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UK ISPs Struggle with the Cost of Keeping 20CN Rural Broadband Alive

Wednesday, May 25th, 2016 (8:21 am) - Score 1,231
Andrews and Arnold Office

The MD of Andrews and Arnold (AAISP), Adrian Kennard, has warned that the cost of continuing to support customers that have few other options than to connect via an ‘up to’ 8Mbps capable ADSL line on BT’s old 20th Century Network (often present in rural areas), has become too expensive to maintain.

People in remote rural areas and some isolated urban locations, where broadband speeds can still be incredibly slow, often complain that they are forced to pay a higher price and yet still receive a slower service than if they were able to live elsewhere. It’s a long running and quite understandable gripe.

However delivering the necessary infrastructure and capacity into such sparse and small communities is disproportionately expensive, not least due to the fact that commercial operators like BT often face a dramatically longer wait for any return on their investment. This is why ISPs can charge significantly more if you happen to be stuck on a 20CN line.

Never the less BT has spent the past few years upgrading many of their old 20CN areas to the newer 21st Century Network (21CN) platform, which is a useful precursor to faster ‘up to’ 24Mbps ADSL2+ lines and more affordable capacity. In some 20CN areas it’s even possible to skip right to FTTC (VDSL) “fibre broadband” and forget ADSL2+ altogether.

Sadly some areas still have little option but to take a 20CN line (except for a rather unappealing Satellite alternative) and this is fast becoming difficult for smaller providers to maintain, unlike bigger operators where the economics of scale can provide a partial safety net.

Adrian Kennard said:

“The problem is made worse by the fact that BT charge a small fortune for back-haul for 20CN circuits. To put it in to context I could pay a transit provider that will guarantee no packet loss sending packets to thousands of interconnect points around the globe at a rate of under £1/Mb/s/month, but BT charge £138/Mb/s/month to send packets “best efforts” to a few hundred 20CN only telephone exchanges in the UK.

The big issue is that we have now got to the stage, after the latest batch of 20CN to 21CN regrades (which was around 1/3 of our remaining 20CN lines) that 20CN is making a significant loss for us.

We have worked out that on average, what we pay BT for the ADSL line and the bandwidth, is now around £60/month (plus VAT) per 20CN line. We have customers paying only £20/month on our older units tariff, £25/month on Home::1, and as little as £12.20/month where it is an extra line on units tariff. Yes, we do have people paying more for higher usage, but it is clear that overall we are now making a serious loss on the few hundred 20CN lines we have left.

We have to do something…”

The fact that AAISP is already a fairly expensive broadband provider, which prides itself on delivering a good quality of service and strong technical support, only magnifies the cost problem. Unfortunately none of the potential solutions are especially appealing, such as abandoning 20CN altogether (i.e. forcing subscribers to move elsewhere) or perhaps running 20CN based services under some sort of complicated non-profit model (i.e. customers would probably pay more and bills might become more confusing).

The challenges are by no means unique to AAISP and this remains one of the key reasons why even bigger ISPs tend to charge customers significantly more if they’re stuck in a 20CN area, although to date we haven’t seen many that have opted to abandon those users. However TalkTalk did recently sell off most of their old off-net broadband base, which caused a fair bit of anger.

Kennard has now asked for feedback and the initial responses appear to be mixed, with some suggesting that it would be better to abandon 20CN altogether and others pleading not to do it or to adopt the non-profit approach. Either way it looks like AAISP’s reputation may soon be tested.

At the end of the day we are only talking about an ever shrinking number of premises and around 97% of the UK should still be put within reach of BT’s superfast FTTC/P network by 2019 (the figure today is a little over 90%), but as ever there will always be a few left over.

The good news is that BT are still continuing to move old 20CN areas to the newer 21CN platform or FTTC/P, although the pace has slowed as the economic challenges rise. This is also one of the reasons why the Government’s proposed 10Mbps Universal Service Obligation (USO) is so important because it could help to provide a solution for such areas and encourage network upgrades, although even if it’s introduced in 2017/18 then the legally-binding measures might not actually be enforced until 2020.

UPDATE 8:25am

Adrian has noted that there appears to be a rebate for some of the 20CN bandwidth on 20CN only exchanges, which means that the ISP “gets a lot closer to breaking even than we expected, for now.”

However the reprieve may only last “for a few months” and the “underlying problem remains … so, at some point, probably this year, we have to come up with a solution for how we handle the last 20CN lines. Right now, we’ll leave pricing unchanged,” said Adrian.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he is also the founder of ISPreview since 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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8 Responses
  1. Ethel Prunehat

    It seems obvious to me – either increase prices until 20CN is profitable, or ditch the product. Alas it’s a bit harder for company with a reputation to defend to do this than it is for the likes of Talktalk.

    I am a customer of this reassuringly expensive ISP and I’d rather not be subsidising those on 20CN.

  2. 3G Infinity

    Its a double edge sword, BT is in total control of when 20CN disappears. Our local exchange is 20CN (no WBC etc) and will go direct to FTTC sometime between July ’16 and June ’17 with HCC money.

  3. MikeW

    BT are indeed in control of when 20CN disappears, but it looks like a lot of co-ordination is needed in what is left. It seems that a lot of the remaining 20CN-only exchanges just don’t have room for 21CN equipment to even begin to perform an upgrade.

    It appears that BT are going to trial a process where they have to disconnect all customers from a 20CN DSLAM, physically remove it overnight, fit a 21CN DSLAM in its place, re-provision everyone onto the new DSLAM, and have the whole shebang working by morning. All organised by BTW, no matter which ISP they are using.

    Once the first 20CN DSLAM has been removed this way, subscribers on the others can be moved over to the first 21CN DSLAM in a more leisurely manner, over 2-3 months.

    Administratively, this can lead to a shift in the way of doing things. In previous migrations, BT have to go through an admin process to give notice they will stop selling 20CN IPStream to ISPs on each exchange, then stop taking orders, then migrate people, then (after around a year), retire the hardware. And that can all be done after 21CN has gone live.

    For these small exchanges, they have to go through the admin process first, and stop taking orders a while before the migration day.

  4. Al

    Tonight is my last day on a 20CN broadband connection, as I go live with FTTP tomorrow. As has been highlighted in some cases it’s a case of not enough room at the exchange for the newer equipment rather than the number of customers. But isn’t this as much a failure of the BDUK project as anything, surely these exchanges that could not be upgraded due to space issues should have been at the head of the queue for BDUK intervention instead of being left towards the end of the rollout. And as the article points out this isn’t just a rural issue as it impacts some urban areas.

    So if you are unlucky enough to live on a 20CN you

    1.>Pay a higer cost (BT charges the same)
    2.>Get a slower speed
    3.>You exchange is likely not unbundled so you don’t have competition to drive down prices.
    4.>If you are an off-net customer you are more likely to be under traffic management where ISp’s favour their on-net customers.

    And I doubt if any ISP got rid of 20CN lines (due to their high costs) they would lower the price they charge to their other customers. Instead any saving would just increase their profits. Sure perhaps it might slower down any further price increases but then again due to competition they likely wouldn’t increase prices too much so as to avoid losing customers.

    The question is how would Ofcom respond.

  5. Colin

    Why not just scrap BT as a supplier where possible and buy another wholesale product. I believe many other small ISPs do this already via TT Wholesale and others.

    • Scott

      Whilst this is true, most of the “reseller” ISP’s that utilise TalkTalk Business as their primary provider also have an off-shoot that they use for the parts of the country where 20CN is the only option (such as BT Wholesale directly, or split WLR3 and SMPF providers).

      In all honesty, the UK infrastructure is in a terrible state. I’ve had the pleasure of working in telecoms for the last half-decade and even in that short length of time I’ve noticed major (negative) changes.

      Sure, we have the likes of more access to so called “superfast” FTTC – but the product itself is still very expensive, for ISP’s/resellers and consumers alike (meaning there’s very little profit for the companies if you want to remain competitive). With this, we also have the rollouts that are happening of FTTP, something which some of the big boys are exploring in certain, small areas of the UK (and in doing so, are cutting off the smaller companies from providing due to the copper in those areas being stripped out completely and FTTP not being a re-sellable product currently) – this greatly overshadows the apparent superfast speeds of a now aging FTTC product.

      The UK has a lot of changes they need to make, the ’20CN only’ exchanges being just one of them.

    • Karl

      If they wholesaled from TalkTalk where possible and only brought BT products where their is no alternative they could absorb the addition cost of the BT products as TalkTalk Wholesale is very slightly cheaper. Basically off set costs of one V the other.

      The only issue is what Adrian has touched on some time before and that neither BT or TalkTalk can seem to get a single bill right for their resellers.

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