and reducing prices. Many countries had cosy little local monopolies, often enforced through regulations, which lead to higher prices being charged with poor service.

  22. Avatar bob says:

    The report highlights the way forward and how BT’s monopoly on the local loop can be broken. installing second local loop is not a viable option

    1. Avatar TheFacts says:

      With no second local loop why would the company owning the first not be a monopoly?

    2. Avatar Ignition says:

      No it doesn’t. It doesn’t document in any way how separating Openreach from BT Group will break Openreach’s monopoly. It repeatedly confuses vertical integration with natural monopoly.

  23. Avatar GNewton says:

    BTW: BT are pretty contemptuous and dismissive of the entire issue called to attention by the cross-party MPs call for an Openreach split. They (BT) appeared simply not to care about it. See for yourself: https://audioboom.com/boos/4096465-bt-press-office

    1. Avatar AndyH says:

      And you genuinely believe it?!

    2. Avatar FibreFred says:

      Contempt and dismissive ? Is there a different recording I missed I simply heard them mocking the title?

    3. Avatar Ignition says:

      I can’t say I blame them. They mocked the logo and the timing of the release, a Saturday morning, quite rightly.

  24. Avatar Neil says:

    “Ed Vaizey almost acting as BT’s mouthpiece at times.”

    There is no almost about it, the same way the mouthpiece here is worried about his shares and pension.

    1. Avatar Noel says:

      Agreed Neil.

      It’s time for Openreach to start working in the national interest and not just in the interests of BT Group.

      Ten years ago, BT should have been broken up.

      It’s about time they were – over to you Ofcom.

    2. Avatar Steve Jones says:

      BT is a private company with assets owned by shareholders. The duty of directors (enshrined in law) is to serve the best interests of the shareholders. It’s the bedrock of western companies.

      Of course if you care to make the point that there’s common interest in serving customers, then fair enough. But there are limits. Companies are not charities and, if an investment is not going to earn a return, then it will not be made. All those who depend on companies – investors, pension funds, employees, governments (who need the tax from profitable companies) will lose out otherwise.

      If you want a non-profit company (like Railtrack), I would suggest you lobby your Ms to find the money to buy the stuff all back, but given that there will be a bill of over £20-25bn, before the state can even think of investment, then good luck with that one.

    3. Avatar GNewton says:

      @Steve Jones: How much of the profits made by Openreach (after taxes, expenses etc) goes to the shareholders? If not all of it, where does the rest go?

    4. Avatar Sunil Sood says:

      @GNewton

      BT’s latest accounts say that Openreach made £1,252 million profit and funded Capital Expenditure of £1,082m

      Capital Expenditure is funded out of profit which leaves £169m for everything else including shareholders – not much of a return when you consider Openreach’s annual revenue is 5,011m before operating costs and taxes

  25. Avatar LBH says:

    Some very balanced views expressed here, in particular from Steve Jones, some of the rest however are so far removed from reality that one can only take a view of them based on specific and very narrow agendas. Some people would benefit from emigrating to the more rural areas of continental Europe or even the USA to appreciate the highly competitive, relatively low cost, widely enabled broadband telecommunications market in the UK not withstanding the current and in my view where it should stay Openreach situation.

    I live in very rural Dorset, in a place where I do not even get a terrestrial aerial and I have been watching HD tv through my bb service (from BT) all day….

    Having had some limited experience of MP committees I would not be inclined to allow most of them to run the country never mind let forth on anything remotely connected with the digital world. As for the so called complainants, would any serious person allow TalkTalk to have anything to do with the security of the UK digital future, they cannot even protect their own customers. As for Sky at least we know where they are coming from but does anyone out there think they will make any significant investment to facilitate the level required by a diverged Openreach, they have their hands full already trying to claw back very soon the £5B three year investment they have made in more overpaid footballers and foreign club owners. Maybe they want to pursue a strategy of chaos so they can make us believe in better and have to pay much much more.

    We do not have, like circa 7M other properties, have the benefit of mains gas and would anybody out there help with a project to force Ofgem to hold a major review to force those responsible for the gas pipes to undertake a major GUUK (gas up UK) programme

    1. Avatar Ivor says:

      As a fellow LPG-ee I don’t consider mains gas to be as important.

      There is nothing I can’t do with LPG that a mains-gasser can do. I just have to be mindful when buying gas appliances, that it is either fitted for LPG or can be converted. Plus the inconvenience of changing the gas bottle every so often (could have a tank but it’d take up too much room).

      That’s quite different from expecting modern, capable broadband infrastructure that reflects the reality of quality internet being an essential utility.

      It’s like saying “well you could use a generator, so why do we need mains electricity”.

  26. Avatar dragoneast says:

    Does the whole saga have more to do with the future of Ofcom, than with the future of BT? If Openreach are a sea of treacle, then Ofcom are in it up to their scaggy neck. It’s their creation. Part of their single strategy to make broadband cheap. It isn’t; see the rest of the world. Something has to give. (Hint: everything else).

    So are Ofcom drinking in the last-chance saloon? Sort it out, or someone else will sort you out.

    It never was part of a Regulators job to try and run the business for BT to this extent. Ofcom play a political game, they want to try and, if not come up smelling of roses (that’d be impossible), then at least not covered in the manure. They’ve got a struggle on their hands. And, if it all goes **** up, then their fingerprints are all over it. The great British public will forget, they can’t even remember what happened last week. The government won’t.

  27. Avatar TheFacts says:

    More here – http://www.bbc.co.uk/news/technology-35399030

    Clearly these MPs signed without understanding the document. Worrying?

    1. Avatar GNewton says:

      Thanks for the link. It has some good statements in there, such as:

      “We need to examine what other countries are doing to see if lessons can be learned from the likes of Sweden and the Netherlands, which seem to be getting it right. ”

      or

      “Thomas says that it would still be a natural monopoly with shareholders who might be even less likely to sanction increased investment. But some competition economists believe that, as a part of BT, Openreach feeds some monopoly profits back to the parent group and these would instead be available for investment in fibre.”

      Carl Thomas (aka IgnitionNet or Ignition) has published his reply to the cross-party group on his blog which this BBC article refers to.

    2. Avatar Jonny says:

      I fail to see how Openreach profit currently returned to BT Group would be re-invested in fibre deployment if Openreach were a completely separate entity – surely those profits would just be returned to shareholders?

      The way to change what Openreach do with profits is to ensure there is a genuine competitor that they are required to out-build, and as mentioned hundreds of times already this is unlikely to happen simply as a result of Openreach splitting away from BT Group.

    3. Avatar Ignition says:

      http://s7.postimg.org/5ggl3rgor/Silly_MP.png

      Forgot that Peterborough is also a CityFibre Gigabit City.

  28. Avatar Sunil Sood says:

    Worth remembering that both the prices that Openreach charge and the associated profit margin are actually set by Ofcom to avoid Openreach making excessive profits

    1. Avatar GNewton says:

      The BIG report say that Openreach generates 50p in earnings (before interest, tax,
      depreciation and amortisation) for every £1 of revenue, referring to the link at http://www.cbronline.com/news/telecoms/carrier/bt-reports-best-ever-quarter-for-openreach-amidst-revenue-dip-4570948

      Is this a wrong figure then?

    2. Avatar Sunil Sood says:

      How to put this? Its misleading to quote the earnings before interest, tax,
      depreciation and amortisation (or EBITDA) figure as an example of what Openreach’s true profitability is.

      However, quoting such a figure (50%) makes it sound that Openreach is making excessive profits/has a fat profit margin which is useful for those wanting to bash BT like the authors of the BIG document.

      EBITDA is not a financial measure recognised in accounting standards – its main use in real life is to compare different companies, especially if they are based in different countries.

      In any business the actual operating profit is only determined after interest, tax,depreciation and amortisation are all deducted (they are not things they can avoid) – and in a capital intensive business (which is what Openreach is – as it has lots of equipment to maintain) these are very large figures.

      BT’s last annual report shows Openreach had an EBITA figure of 2,600 million before depreciation and amortisation costs which equalled 1,348m leaving an operating profit of 1,252m

      From this figure, financing costs, capital investment and taxes still need to be deducted and I suspect the pension deficit before you get to dividends – but its not in the BIG authors interests to state that.

      Part of Ofcom’s remit when regulating prices is to make sure the profit margin is not excessive.

    3. Avatar GNewton says:

      How does this compare to other infrastructure companies like Network Rail or National Grid?

    4. Avatar Sunil Sood says:

      No idea.Do your own research? But remember that not all infrastructure companies are equal.

      For instance – off the top of my head:

      1. National Rail and the National Grid are effective monopolies – as are the water firms. Openreach has competition in at least 50% of its market (the profitable bit)
      2. Different firms/industries are allowed different rates of return by regulators. For instance, I don’t believe Ofcom count BT’s pension deficit in the prices Openreach charge. Other regulators do allow that to be included in their calculations.
      3. There will be differences re: the period of time new Capital investment lasts.
      4. Different firms face different financing costs. Railtrack effectively went broke as it couldn’t afford to upgrade the network.
      5. The rate of innovation and new products/technology in different sectors is different.

      etc.

    5. Avatar FibreFred says:

      Gnewton you have been given a detailed answer and you respond with a question that isn’t even a real question how does your question about ebitda comparison with other companies even make sense it isn’t valid for any company.

      You are evading to save face

    6. Avatar GNewton says:

      @Sunil Sood: Thank you for your thoughts.

      The BIG report refers to The Guardian at http://www.theguardian.com/technology/2015/sep/14/bt-broadband-fibre-optic-slow-speeds.

      The latter also claims this:

      “But on fibre it’s different. Openreach is easily the most profitable division within BT, generating about 50p in earnings before interest, tax, depreciation and amortisation for every £1 of revenue. Such anomalies suggest either a monopoly, premium pricing, or both. That’s not right for a business that should be supplier-agnostic and building a new network based on fibre rather than copper. (By contrast, Network Rail’s operating margin is 30% or so; National Grid about the same.)”

      I thought it was a bit dodgy, certainly more research would have helped in this.

      BTW.: Please ignore the other poster on this thread, he seems to have a personal grudge against me, having accused me of submitting negative fake reviews or using false ids in his defamatory jokes.

    7. Avatar MikeW says:

      Note that the guardian article finishes with a correction, because it originally stated that Openreach “operating profit” was 50p in the £1. The correction obviously changes it to EBITDA.

      However, the references to national rail & national grid still refer to their operating profit, as far as I can make out.

      It seems that, while the paragraph was corrected factually, it left it making a nonsense comparison.

    8. Avatar Sunil Sood says:

      @GNewton

      Thanks for your reply and the link to The Guardian article.

      Having read it, it doesn’t appear particularly well researched article to me – and I am sure the authors of the Broadbad report could/would have chosen others if they supported their view.

      The article makes several claims which are inaccurate including:

      “BT still effectively controls their pricing via BT Openreach” and “Such anomalies suggest either a monopoly, premium pricing, or both.”

      Ofcom set the prices that Openreach can charge – so BT don’t control the pricing. Also, Ofcom – who have access to Openreach’s books – set them at what an ‘efficient’ operator would charge.

      No business is ever as efficient as economic theory suggests they should be – hence part of the reason for the cost cutting measures Openreach keep having to make. As explained, the prices include an assumed profit margin so the statement suggesting “monopoly, premium pricing, or both” is also wrong.

      I recall reading here about the failure of BDUK Devon and Somerset to agree terms with BT over stage 2 – its not something I am familar with but I don’t think that was all down to BT (were EU timelines also a factor?) and I believe BDUK Devon and Somerset have held a meeting with lots of potential suppliers since.

      As before, its dodgy to compare operating profits/EBITA figures between different industries, the economics of which are quite different. Finally, its never a good sign when an article states “This article was amended on 15 September 2015. An earlier version said Openreach generated about 50p in operating profit for every £1 of revenue.”

      I think people just have to accept that their are parts of the country where it is uneconomic to commercially upgrade to fibre.

      At a guess, its commercially sensible for 60-70% of the country to get FTTC, 50%? to get G.Fast and a lot less for FTTP – and that the deeper the fibe is the more expensive and longer it takes.

      If one was doing a new network that would be different but not when it comes to upgrading existing ones – especially given that CP’s or the public are opposed to higher prices.

  29. Avatar Reg Morris says:

    I believe Ofcom is 15 years behind in security compared with USA who caught the bankers red handed in libor scandals and inside trading.While we have opposition
    talking 10 years ago is out of touch with reality. Why has Rt Hon. Mr Grant Shaps MP
    inendated with complaints about BT open reach and the lousy deal from Ofcom who in fairness to Ofcom haven’t been given the power required by Parliament.Can you see any other country in the world having Telephone exchanges crown buildings were BT
    are like the they investigate themselves then when you complain pass you to Ofcom
    were they are in a straight jacket to resolve serious criminal actions inflicted on your phones. The average payout is currently £110 and new maximum is now £10000 from £5000 only 12 months ago the upgrade. If you use the service you can’t sue in a higher court. One thing i have experienced BT group operate a two tier service with no concern for small business unless you are members of elite running the country. The world has certainly changed the threat is the cyber and telephonic crime easily implemented on your lines and most crime can’t be detected because it has from the inside of the industry The questions that need to be answered why is BT group and Open Reach separate organisations. Have you ever tried contacted Chairmans office from Open reach impossible same as BT but they will send you back to faults with that crazy music blazing. The other serious question i want to ask the laptops in open reach vans are not checked properly and their is areal problem.The third and final problem is if an engineer pirates your leads to a third party and does untold damage he will never be caught and the police have very few cps prosecutions around the country relating to cyber and telephonic crime like finding a needle in a haystack and thats the problem.How is it possible for an open reach engineer to not fill a claim form when you have a persistent fault its all done locally testing properly the other way is to remote. We need to move to the 21st century not the Victorian setup when originated time as stood still here. i have so many issues to discuss but alas you are sent around the houses by personnel who should no better. The more you complain the worse experience you will receive just no end to a suitable compensation claim.Victims have no were to go while the UK has been asleep and can we trust this enquiry especially Bt group has been rubber stamped taking over EE just before this enquiry funny world is’it I wish Rt hon. Mr Grant Shaps MP making a decision which will suit all parties not the chosen few 111 cross party MP’s cant be wrong!

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