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BT in New War of Words with Rival ISPs on the State of UK Broadband

Tuesday, August 16th, 2016 (12:39 pm) - Score 1,907
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The CEO of BT Group, Gavin Patterson, has blasted his rivals behind the Fix Britain’s Internet campaign (Sky Broadband, TalkTalk and Vodafone) for making “misleading statements” and using “Orwellian tactics” in order to argue that UK broadband services would improve if the operator didn’t control Openreach.

The three ISPs believe that Ofcom should be working to deliver full structural separation of Openreach (BT’s network access division) from the BT Group, which they claim would improve fairness in the market and enable an ultrafast future where old copper cables could be replaced by pure fibre optic (FTTH/P) services. But so far Ofcom has chosen to reject that approach (here).

As a result some of BT’s biggest rivals established the Fix Britain’s Internet campaign, which among other things argues that BT spends more on TV football content than it does on broadband infrastructure and that “nearly half of premises” in rural areas can’t get an Internet download speed of 10Mbps (Megabits per second).

Meanwhile Patterson’s letter, which has not been seen by anybody else except the FT (we did ask for a copy but were refused), claims that the campaign “paints an unfairly diminished view of connectivity across the UK and makes a number of misleading statements.” BT’s most recent financial report suggests that Openreach’s capital expenditure in the last financial year was actually much more than they spent on sports rights.

Furthermore BT states that only around 4.2% of households are actually unable to achieve 10Mbps and this gap is slowly being closed by the Government’s Broadband Delivery UK programme (e.g. fixed line superfast broadband [24Mbps+] coverage is expected to reach around 97% by 2019). The Fix Britain’s Internet campaign also appears to use some fairly out-of-date Ofcom data, which pegs the 10Mbps figure at 8%.

Over the coming weeks BT intends to fight back by using evidence based arguments against the campaign, which should be interesting. In the meantime the Fix Britain’s Internet campaign has issued a lengthy letter of their own, which unlike Patterson’s has at least been made available to the public.

Opening Letter Extract

Dear Gavin,

Thank you for your letter of 9th August regarding the campaign to “Fix Britain’s Internet“. We welcome your commitment to engaging in a debate on broadband, which remains critical to the success and international competitiveness of our country, both today and in the future.

Within this debate there is some clear common ground. We all agree, and your letter acknowledges, that the service Openreach provides today is unacceptable and must improve. There are too many faults, delays and missed appointments. Worryingly, Ofcom has found that this is getting worse in some areas, not better. Consumers across the country know this only too well, and by creating this campaign we want to enable their voices to join those across business, other organisations and even the Government, who are demanding meaningful change.

Looking ahead, we do not appear to share the same level of ambition for the digital future of this nation. We, as a coalition of Openreach’s largest customers, agree with Ofcom’s assessment that a network that still relies heavily on copper, with limited plans to roll out fibre direct to the premise, will not meet Britain’s needs in the future. We believe that the UK is capable of funding, building and deploying a truly world-class national broadband network that can stand shoulder to shoulder with other world leaders, supported by strong retail competition driving better consumer outcomes.

Our concern is that none of this will happen if Openreach’s strategy and budget remains controlled by BT Group. Not only will fundamental challenges to rapidly improving service to customers today remain; but without reform we will limit our ambitions and hinder the industry’s ability to play a greater role in developing the broadband infrastructure we need for the future.

We have serious concerns that, in contrast to separation, more complex regulatory intervention will not deliver swift and meaningful change. In the coming weeks we will be responding to the new Ofcom proposals for Openreach reform. But we also want to ensure that our customers have a way to more directly express their views, and we hope that the campaign to Fix Britain’s Internet can play a role in helping them do so.

In relation to the campaign statements you ask us to reconsider, we have done so and address your specific points below.

[Read the Full Letter]

The problem for BT is that it has become the default recipient for all negative feedback concerning the United Kingdom’s telecoms and broadband network, although plenty of that criticism is fair comment and if you happen to be living in an area where the only lines are of a slow connection via Openreach’s copper then who could blame them.

On the other hand independent data, such as from Thinkbroadband, does appear to show that superfast broadband speeds are now available to 91%+ of the United Kingdom and it’s hard to ignore that improvement, unless you live in the remaining 8-9% of course and have been waiting years for something faster.

Sadly improving coverage does take time and a lot of money. Similarly the UK is doing quite well for superfast broadband coverage in the EU (here), although a lot of other countries are now focusing on FTTP/H and thus our hybrid-fibre (FTTC/NFC) fuelled lead may struggle in the future.

Meanwhile Anna Soubry, the Government’s former business minister, recently suggested that such coverage figures were “flawed” and “meaningless,” which may or may not be true (estimates are always subject to a degree of error), but such accusations are often presented without providing correctly researched evidence to prove any inaccuracies.

In this case Soubry merely appeared to be reflecting a belief based on local feedback, which could just as easily have come from those in the final 8-9% where you’d expect plenty of complaints. Meanwhile the Government does claim to audit their own BDUK coverage data, although crucially we don’t get to see those audits.

Anna Soubry MP said:

“It looks like a good headline, but when you dig down and listen to people in the real world you get incredibly suspicious that it’s a meaningless statistic. The vibes I’m getting back from the real world are that this is not accurate. I don’t trust these figures at all … Diving into those figures and revealing them, which I was in the process of doing before I left Government, I think you will find will show that those figures are flawed.”

Of course one big problem for the Fix Britain’s Internet campaign is with their ability to prove that an independent Openreach could magically fix all of this and without hurting investment in alternative networks, service quality or significantly raising consumer prices.

Improving connectivity to rural and some disadvantaged urban areas is always going to be an expensive and time consuming process no matter who holds the reins, with neither Sky nor TalkTalk making any concrete pledges to roll-out FTTH/P to such areas. Instead BT’s rivals would be more likely to focus on the low hanging fruit of urban areas and adopt hybrid-fibre in rural areas, which funnily enough is not unlike the approach that Openreach takes today.

On the flip side Ofcom claims that their regulatory fix is as close to fully separating Openreach as you can get without splitting up BT, which avoids some of the claimed downsides. But as ever only time will tell whether the situation really improves and we’ll probably be back here to consider the same question again in 2025.

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Mark Jackson
By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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89 Responses
  1. Avatar Jonny

    I see nobody has warned them against using evidence-based arguments in 2016.

  2. Avatar dan

    shambles of a network in the uk compared to other countries and paying over the odds for a ornament for a home phone in lousy line rental

  3. Avatar fastman

    which other contires — where you get no choice and pay substntuall more

  4. Avatar karl

    £12+ Billion spent on gobbling EE
    Over £5 Billion spent on sporting rights since BT Sports inception (including almost £1 Biliion just on the Champions League which ITV at the time were showing anyway). We will not even get into what they paid for the Rugby.

    Pattersons response They have spent more on Broadband in the same amount of time? I thought legal highs had been banned.

    • Avatar Lee

      Who’d have thought a private company would be able to spend money on whatever they want? Shame on them for wanting to make money for their shareholders!

    • Avatar fastman

      Karl

      positive and objective comments as ever – so where are you in the UK !!!!

    • Avatar Gadget

      BT rolled out GEA to those areas it considered commercially viable in one of the fastest deployments of its kind. No amount of spend or lack of it for football rights or acquisitions alters the areas where GEA was commercially viable, in fact some could argue that content would increase the viability. So as the cash was made available to do what was commercially sensible what the rest was spent on was immaterial.

    • Avatar fastman

      also GEA started rolling out in 2009 (1.5bn original commercial programme then upped to 2.5bn to cover 66% of the UK population — so long before any football !!!!

    • Avatar FibreFred

      What does the capex say Karl, have you read it?

    • Avatar FibreFred

      “Pattersons response They have spent more on Broadband in the same amount of time? I thought legal highs had been banned.”

      Where is this stated? More trolling

    • Avatar karl

      “Who’d have thought a private company would be able to spend money on whatever they want? Shame on them for wanting to make money for their shareholders!”
      Shame on any Industry claiming to be private yet lapping up tax payer cash and spending that where they please.

      “Karl

      positive and objective comments as ever – so where are you in the UK !!!!”

      I fail to see why where i am matters, pick an area for yourself.

      “Where is this stated? More trolling”
      4th paragraph

    • Avatar FibreFred

      Oh karl / carpetburn / deduction , how long have you been trolling on this site? I would have thought by now you knew how to read an article. What you are referring to are the editors words (mark) the parts in quotes are from Gavin Patterson

      Unless you meant to troll mark?

      🙂

    • Avatar fastman

      Karl –your choice but I assume your happy with your broadband and no issues

    • Avatar Karl

      “What you are referring to are the editors words (mark) the parts in quotes are from Gavin Patterson”

      So they haven’t spent more on internet?? I guess thats the issue.

      “Karl –your choice but I assume your happy with your broadband and no issues”

      You do not need to know where i live and i certainly do not need advice from BT employees about my ISP choice.

    • Avatar FibreFred

      “So they haven’t spent more on internet?? I guess thats the issue.”

      No the issue is that you’ve been senseless trolling again and not actually reading the article

    • Avatar fastman

      Karl that’s funny

      because you have no idea what I do or who if work for and the fact I have no interest in any ISP — it was an offer around infrastructure provision

    • Avatar Karl

      Im quite capable of finding and knowing what ISPs are available where i live and i fail to see why you should know anymore than anyone else with online checks available unless you work for a specific ISP.

    • Avatar fastman

      Karl are you someone else and do you happen to be in Essex which used to have a railway tll 196o’s

    • Avatar karl

      Nope not in Essex and as stated do not require your help in choosing an ISP or what services are available for myself. You have no help to offer unless you are an ISP itself with access to information the public does not.

  5. Avatar Ignition

    All seems pretty pointless in the grand scheme.

    I genuinely have no idea why these guys are so obsessed with separating Openreach from the rest of the Group when separating Retail would be simpler, more logical, and could be done alongside a merger of Openreach and Wholesale, something BT Group already want to do.

    • Avatar wirelesspacman

      Makes quite a lot of sense Ignition – especially as Openreach hasn’t been limited to the “last mile” (copper or otherwise) for quite some time now. Having said that, it would still not resolve the massive issues the market has with Openwretch.

      What Openwretch really needs in my opinion is a massive kick up the wotsit to make it play fair and/or at least act like it is operating in a competitive marketplace. The middle managers who mis-run it should be sacked at the rate of one per week until those that remain catch on that customers really should be treated like customers and not like something they have just scraped off their shoes.

  6. Avatar fastman

    its all about margin for talk talk and sky nothing about investing — all about getting a better deal for them 1!!!

  7. Avatar fastman

    Wirlessscapeman !!! Openwretch really needs in my opinion is a massive kick up the wotsit to make it play fair and/or at least act like it is operating in a competitive marketplace. The middle managers who mis-run it should be sacked at the rate of one per week until those that remain catch on that customers really should be treated like customers and not like something they have just scraped off their shoes. – so if you not a CP’ not sure how you have any view on openreach managers

    actually the business has to operate in a n equivalent manner to all its communication providers it supports

    • Avatar wirelesspacman

      “has to operate”

      Correction: “is MEANT to operate”

    • Avatar karl

      “actually the business has to operate in a n equivalent manner to all its communication providers it supports”

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

    • Avatar fastman

      Karl to be clear

      actually the business has to operate in an equivalent manner to all its communication providers it supports”

      the link is nothing to do with equivalence and all to do with margin !!!!

      actually the business was able to deploy substantially more FTTC than the mix of FTTC and FTTP (due to the cost of FTTP)– so more coverage covered for the same 2.5bn funding envelope

    • Avatar Karl

      It obviously does not operate the same for all ISPs if Openreach and the rest of the BT group hand each other funds

    • Avatar fastman

      Openreach makes its own commercial decisions

      it deals with all CPs all 530+ in the same way and the same terms and same prices

    • Avatar wirelesspacman

      That is absolute rubbish fastman. They are meant to, they are under an obligation to, but they have decades of experience of doing the complete reverse.

    • Avatar New_Londoner

      @wirelesspacman
      Do you have any actual evidence to back that up, or is it just your opinion?

    • Avatar fastman

      wireless that is absolute fact —

      Openreach makes its own commercial decisions
      it deals with all CPs all 530+ in t
      he same way and the same terms and same prices

    • Avatar Karl

      Really so Openreach give money to other ISPs do they?

    • Avatar fastman

      karl openreach don’t give money to any one !!!!
      as I said we treat each service provider the same

      not sure why you think they might !!!!

    • Avatar karl

      Mr Williams from my link disagrees with you.

    • Avatar fastman

      slectvie posting again Karl

      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

      that money has gome from GBT Group into Openreach — it is not flowing from Openreach into CPs or any activity to fund CP’s

      so my point is correct we treat all CP’s equivalently at the same terms and conditions and prcing

    • Avatar FibreFred

      I’ve told Karl about “that link” before , he keeps using it but it says the exact opposite of his troll remarks.

    • Avatar karl

      Oh i see so BT treat every provider the same… Lets try this then, which other ISP or group is giving £10.5bn to Openreach?

    • Avatar FibreFred

      Your question makes no sense. Openreach treat other providers the same.

    • Avatar fastman

      Karl that money has come from Group Group is not an ISP in any shape or form

      how do you think Openreach Gets funded — or do you think it grows on trees

      Openreach makes its own choices with that funding !!!!

      and deals will all Service providers including BT Retail and BT Wholesle and BT Global services in the same ways as talk talk sky or any one else you care to mention

      you clearly have no understanding of the market and how it operates

    • Avatar karl

      Ill capitalise they appropriate bit in the question for you and your selective reading…
      “which other ISP OR GROUPp is giving £10.5bn to Openreach?”

    • Avatar FibreFred

      No you still don’t get it, no-one is saying other providers are giving Openreach money.

      What is being said is this:

      https://www.openreach.co.uk/orpg/home/aboutus/equivalence/equivalence.do

    • Avatar karl

      “no-one is saying other providers are giving Openreach money”

      No BT Group does though so Openreach are not functional separate.

      Even Ignition agrees in the linked to item, is he a troll also? Or more likely you do not like your company being called out on its BS claims.

    • Avatar karl

      So you are saying they treat others the same as those groups that give them £10.5bn…….. Look a flying pig also.

    • Avatar FibreFred

      They do , if you have evidence (trolling a site like this isn’t evidence ) to the contrary put it in writing to ofcom and bt can be fined loads if it’s true.

      Any evidence?

    • Avatar karl

      The very fact only one group gives them huge amounts of cash means they are not independent or separate. If every organisation was giving Openreach 10.5billion then yes others would be treated the same. The very fact (a positive for them) they do not have to give them the same amounts means they are not treated the same. You did not follow what i was saying though as you were too busy defending openreach.

    • Avatar fastman

      Karl

      I dont your field of expertise and what industry that is in !!!! but I wonder whether you don’t understand, cant understand or do understand but choose not to and therefore being deliberate

      Openreach under its conditions of Licence treat all service providers in a equivalent way whether they are part of BT as in Bt Retail , BT Global services or Sky or talk Talk or anyone else you want to mention !!!!

      Openreach is separate from all other lines of business and depending on what you do will depend on who you can talk to (from a work related perspective)

    • Avatar Dumb argument

      “I dont your field of expertise and what industry…”

      “but I wonder whether you don’t understand, cant understand or do understand but choose not to and therefore being deliberate”

      I for one do but dont but sort of can not is not can not be understand deliberate.

      Now thats cleared that up hasnt it.

    • Avatar karl

      As clear as mud from him as usual.

  8. Avatar fastman

    ignition that wont help them as this is around margin they want a cheaper GEA — any LLU provider that offer FTTC has to buy GEA — so “break up Openreach get a better GEA price — make same margin with a better product (end customer get charges the same as part of this bundle not sure how the customer benefits !!!! its all around the margin for the CP (whatever CP that is but more of an issue if you an LLU one)

    • Avatar Ignition

      Depressing but true. I’d far rather it all cost more, not less. We’ve gone so far down the rabbit hole in the drive for ‘cheap’ we’ve left ‘good’ behind. Can’t have it both ways and the sooner Ofcom pulls head from bum and starts working based on this the better.

  9. Avatar Wombat

    If all of their futures require a fibre network why dont they install their own??? Oh that’s right it is too expensive and they can’t make enough money to make it viable!!!

    • Avatar brianv

      The privatised BT acquired our nationwide telecommunications network for pennies on the pound. The GPO flogged-off by slippery Tories. With their tinker mindset of sell everything off cheap to their slithery City chums, rewarded by backhanders and bribes.

      If BT plc had paid true asset value for the GPO network, it would have cost them around £200bn.

      Replicating that £200bn network is evidently beyond the finances of any other operator.

      And that, my friend, is why there’s no credible competition today in Britain’s telecommunications sector.

      For the same reason there’s no competition in the water sector, nor in power generation, nor the railways.

    • Avatar Wombat

      So 32 years on BT which is plc should be spending money without any chance of making it back, do you think the share holders should approve that?
      So virgin is no competition then?? So Why aren’t they wholesaling their network????

    • Avatar karl

      “So 32 years on BT which is plc should be spending money without any chance of making it back…….”

      What evidence is there they will not make money back, and does that go for FTTC also??

    • Avatar TheFacts

      @brianv – So VM, Vodaphone etc., all the companies with code powers are not credible competition?

    • Avatar karl

      Which of those also had millions from government?

  10. Avatar fastman

    wombat you might think that I possibly could not comment == to paraphrase Francis Urquhart

  11. Avatar Attention to detail master

    It surely can’t be a “truly world-class national ***broadband*** network” if they want them to roll out a “***fibre*** direct to the premise” network – that would mean using lovely FTTP lines to transmit old fashioned ADSL/VDSL/xDSL. What I think they meant was a “truly world class national ***internet*** network”. I would be very worried and sad if they spent all that money on a fully fibre network and then didn’t make the most of it.

    • Avatar Ignition

      FTTP occupies a huge swathe of spectrum. You are aware that lasers and xDSL both use electromagnetic radiation, but the light uses a much smaller wavelength, right?

      Optical transmission is the broadest of broadband. GHz wide carriers in the THz range.

    • Avatar TheFacts

      How can FTTP transmit ADSL?

    • Avatar MikeW

      A bit like FTTP can transmit DOCSIS?

      If anyone wanted to define an intermediary layer like RFoG, you /could/ do it.

    • Avatar TheFacts

      Tell us how FTTP can transmit ADSL. Makes no sense. So the fibre to the cabinet is transmitting (and receiving) VDSL???

    • Avatar MikeW

      You understand about RFoG? A protocol to “carry” the RF of DOCSIS over fibre?

      In the home, there needs to be a media converter that converts the RFoG back into RF on Coax, which plugs into a standard cable modem.

      If you can write a spec that can transfer 1GHz of RF for HFC, then I’m pretty sure you could write one that can transfer 17MHz of RF for ADSL. You wouldn’t, but you could.

    • Avatar TheFacts

      Broadband tends to be used as the term for the access network, rightly or wrongly.

  12. Avatar New_Londoner

    The problem with the open letter and the “Fix Britain’s Broadband campaign” is the lack of credibility of the parties behind it. For example:

    1. The Sky / TalkTalk FTTP trial in York is woefully behind schedule, undermining the credibility of their basic premise

    2. Sky has confirmed it has no intention to commit funds to build its own national network, presumably informed by its misadventure in York

    3. TalkTalk is just not credible on any level as a network operator, eg its repeated failures to invest in cyber security, its lack of capital (remember it funded shareholder dividends from debt), the tendency of Dido to make things up regardless whether or not they are true when the facts don’t fit what she wants to say

    4. Voda has underinvested in the UK for years, hence its declining market share – remember it owns the old C&W network so could bypass Openreach if it invested its own money but doesn’t, preferring instead to go off on various tax dodging escapades overseas.

    5. Sky and especially TalkTalk were very reluctant and late entrants to the fibre party, preferring to sweat their aged LLU assets as long as possible. IIRC TalkTalk branded the whole fibre project as a waste of money for something that wasn’t needed when it started, something that Dido appears to have (conveniently) forgotten now!

    I could go on but you get the gist.

    It’s about time these clowns were held to account and asked to put up or shut up by politicians and journalists. Deny them the oxygen of publicity and perhaps they will have to do something useful for a change rather than this shameless soapboxing.

    • Avatar brianv

      [admin note: Post removed. Please try to avoid posting personal abuse, as per the anti-trolling rule]

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