Home
 » ISP News, Key Developments » 
Sponsored Links

Government Mulls Regional Franchises to Boost Full Fibre Broadband

Sunday, Mar 11th, 2018 (2:53 pm) - Score 2,902

A newspaper report has claimed that the UK government’s on-going ‘Telecoms Infrastructure Review‘ is giving serious consideration to the old idea of adopting regional franchises, which they claim might help boost the coverage of “full fibre” (FTTH/P) broadband, particularly in rural areas.

At present it’s widely known that both the Government and Ofcom are deeply dissatisfied with Openreach’s (BT) commitment toward ultrafast 1Gbps capable “full fibre” (here). The operator intends to rollout FTTP to 3 million premises by 2020 and they’re also trying to figure out how to meet an aspiration of 10 million premises by around 2025, which is very difficult due to the regulatory baggage they’ve been forced to carry (some of the key regulatory or market changes being proposed by Openreach may not come to pass).

As a result the government appears to be considering the possibility of regional franchises. According to The Telegraph (paywall), discussions are at an early stage and have already recognised the potential for “major hurdles,” including concerns that “creating regional monopolies could bring new complications and problems similar to those suffered on the rail network since its franchise system was introduced.”

Advertisement

Nevertheless officials suggest that franchising could be used to ensure that more rural areas do not miss out on broadband infrastructure investment. Meanwhile densely populated towns and cities, where the commercial model is easier to make due to dense populations, could be bundled together with swathes of less profitable countryside.

A Spokesperson for DCMS said:

“We want full fibre, gigabit connectivity to be widely available to UK homes and businesses. The Future Telecoms Review underpins our plan to build a Britain fit for the future, and we are looking at all options to drive commercial investment and boost competition.”

At this stage there isn’t really enough information for us to accurately analyse what is being considered (the devil will be in the detail). The big problem with FTTH/P is that it’s hugely expensive and takes a very long time to deploy, although it’s not unrealistic to expect that commercial operators might (eventually) be able to deploy the service to around half of the UK.

However, going further than around 40-60% of the UK (i.e. mostly the low hanging fruit of urban areas) is still likely to require significant support from the public purse, franchise system or not. Perhaps around £10bn+ with match funding from private operators and councils (unlikely in the current climate of cuts) to boost that and even then you might not achieve universal coverage.

Something else to consider is that Ofcom’s recent regulatory changes (e.g. making it easier and cheaper for rivals to access Openreach’s existing cable ducts) and the government’s five year business rates holiday on new fibre, as well as their other “full fibre” funding schemes, haven’t really been given enough time to work. But already we have seen a lot of progress, which can be partly attributed to these changes.

Advertisement

A number of alternative network (AltNet) ISPs have announced significant investments and the regulator expects that these could help boost coverage to 20% by 2020. For example, Hyperoptic aim to cover 2 million urban premises with FTTH/P by 2022 (aspiration for 5 million by 2025), while Vodafone with Cityfibre will reach 1 million by 2021 (aspiration for up to 5 million by 2025) and Virgin Media plan 2 million by 2019/20.

Not to mention all of the work by smaller operators (Gigaclear, B4RN, IFNL/GTC etc.) and Openreach’s own plan for 3 million by 2020. TalkTalk has also proposed a similar deployment. One caveat with all of this is that we don’t yet know how much overlap (overbuild) will exist between these rival FTTP/H deployments, which is a significant factor that affects overall coverage and is very difficult to predict.

Quite how all of these new deployments would be affected by a complicated system of regional franchises is unclear and, while fresh investment is still flooding in, injecting new uncertainty might actually be harmful to the growing market (investors could take a ‘wait and see’ approach that would slow progress). Stability is what the market really needs right now.

Lest we forget that Ofcom has spent most of the past decade or so on building a highly competitive market, where low cost broadband comes via a diverse selection of mostly national ISPs. At first glance regional franchises would appear to steer away from that model and might also make it even more complicated to pick an ISP.

Advertisement

Naturally BT is likely to be opposed to all this and we suspect that most of their rivals would also greet the idea with a general level of suspicion, at least until they have some solid details and the government clarifies how, or even if, existing altnet deployments would be protected under such a scheme. For now it’s an interesting talking point but we suspect that the barriers to adoption and risk of long-running legal challenges might be too big.

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 X (Twitter), Mastodon, Facebook and .
Search ISP News
Search ISP Listings
Search ISP Reviews
Comments
20 Responses

Advertisement

  1. Avatar photo John Nolan says:

    Maybe OR should be split on a regional basis? As always, the idea has been tried before (albeit under the aegis of BT). See John Harper’s book “Competition and Choice..”

    1. Avatar photo Steve Jones says:

      What would that actually achieve? They won’t be competing with one another. National pricing will not be possible as costs will vary widely between regions. Then there are all the shared systems currently in use for configuration, mapping, ordering, fault reporting, monitoring and much else besides. Then there would be all the shared stuff on research, human resources, payroll systems, headquarters and so on. The amount of duplication of effort that could be involved, especially on the systems side is immense.

      In all nightmarishly expensive and disruptive without any visible benefit.

    2. Avatar photo Chris P says:

      Worked so well for the privatisation of British Rail.

    3. Avatar photo TheFacts says:

      What is the benefit of separate regional water companies?

    4. Avatar photo Insider says:

      Openreach operations is already effectively slit into regions.

    5. Avatar photo Steve Jones says:

      @Insider

      The operations side of OpenReach might be run regionally, but that’s manifestly not the case for all the IT systems and all the wholesale interfaces for billing, configuration management, ordering, fault reporting and so on. The ISP customers deal with one standardised interface for all.

      That’s before you get into all the back office functions, like HR system, payroll, procurement, financial reporting and much else.

      It’s those systems which are the issue, not the internal geographical organisational structure.

  2. Avatar photo Steve Jones says:

    So would this would essentially be cable mark 2? That is a monopoly will be granted in each area and no other company would be allowed to install FTTP? Interesting to see how that would go down with other fibre operators.

    Also, would it be end-to-end like cable with no wholesaling requirement (at least initially). Even if there was a wholesaling requirement, either now or in the future, then I can imagine the nightmare of systems complexity for retail ISPs having to interfaces with many different regional operators for ordering, configuration, billing, fault handling and so on. A standardised brokering system has been mooted in the past for both wholesale suppliers and retail ISPs to interface to, but that’s horrendously complex to put together.

    1. Avatar photo John Nolan says:

      I was being slightly provocative in my earlier comment, but my comment was really targeted at DCMS viz:

      A Spokesperson for DCMS said:

      “We want full fibre, gigabit connectivity to be widely available to UK homes and businesses. The Future Telecoms Review underpins our plan to build a Britain fit for the future, and we are looking at all options to drive commercial investment and boost competition.”

      DCMS is the latest incarnation of the civil service creating work for itself and First Mile Networks (FMN) been looking at this (from the UK perspective) from 2003 onwards. We now have Ofcom, DCMS, BDUK, BSG, Local Authorities, et al and I still cannot access fibre from my home on the outskirts of Battle in the South East.

      Just to complete the picture I’ve attached an extract from a discussion with BIS (a predecessor to DCMS) back in 2008

      “Firstly, however, I should stress that the FMN focus is primarily on the access network within new build opportunities i.e. delivering fibre and symmetric speeds of 100MBit/s (and above). The bigger issue of “fibre Britain” is something that I would like to discuss further down. I note in the TOR that the BSG have been tasked with examining the economics of fibre development (across the UK???) and I suggested a figure of £15Bn i.e. the price of Crossrail in London. I’m making a point here about infrastructure and the greater good of the UK.”

      Cest la vie

    2. Avatar photo New_Londoner says:

      @Steve
      The many legal and state aid challenges that would emanate from all the existing operators would almost certainly render this approach untenable. Assuming that the article is based on actual proposals, experience suggests that the civil servants or politicians behind them will not have bothered getting detailed legal advice from credible sources to inform their thinking.

    3. Avatar photo New_Londoner says:

      @John
      If DCMS really is “looking at all options to drive commercial investment and boost competition”, it could do worse than start by undertaking wholesale reform of Ofcom, preferably under the leadership of a new CEO. The regulator’s continual dabbling, combined with its economically illiterate “reforms”, has resulted in the current market position.

      A regulator that focuses on consumer prices is not one able to foster the right environment for sustainable, long term investment. Nor is the CEO of a regulator that indulges in politics able to command respect in the industry that he or she is supposed to oversee in an impartial manner.

      So let’s start by replacing Ms White and reforming Ofcom, something that is far simpler and less risky than trying to restructure an entire industry.

  3. Avatar photo Joe M says:

    The first thing government can do is not call for “broadband” and instead call for cheapest value for money Internet node provision which at the moment happens to be symmetric 1gbit fibre. $14 for SFP modems in aliexpress.com (retail prices), £2 per meter for 100+ core fibre which you can install in one go as opposed to installing empty tubes and doing duplicated time wasting installs by blowing fibre one fibre at a time, $1000 fully automatic fusion fibre splicers with 0.01db loss (again all in aliexpress retail prices – container load for a big job may be a lot cheaper). If the fibre goes back to a decent router, then these start at $600, and they can manage the upload/download speeds in software. The fibre trenches are no more than 100mm wide and around 200mm to 1m deep. A crew of 10 costs £1000 per day. All of which begs the question who says fibre is “..hugely expensive and takes a very long time to deploy..” ? It may be expensive if out dated methods of installing fibre are used – such as blowing fibre instead of installing 100+ cores directly. Or big trenches are being dug up and lined for electrical safety like those for copper. Average install prices for fibre should be around £150 or less per household. I can imagine easily £800+ if out dated methods are used. I would say consult a range of pure fibre companies and document their install methods first and get their costs before claiming fibre is expensive. And then also look at the infrastructure – are they implementing fibre speed bumps through router software or are they installing custom hardware that massively increases their costs? All of these need to be documented and best practice documented somewhere so that incumbents to newcomers can quote against a best practice reduced cost quotation. And countryside is not difficult to provision. Its the land owners holding out their hand for more money for passage of fibre. If they can get together and draw up web based map for free passage of cables, then I’m sure the fibre would find a way to their villages a lot quicker.

    1. Avatar photo Steve Jones says:

      £1,000 a day for a gang of ten or about £12.50 an hour each for all-in employment costs, even before you start thinking of plant and equipment? Dream on.

    2. Avatar photo TheFacts says:

      @JM – ‘Or big trenches are being dug up and lined for electrical safety like those for copper.’ Please explain, last time it was brick lined tunnels.

      What is this 100 core fibre terminating on at each end?

    3. Avatar photo chrisp says:

      @JM,
      you want OR to buy a load of cheap tat of Aliexpress and then expect it to last decades and most likely extend its usage to a future technology no ones even thought of as yet (like copper has been extended to run data that it was never envisaged to do and never designed for)?

      FYI a decent router costs much more than $600

  4. Avatar photo Mike says:

    If the government is involved a screw up is almost always guaranteed.

  5. My 2013 public report for the FTTH Council proposed exactly this approach to infrastructure finance. It will be easier to implement on the absence of State Aid after Brexit (I assume).
    It’s a shame the old regime at Ofcom wasted so many years but Government now is really moving forward.

    1. Avatar photo Joe says:

      “It will be easier to implement on the absence of State Aid after Brexit (I assume).”

      Assuming SA rules go in theory yes. Though I wonder if by the time that is the case it might be too late and decisions have been made.

  6. Avatar photo John Nolan says:

    @New_Londoner

    Don’t get me started on Ofcom!!! I posted some views re Ofcom in a recent post, but for the life of I cannot find them (Mark, can you help, please?).

    On a historical note, the current Ofcom building used to be the HQ for London City Area Telecommunications and I can recall quite vividly attending the building for an interview to become a Trainee Technician Apprentice. For some reason I was deemed suitable and I joined London City Area on 2 Aug 1971.

  7. Avatar photo Insider says:

    If the government is suggesting we overlay the current copper, fibre, cable access network, with a competing fibre network, they are barking mad. No operator in their right mind will go for that.

    Anyway, Offcom have specifically decided that copper access is the way forward by not putting a sunset date on ADSL. Until Offcom mothball ADSL, anything else is just virtue signalling.

  8. Avatar photo John Nolan says:

    @ New_Londoner.

    Found it – see thread at https://www.ispreview.co.uk/index.php/2017/11/uk-gov-reviews-barriers-full-fibre-broadband-5g-investment.html

    Note the role of Malcolm Matson who was the sold COLT to Fidelity Investments. Rumour has it that Fidelity may be in the throes of divesting COLT………

Comments are closed

Cheap BIG ISPs for 100Mbps+
Community Fibre UK ISP Logo
150Mbps
Gift: None
NOW UK ISP Logo
NOW £25.00
100Mbps
Gift: None
Virgin Media UK ISP Logo
Virgin Media £25.00
132Mbps
Gift: None
Vodafone UK ISP Logo
Vodafone £26.50 - 27.00
150Mbps
Gift: None
Zen Internet UK ISP Logo
Zen Internet £28.00 - 35.00
100Mbps
Gift: None
Large Availability | View All
New Forum Topics
By: The Wee Bear
By: The Wee Bear
By: RG13
By: The Wee Bear
By: 4gbroadbanduser
Cheapest ISPs for 100Mbps+
Brsk UK ISP Logo
Brsk £19.00
150Mbps
Gift: None
Gigaclear UK ISP Logo
Gigaclear £19.00
300Mbps
Gift: None
Community Fibre UK ISP Logo
150Mbps
Gift: None
YouFibre UK ISP Logo
YouFibre £22.99
150Mbps
Gift: None
Hey! Broadband UK ISP Logo
150Mbps
Gift: None
Large Availability | View All
The Top 15 Category Tags
  1. FTTP (5906)
  2. BT (3617)
  3. Politics (2677)
  4. Business (2392)
  5. Openreach (2382)
  6. Building Digital UK (2311)
  7. Mobile Broadband (2099)
  8. FTTC (2073)
  9. Statistics (1870)
  10. 4G (1771)
  11. Virgin Media (1721)
  12. Ofcom Regulation (1552)
  13. Fibre Optic (1454)
  14. Wireless Internet (1444)
  15. FTTH (1384)
Promotion
Sponsored

Copyright © 1999 to Present - ISPreview.co.uk - All Rights Reserved - Terms , Privacy and Cookie Policy , Links , Website Rules , Contact
Mastodon