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Industry Says UK Gov and Regulation is Key Barrier to Full Fibre Rollout

Monday, April 16th, 2018 (10:09 am) - Score 2,583
fibre optic broadband and ethernet network cable

A recent debate of the Digital Infrastructure Panel (hosted by law firm Herbert Smith Freehills), which included representatives from ISPs BT, Hyperoptic and Virgin Media, has highlighted government policy and or regulation as the “key barrier” to large-scale investment in “full fibre” (FTTH/P) broadband.

Overall some 50% of attendees identified the above issue as a key barrier, while 23% said that access to funding (public and/or private) was the main barrier and another 23% pointed to the technology’s “challenging economics” (e.g. high deployment costs and uncertain consumer demand) as the primary stumbling block.

industry_full_fibre_debate_vote

The debate took place as a backdrop to the Government’s on-going ‘Future Telecoms Infrastructure Review‘, which is examining what changes may need to be made (e.g. planning, copper switch-off) in order to turn the United Kingdom into an attractive place for investment to support the deployment of new “full fibre” broadband (FTTP/H) and future 5G Mobile networks.

At this point some readers may rightly point to all the recent announcements concerning major Fibre-to-the-Premises (FTTP) style deployments of Gigabit capable broadband technology across the UK (see our summary and INCA’s report), although most of those are focused upon the easiest low hanging fruit of urban areas, but the costs increase disproportionately the deeper you go (many billions of pounds).

Similarly many of the schemes that the government has introduced so far, such as their £400m Digital Infrastructure Investment Fund (DIIF) and the c.£200m Local Full Fibre Networks (LFFN) programme (details), will only go so far in helping to improve coverage before hitting a wall. On top of that the 5 year holiday on business rates for new fibre, while useful, has been countered by a significant rise in rates on existing fibre.

Meanwhile operators are calling for further changes, many of which could be tricky to implement. For example, Openreach and KCOM are both keen to switch-off their older copper networks as fibre optic lines are rolled out to individual homes and businesses, yet they face a complicated barrier of competition and historic regulation. Not everybody wants to pay more for FTTP and so you can’t simply switch off copper-based services without creating a mountain of complex problems for ISPs.

The recent debate included some useful feedback from members of the panel and we’ve summarised some of their key points below.

Dana Tobak, CEO of Hyperoptic, said:

“One of our biggest challenges is actually getting wayleaves in local authority buildings. Our coverage in urban areas would be significantly greater if councils signed wayleaves, but fundamentally that’s something that’s gone really slowly and there seems to be a disconnect in appreciating that in order to get full fibre you actually need to put fibre in there.”

Dan Butler, Virgin Media’s Head of Public Policy, said:

“We hope that the DCMS Future Telecoms Infrastructure Review will be a vehicle for more policy consistency and to solve some of the genuine supply-side barriers to build, which are wayleaves and getting broadband in to new developments. And Government should implement policy which stimulates demand for ultrafast broadband – through voucher models, and encouraging people for whom there might be an economic barrier to move to high speed broadband.”

Emily Clark, BT Chief Economist, said:

“I would argue that you can leave more to the market and move away from the very micro management by regulation that you see at the moment, which is not good for BT/Openreach or rivals either – regulation of Openreach affects the prospects of Openreach’s rivals by taking out value from the industry. When you look at what happens in other countries they have taken much bolder decisions about regulation.

In countries like Spain and Portugal – where there is a lot more FTTP – they’ve tended to step back from regulation like VULA in order to really drive incentives for rivals to invest. And in other countries they’ve actually stepped back from competition and said what we’ll do is create a very stable and predictable regulatory framework around the single national provider and that has also worked very well. In the UK we have neither of those models.”

Geoffrey Norris, Senior Advisor (Global Counsel), said:

“Across the UK political class, ambitions and expectations about broadband and 5G are high and rising, and are likely to lead to Governments of whatever political complexion to become more interventionist in the pursuit or realising them. We’re already seeing this in some of the moves by Matthew Hancock in terms of him taking powers to set objectives for Ofcom and I also think that Brexit will facilitate a more interventionist UK Government.

Secondly, a Jeremy Corbyn-led Labour Government would have none of the reticence about state-led solutions that has characterised UK public policy under Labour, Coalition and Conservative Governments over recent decades. … A Jeremy Corbyn led Government may indeed favour the renationalisation of Openreach as a wholesale, open-access provider.”

As usual with industry events like this there can be a tendency for each provider to talk-up aspects of change that are in their own vested interests, which can skew some of the points of view being offered. Nevertheless it will be for the government to rummage through all these competing interests and to drive forward a policy that can hopefully resolve some of the problems.

We’d also urge caution when country-to-country comparisons are used because other telecoms and infrastructure landscapes can be significantly different from the UK. For example, some countries have benefited from significantly more state aid funding and others may have a much larger proportion of people who live in easier to reach apartment blocks etc.

At the same time there’s also an argument for avoiding overly invasive industry changes, particularly any that could risk destabilising the currently quite healthy and growing market for alternative network providers that have sprung up to compete with Openreach (investors might take a ‘wait and see’ approach that would slow progress).

Suffice to say, the government have a difficult job ahead.

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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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23 Responses
  1. Joe

    We’ve been through this b4 – must be able to compel switch off of copper. That might be a post-brexit issue given EU law making it very difficult and litigious to compel.

    I wonder if on wayleaves for local authority land we need something from the building industry where in some circumstances you notify the LA that you intend to build X and they have to oppose inside a deadline to prevent it. Perhaps automatic wayleaves on a set compensation unless they oppose at a ombudsman. Give the ombudsman a presumption in favour duty and many issues would vanish.

  2. Graham Long

    And just to confuse the customer further, the incompetent decision by the Advertising Standards Agency to allow broadband providers providing a service over copper wires to describe their service as “fibre broadband” reduces demand for the real thing because FTTC and DOCSIS customers think they already have full fibre. https://issuu.com/gglong/docs/virgin_copper_is_fibre

    • TheFacts

      @GL – as you have been told many times people buy a service with a speed at a price, the delivery method does not matter. How can people ‘demand’ fiber?

    • GNewton

      @TheFacts: Your comprehension is slow, as shown by your post. There are many reasons why fibre lines make sense. The speed limitations on copper is one of them, line reliability is another. If you are not happy with your business line, go get in touch with your ISP.

    • FibreFred

      Is there evidence demand is reduced? Or is it just your own perspective?

  3. Joe M

    I think disconnecting ofcom from regulating the fiber internet market is the answer. Like post office used to regulate telecoms, util BT and post office was separated, ofcom is not fit for the purpose because it has lost focus. It should be replaced by an independent fiber market only regulator with representation from housing associations, fiber only companies, land owners and councils that are all participating in fiber to the home which is worth around £2 billion per city alone. It is 100% essential for 5G telecom masts to have fiber. So it would be good if councils, land owners etc come together, create web site(s) that show free passage for telecom wires with all approvals uploaded ready to go which the fiber companies can download and use at lowest cost to roll out fiber infrastructure. If landowners and councils are not participating and punishing themselves and their citizens, then it would become a lot clearer who needs is at fault when you can’t get a mobile signal instead of the current situation where everyone points their finger at each other and get away with it. Any regulations that need to be abolished such as day light robbery window tax on dark fiber can be got rid of immediately to encourage everyone to invest in fiber.

    • TheFacts

      @JoeM – Where are the locations where mobile operators cannot link masts back?

    • GNewton

      @TheFacts: If you need more info about the mobile coverage in your area why don’t you shop around and directly ask the different providers?

  4. Meadmodj

    We are surely reaching a point where all regulation should be removed or at least light touch.

    I hope we don’t do away with copper. There is something comforting about a direct exchange line with a corded phone powered by the exchange. If there is a catastrophic loss of local power (terrorist, enemy or natural) then all these broadband services and mobile masts will exhaust their UPS within days. In our rush for faster data, VoIP, streaming etc we need to consider the risk however unlikely some may view it. This is a subject I have written to both my MP and Ofcom about and await their reply. ADSL and Passive Fibre are actually more resilient than FTTC but BT are already planning to remove some local exchanges so there may no longer be the battery/generator standby for this kit either.
    (yes I do have alternative power).

    • Joe M

      A mobile transmitter can be spliced into a fiber network in no time with gigabit data rates good for thousands of phones while a mobile phone can be charged in no time with a power bank/solar charger. Copper is dead.

    • Meadmodj

      I wish I shared your optimism. I did use the word catastrophic. That is a wide geographical area and a sustained outage possibly more than one incident. In the past if there was a civil emergency priority keys would ensure all fireman, policemen, doctors, councillors, hospitals and 999 services would remain contactable to deal with any emergency and to retain order. You have greater faith in your fellow man than I do. If I was stuck without power I (or my community) would still wish to call an emergency services. No power means no petrol etc and its during this time communication actually is critical.

    • Joe

      We are more resilient now – mobile and fixed being much better than old copper. The more fibre we get the more single points of failure decline. Power is not a great issue the NG is pretty well able to distribute around issues

    • Meadmodj

      That is no broadband, no WIFI, no mobile, no water or sewage pumping, no petrol (no manual pumps now) etc. I’m not talking access to ISPreview.

    • Meadmodj

      @Joe
      My understanding is that most UPS/Standby scenarios are only hours or a few days at most and that this is increasingly being built into designs. If the main grid went down for weeks on the old PSTN, generators would keep it going with mobile generators and fuel stores were on standby. My concern is the direction we are going and the presumption it will never happen. Power is our Eccles heel and communications remain a critical infrastructure.

    • Joe

      “That is no broadband, no WIFI, no mobile, no water or sewage pumping, no petrol (no manual pumps now) etc. I’m not talking access to ISPreview.”

      The NG is more resilient than it has probably ever been. But you can of course hide in a bunker in the unlikely event of the zombie apocalypse arriving if you feel the need.

    • Joe

      “My understanding is that most UPS/Standby scenarios are only hours or a few days at most and that this is increasingly being built into designs. If the main grid went down for weeks”

      The former is true but it is difficult to see any senario short of nuclear strikes that could cause the (whole) grid to be down for days let alone for weeks. The levels of redundancy is huge.

    • Meadmodj

      I hope you are right. I can think of a number of scenarios simpler than war or aliens. Ofcom currently have the responses back to the Security and Resilience review so I will await the final deliberation. I am just pointing out that we already have a resilient fall back in the direct exchange line and we have a choice now to preserve it if we wished to, if not for civil defence, for the remote communities that suffer prolonged power outages due to bad weather annually. BT is currently dismantling the PSTN and will progressively move to VoIP. Commercial necessity will result in them also taking a “must be balanced against the economic cost” approach.

    • Mike

      “The former is true but it is difficult to see any senario short of nuclear strikes that could cause the (whole) grid to be down for days let alone for weeks. The levels of redundancy is huge.”

      Obviously you missed the news when parts of the country were severely flooded and SOME went without comms, electricity and Gas for several weeks.

    • Joe

      Mike I quite clearly said ‘whole’ grid. Localised problems don’t present a systemic issue. Nor practically are they avoidable unless you are going to spend an almost limitless amount.

      @Mead: Voip over fib is inherantly more reliable than our old PSTN so your issue is misplaced.

    • Mike

      “Mike I quite clearly said ‘whole’ grid. Localised problems don’t present a systemic issue. ”

      Christ we better hope we never have any “Localised” Nuclear Station meltdown with your cheery mentality.

      As for communications being better…. Err NO the likes of mobile, GPS and similar wireless tech still cuts in and out or go out completely during Solar Flares.

      Wireless tech is in no way better than fixed line. You will not find any world leader worth his sort relying on some daft wifi or mobile phone should the unfortunate happen no matter how much better you think it is.

    • TheFacts

      @Joe – voip more reliable than PSTN? Numbers please. Where is the VOIP server located?

    • GNewton

      @TheFacts: Are you still using PSTN for your business? What and why do you need to know for a VOIP? Have you ever tried it? It costs far less than BTs old PSTN.

  5. Optimist

    The comments of the ISPs could not be clearer. They need permission to install their infrastructure! That is the issue that must be addressed.

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