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ISPs TalkTalk, Sky, Vodafone Launch New “Fix Britain’s Internet” Campaign

Wednesday, July 27th, 2016 (9:52 am) - Score 2,708

Several major Internet providers and other organisations, including TalkTalk, Vodafone, Sky Broadband, XLN and the Federation of Communication Services, have today launched a new campaign that encourages business to criticise the quality of Openreach’s UK network as part of Ofcom’s Strategic Review.

It’s fair to say that TalkTalk, Sky Broadband and Vodafone had mixed feelings about the proposal put forward by Ofcom yesterday (here), which once again stopped short of delivering full structural separation of Openreach (BT’s network access division) from the BT Group. The ISPs see this as the best way to deliver a strong, fast and fair national broadband network.

By comparison Ofcom viewed full separation as a complicated, lengthy and financially risky model, although they’ve continued to leave the option on the table in case BT refuses to meet their demand for Openreach to also become a “legally separate company” and for it to be able to have confidential discussions with its customers without oversight by BT.

In keeping with that it should be no surprise that BT’s rivals have today moved to ratchet-up the pressure again by launching the Fix Britain’s Internet campaign, which encourages businesses to join and voice their frustrations over the quality of Openreach’s national broadband and telecoms network.

Dido Harding, CEO of TalkTalk, said:

“For too long, UK businesses have been let down by the nation’s broadband infrastructure, receiving poor speeds and even poorer service. How is the UK economy supposed to grow and compete with the rest of the world with one hand tied behind its back by failing broadband?

Ofcom’s proposals simply don’t go far enough, and we know many people up and down the country feel the same way. This is a once-in-a-decade opportunity for them to tell the regulator directly they don’t want a halfway house for another decade, they want truly radical change now.”

Saeed Sheikh, MD of Accounts at XLN Telecom, added:

“Openreach has continuously failed to meet ours and our customers’ expectations thanks to its appalling service levels. 10 working days to connect customers to the UK’s telecom network is just far too long – the business world moves much faster than that.”

The new campaign suggests that British businesses are being “badly let down by the current system” and complain that it’s “simply not right that businesses have to wait weeks, months, and in some case years, to access to the high-speed, reliable connectivity that is critical to success in the modern commercial world.” As such it views Ofcom’s final consultation as a “once in a decade opportunity” to tackle the problem by fully separating Openreach from BT.

On the other hand Ofcom believe that their approach “resembles full structural separation in its outcomes, without requiring the full divestment of Openreach by BT Group” and that this model, when combined with their new service performance targets and other changes, should tackle most or all of the complaints by competitors, albeit without going the whole hog.

The fact that this new campaign also helps to shift the perception of blame for all things connectivity related onto Openreach’s shoulders, including perhaps those bits of an ISPs network that are not beholden to Openreach, is possibly another fringe benefit for the aforementioned providers.

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45 Responses
  1. Avatar New_Londoner says:

    Hugely ironic to see this “campaign” from three companies that:

    1) Can’t even be bothered to invest in fit-for-purpose cyber security for their own network, and certainly doesn’t have the cash to invest in national infrastructure;
    2) Has publicly said it wont invest in UK-wide infrastructure; and
    3) Has consistently underinvested in its own fixed on mobile networks and as a result has been losing market share for years, and is decamping from the UK in the aftermath of the Brexit vote.

    Hard to take any of their views seriously, especially those from one of the above that consistently seems to make things up!

    1. Avatar Roger says:

      Such biased bitter comments! anyone who did not know better could not be criticised for thinking that you may have worked at some time for BT, maybe live on a BT pension or may even possibly own BT shares! Comment on the content and learn to live with the fact that other posters may have a different view than your own!

    2. Avatar New_Londoner says:

      @Roger
      So please clarify which of the comments in my post is inaccurate.

    3. Avatar Apolloa says:

      Agreed, I know one who tried and failed at test building its own cabinets and infrastructure, it was dropped as it was too cost prohibitive… So they cry like baby’s at the one company who has invested billions, along with tax payers money, to build a network. Of course Open Reach have milked their profits from the handouts by only laying fibre to the cabinet, but that’s a million miles more then what the others have done to improve the network.

  2. Avatar Stuart Andrews says:

    Instead of wasting money on the HS2 & HS3 high speed link, better to invest money on a modern fibre network & incourage companies to get more people into working from home.
    Think of the time saved on commuting,happier staff,etc, & reduced rush hour traffic.

    1. Avatar 3G Infinity says:

      No need for that, just don’t waste 12bn installing ‘smart meters’ that no one wants, that government can’t economically justify in trms of savings on energy consumed, etc.

      That would do nicely for a contribution to a fibre network, starting in rural areas!

  3. Avatar FibreFred says:

    Groan….

    How about fixing it yourself Dido with your 10 million premise FTTP rollout.

    If you want a job done right………………..

    1. Avatar MikeW says:

      This is a bit I find constantly funny.

      Dido keeps telling us how great their ambition is for a 10 million-home FTTP network, with pricing already set to undercut any Openreach equivalent. But in another breath, she demands that Openreach be split and improved.

      Why on earth would she want to encourage the one company that would be a natural competitor to her FTTP plans? A natural competitor with predatory instincts.

      Is she cannily trying to set up a situation where a standalone Openreach would fail in the face of her FTTP network, and bring the ISPs that depend on it to their knees?

      Or is the whole FTTP thing a bluff?

    2. Avatar FibreFred says:

      What Dido wants is plain to see, not that you would know that in the press. On the BBC news yesterday it showed how rivals Sky and TalkTalk were building their own FTTP network in York, look at us!

      It did however fail to mention Sky were not going to take it any further and were signing people up to it at or possibly below cost, with TalkTalk doing similar on costs nor did it say that the York rollout was beyond painfully slow and to reach 10 million customers would probably take until 2099 or later.

      Cityfibre are no good for Sky and Talktalk because they have to actually pay (yes pay!) them to do the work, as crazy as it sounds.

      We all know what she and Sky want

      They continue to cry to Government/Ofcom/Whoever will listen to pressure BT to install FTTP at their own cost across the UK regardless of whether there’s profit or not.

      Get BT to take the hit on the cost and then once enough traction is in place start to offer FTTP packages on the BT provided FTTP, then a year or so down the line start to complain again about the costs of this FTTP provision and say they can’t compete and Ofcom should make FTTP cheaper meaning that a crippled with costs BT get crippled for an even longer period as the ROI period jumps by many decades.

      No risks, no investment and whilst your biggest rival is out of money you can jump in and take their customers.

      Quite simple, quite transparent

      I can see it, shame those that should be able to cannot.

    3. Avatar Steve Jones says:

      It’s simply in TalkTalk and Sky’s interests to damage BT Group as much as possible and they will, of course, resent every penny they spend with OR. Of course they’d still resent every penny they spent with OR too, but Sky (in particular) do not want to see a strong competitor in the content and sports rights market. Sky, in particular, have bruises from the last Premier league auction where they paid way over the top (from memory about twice what BT did per game) for their tranche of matches.

  4. Avatar NGA for all says:

    There is nothing here or in Ofcom’s proposal outlining the extra investment needed or desired. If it is a substantive FTTP plan over 25 years, you probably need an incremental £300m a year on top of the current £250-£300m squeezed from the existing investment envelope. Some of this could come from setting a sunset date for telephony but more would be needed. There is no suggestions linking cost recovery to setting investment levels.

    You would think that Talk Talk would say something like, we spend e.g £600m a year with Openreach and think it appropriate that some of the profit on that expenditure is spent on the network, and not spent against us via BT sport. You could even estimate the combined profit from these folk and see what proportion of the margin could contribute to improving the network.

    1. Avatar FibreFred says:

      Are Openreach profits spent on BT Sport?

      25yrs? That’s a long time, what % of the population will that cover, any rural?

    2. Avatar NGA for all says:

      Fibre Fred @ There are competing for the same funding and Openreach is generating significant profits, so directly, indirectly it is occurring.
      Same with the £258m owed to BDUK/LA, while in BT accounts it is not being invested where it was intended, so it is being used elsewhere until handed over or converted into coverage which may take another two years. Ditto for the BT capital contribution.
      25 years is 750k to 1m lines a year. I was trying to illustrate the scale of the requirement and that is not insurmountable, but the ambition does need to be in Ofcom’s proposal.

    3. Avatar TheFacts says:

      @NGA – reasonable to assume a FTTP roolout as you describe would not start with the final 5%?

    4. Avatar FibreFred says:

      Directly/indirectly

      You mean like Sky spending a fortune on TV and barely anything on a fibre rollout?

      BT spend millions/billions on both TV and Broadband, can Sky or TalkTalk say the same?

      Of course not

    5. Avatar Sunil Sood says:

      @NGA It’s note the business of a customer to say where any ‘profits’ a supplier makes should be invested – whether that is Openreach or another firm.

      You have to remember that Openreach’s prices and thus its profits/margins are subject to Ofcom’s controls.

    6. Avatar MikeW says:

      @NGA
      A “substantive FTTP plan”. A nice, liberal idea. Good for the country.

      If you want Ofcom to embrace a “substantive FTTP plan”, you need to take account of a couple of problem areas…

      1) To get a real, national, organised FTTP plan, Ofcom would have to embrace Openreach/BT as part of the solution.

      Unfortunately, Ofcom currently see Openreach/BT as part of the problem. And that the solution is to embrace /more competition/ as an anti-BT measure.

      One source of the problem is that Ofcom can only have an effect *anywhere* by regulating the one company with SMP. Their rules of engagement pretty much require them to be anti-BT at all times.

      In the end, Ofcom can’t engage BT as part of a national plan. They can only engage others, and hope that it forces BT to do something different.

      2) Ofcom believes that “deployed FTTP” is the sole measure of the country’s progress towards ultrafast (or at least presents itself that way). It presents lists of countries who had earlier ultrafast ambitions than the UK who, of technological necessity at the time, had opted for FTTB and FTTP.

      This stance takes no account of the increasing capability of twisted pair copper (via G.Fast and its future amendments) nor the increasing capability of coaxial copper (via Docsis 3.1 and future amendments).

      Ironically, the list of countries with significant FTTP is almost an accidental artifact. Now that progress as been made on G.Fast (and sibling G.hn), the countries with high FTTP deployments are turning to the newer technologies too.

      Yet Ofcom’s stance entirely ignores any progress (toward ultrafast speeds and gigabit speeds) that technology improvements brings to the UK’s access infrastructure. It ignores the change of stance in the other countries too.

      How can Ofcom hope to embrace a “substantive FTTP plan” when it fails entirely to take account of a shifting landscape upon which such a plan would stand?

    7. Avatar Steve Jones says:

      BT Sport is funded out of BT Retail earnings. As long at BT Consumer is in profit (as the accounts clearly show), then there is no sense in which OR is funding BT Sport. Or perhaps you know something different about the state of BT Consumer division’s profitability.

      Any business case for OR funding has to relate to OR only. If there’s a business case to be made, then funding would never be an issue (although resourcing would be).

    8. Avatar NGA for all says:

      @MikeW BT Group are hard to embrace.
      I looked to see what Ofcom new ambition was but could not find it quantified which is problematic. I assumed it would be a mix of G.Fast and FTTP.
      So what is going into the NGA cos recovery then? The FTTP ambition will have to be in there to create the cost recovery to cover the investment needed. Is that correct? How can you not engage on that matter?
      Competition on FTTP is either VULA based or PIA+ and Dark fibre at the other extreme. VULA FTTP ambition is covered in the cost recovery,..ISP FTTP using PIA and Dark Fibre is a direct negotiation between ISPs and Openreach using whatever inputs have been agreed.
      2.) The answer to 2 is above. It is resolved in the industry forecasts which may include any ‘national’ objective.

    9. Avatar NGA for all says:

      @Sunil, You could understand that say Sky,Voda, Talk pay c£2bn in fees to Openreach. It is not unreasonable to arrange from a regulatory perspective that any fraction of profits for investment from those fees is not diverted to Retail in whatever indirect form?

      The prices include or assume a certain amount for re-investment. That bit needs to stay within the division, or from an ideal sense.

    10. Avatar NGA for all says:

      @Steve – virtual accounts yes, but the funding is coming from the same pot where say the £258m owed to BDUK and LA’s sit and will sit for some time. Investment decisions are not taken in isolation of each other.

    11. Avatar TheFacts says:

      @NGA – Where has this word ‘fees’ come from?

    12. Avatar karl says:

      It has already been proven from BTs own mouth that investments are shared between Openreach and the BT Group.

    13. Avatar Steve Jones says:

      @NGA

      First of all the SPs (which also includes BT Consumer) don’t pay “fees”. They pay rental. However, more importantly, there is no sense that OR profits are somehow paying for BT Sport. Have you not looked at the annual reports? BT Consumer is profitable (and Ofcom have even performed a margin squeeze test). In short, it pays for itself and is part of what BT Consumer presumably believe they need to invest in to maintain and develop that part of the business. If BT Retail was being run at a loss then the regulator would be down on them like a ton of bricks.

      You also need to look at the annual report too. OR had a turnover of £5.1bn out of a total group turnover of £21.5bn, or less than 24%. However, BT OR was responsible for £1.4bn out of total group capex of £2.6bn, or 54%. How about operating profit? OR made £1.3bn out of group operating profits of £3.8bn, or around 34%.

      In 2015-16 OR was responsible for 25% of turnover, 34% of operational profits yet 54% of capex. So your evidence that OR is subsidising capex by BT Retail is where?

      All numbers net of any input from EE.

      nb. of course OR is the most capital intensive part of BT group, but the figures above do not tell lies.

    14. Avatar NGA for all says:

      @Steve .OR creates cash flow. The whole group benefits from that cash flow. The OR capital numbers need to factor in the level of labour. BT Group manages the cash allocations. At a minimum access to that cash flow will help fund any bids.
      Cash Flow turns to profit and profit is reinvested by Group.
      A simple example is the £258m capital deferred owed to BDUK. This is not currently being used to build network and unlikely to do so for another two years, so it can be used by BT Group however it wishes. You cannot say there is no benefit. There is nothing stopping that money being used for football for a while however it is represented in the accounts. It is certainly not going on Broadband at the moment because BT can keep invoicing against the budgets available.

    15. Avatar Steve Jones says:

      @NGA

      Of course OR generates free cash flow, but that’s a figure reported before capital expenditure is accounted for. Take that £1.4bn off an it makes a huge dent. Then there’s the outflow required for the OR contribution to dividends, pension deficit, group finance costs and so on.

      BT consumer also produces strong cashflow and it spends much less on capex. Overall the business is stronger with good cashflows (or it would have to borrow more), but it in no way means that the BT Sport venture is not paying for itself by increasing turnover. Openreach’s turnover increased from £5bn to £5.1bn last year (2%) whilst BT Consumer’s turnover increased from by 7% to £4.7bn. It did that with a fraction of the investment put into OR (£206m capex vs the £1.4bn of OR).

    16. Avatar karl says:

      http://www.ispreview.co.uk/index.php/2015/09/sky-attacks-bt-openreach-for-not-spending-enough-on-broadband.html

      The comment from Mr Williams sounds to me like cash flow is shared within the BT group which includes Openreach. Openreach are therefore not separate and in no way independant, which is half the problem and what others are complaining about.

    17. Avatar FibreFred says:

      You mean this deduction?

      “Naturally BT’s Group Director of Strategy and Policy, Sean Williams, has been quick to rebuff Sky’s remarks as “plain untrue“, adding that “no investments have been diverted away from Openreach. BT Group has played a vital role by investing £10.5bn of capital in to Openreach over the past 10 years.”

      The key word is invest

      If Openreach had a ton of profits that could be spent on BT sports, why would BT Group invest 10.5bn in Openreach?

      Openreach doesn’t make a lot of profit, it needs to be provided with money, quite simple really.

    18. Avatar karl says:

      Explain again how they are functionally separate if they are playing pass the parcel with each others cash back and forth? People on the news item i linked to seemed confused.

  5. Avatar kds says:

    I know why sky is doing it as they dont like other companies bit for sports we need to kill sky monopoly on sports

    1. Avatar karl says:

      You just need to find someone to fund the billions on rights that F1, Cricket, Football and more cost to fulfill you fantasy. BT are not gonna do it, they have not even shown the Football premiership in full since BT Sport started let alone the other sports. Half the time BT Sports is nothing more than a chat like channel about sport rather than showing it.

  6. Avatar chris conder says:

    Leave Openreach alone, you can’t fight their massive legal dept and their multimillion pound marketing department. BT group will hang on until they have leeched the remaining assets from their obsolete phone network, cornered the content market and the mobile networks, then they will hand it over no trouble at all. The government will then have to pay to do the job properly with real fibre. The best solution is to support alternative networks like gigaclear and hyperoptic. Then watch openreach up their game. Competition is the only incentive. The cities would still be on dial up if it wasn’t for Virgin.

    1. Avatar FibreFred says:

      I don’t support your other comments Chris but on this:

      “Competition is the only incentive”

      You are right, most people say the same but Ofcom can’t see it and Sky and TalkTalk certainly aren’t interested.

  7. Avatar chris conder says:

    Thanks Fred, competition is certainly King. It has proved it where I live, as soon as an altnet started to build, bt cabinets started to appear.

    1. Avatar FibreFred says:

      Yep it’s what drives other sectors and this one is no different, true competition comes from people putting their own wires out there. Some do which is great we just need the big fakers like talktalk and sky to do the same so we have more competition.

    2. Avatar fastman says:

      chirs more disinformation as ever

      B$RN never completed the OMR — Lancashire needed to get solution so went down BDUK route –cabs don’t just appear !!!!! they take about a year to schedule and build !!!!!

  8. Avatar danni says:

    It is a shambles of a network they shouldn’t class fibre when its not and should replace all cable to there home then people would see decent speeds . we are the worst for poor internet

    1. Avatar FibreFred says:

      Yet when you see league tables that compare broadband we are not the worst at all.

    2. Avatar New_Londoner says:

      @danni
      Based on league tables, we are clearly not the “worst for poor internet” (assuming you really meant to say broadband speeds?). Effective use of grammar and the English language is however another matter!

  9. Avatar Codger says:

    This web site appears to be the stalking ground of so many completely blinkered BT apologists that any attempt to have a sensible engagement is a total waste of time, shame.

    1. Avatar TheFacts says:

      What would you like to discuss?

    2. Avatar GNewton says:

      @Codger: I completely agree. One poster shows symptoms of Prosopagnosia and keeps calling other posters “trolls” on a regular basis. And TheFacts keeps asking strange or irrelevant questions, he even suggested a nationwide FTTP all paid for by the government 1 1/2 years ago, totally estranged from reality.

    3. Avatar fastman says:

      this board is bereft of sensible engagement and reality and fact 1!!!!

    4. Avatar karl says:

      “One poster shows symptoms of Prosopagnosia…”

      Oh its well beyond just symptom stage ;D

  10. Avatar Paul Coombs says:

    All this talk neglects the simple fact that competition is nigh on impossible in utilities. Look at all the utilities that were privatised by Thather’s govenrnments and not one single one of them has a competitor in the distribution network. The Government have spent a fortune on regulators over this time because without regulation the nature of the delivery models means the big boys would kill off or aonsume the smaller oporators and then they’d merge into single industry entities before fleecing their customers mercilessly.

    That said, the telecoms infrastructure in the UK is not only streets ahead of all other utilities, but is also one of the fastest and definatly most far reaching in terms of population covrage than anywhere else in the world. Yes, some contries boast larger FTTP coverage than the UK do, but only because the cities are bigger. Get out of a major conurbation almost anywhere else in the world and you won’t find fast or superfast BB let alone FTTP.

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