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Zen Internet Talks Ending the Fibre Tax and Working with Altnet ISPs

Saturday, November 9th, 2019 (12:01 am) - Score 7,795

Question 6. A number of alternative “full fibre” (FTTP) network providers (e.g.TalkTalk, Hyperoptic, Cityfibre, Gigaclear and INCA) have called on Ofcom and the Government to take tougher action against Openreach (BT), not least in order to limit their ability to overbuild them and thus hopefully improve overall UK network coverage.

However, nearly all of this battle is currently taking place in urban areas, where commercial competition is natural and often aggressive. Likewise there are advantages to overbuild between rivals, such as a greater a choice of networks / services. On the other hand it can make the market more complicated for both consumers and wholesale ISP clients.

What are your views on this issue and how do you think it should be tackled?

Richard’s Answer:

If you were to take it from the view of competitor providers then the argument would be that Openreach has an unfair advantage because they are benefitting from being the incumbent. A benefit that BT has enjoyed since it was privatised in the ‘80s.

However, on the flip side, if Ofcom or the Government was to bring in restrictions, then that would also restrict competition. This would almost certainly not be in the best interests of the consumer.

Both sides of the argument have merit, but on balance, I feel we need to leave the market open to free competition. The competitor providers seem to have enough funding to compete effectively with Openreach.

Question 7. The Government recently published their new Online Harms White Paper, which appears to mark a significant shift toward a much more censored internet, where everything from fake news to hate speech and conspiracy theories could, at an extreme, end up being either removed at source or blocked by a broadband ISP.

The rules will focus upon major social networks (Facebook, Twitter etc.) but could also target smaller file-hosting sites, online forums, messaging services and even internet search engines. Smaller sites may struggle to implement effective filtering due to cost and limited human moderation resources (e.g. individual blogs are run by people who simply aren’t awake 24/7 to monitor such things).

One difficulty here is that there can be different interpretations of what is or is not “fake news” and some of the other content category definitions are similarly ambiguous. Suffice to say, many fear that in the race to protect internet users and children from harm we might ultimately sacrifice freedom of speech and expression. What are your thoughts on the recent proposals?

Richard’s Answer:

The Government’s desire to make the Internet a safer place for everyone in the UK is commendable and has my full support.

It is a very complex subject however. The Government intends to create a regulator to take responsibility for all of UK’s online safety, but the remit for the new regulator is huge and far beyond what any regulator has attempted to tackle before.

Regulators tend to work well where there can be clear measurements and you can evaluate if something crosses the line. But the grey areas in this case are immeasurably bigger when it comes to what is right or wrong. To give an example, when does a Twitter exchange cross the line from being heated to being considered bullying and one that requires proactive action? – That is one of thousands of very difficult questions that both the new regulator and the regulated companies will need to contend with.

A foundation stone of the white paper is the requirement for organisations to show a sufficient “duty of care” towards their users. The challenge with this approach is that “duty of care” is a qualitative and subjective term that is difficult to define and so for the regulator will be difficult to enforce. It is unlike, for example, the GDPR regulations that define much more clearly what you can and can’t do with personal data. There is a danger that the new regulator will become completely tied up in knots dealing with a small number of individual cases, arguing the toss with the organisations concerned about whether those organisations have shown a sufficient duty of care or not. For example, if you are looking at things that are legal but could be harmful to mental health – where do you draw the line? How do you deal with a piece of content that may be innocuous to the vast majority but potentially harmful to a small minority? How big does that small minority need to be before the regulatory line is crossed, and how could you assess the number of people potentially impacted in any case?

The new regulator will have a very broad remit – the white paper lists 23 individual “harms” ranging from terrorist activity and modern slavery to sexting, intimidation, and children accessing pornography – each a complex subject in itself. Add to that, the breadth of organisations covered by the new regulation. Although the regulation is intended to be proportionate, and primarily aimed at the big social media companies, the wording of the white paper means it will apply to the majority of UK businesses. For example, any business with an online shop that allows customers to comment on the products they have bought will fall under the regulation. It’s a gargantuan challenge.

The Government says it wants the new regulator to become cost neutral quickly, so who is going to pay for it? How would you set up a charging structure that potentially places a levy on the millions of UK companies that will fall under the regulation?

The consultation acknowledges that the regulator must have, and maintain, detailed knowledge about how the platforms of regulated companies work. This is going to be yet another huge challenge for the regulator – to keep up with the ever-evolving technology and specific implementation details in potentially thousands of regulated companies.

There is talk in the white paper about potentially filtering international harmful content by firewalling it off from the whole of the UK. The technical challenges of doing this are enormous. Probably even bigger is the challenge to freedom of speech or the idea that the Government can isolate the whole of the UK from content it deems harmful. Parallels would quickly be drawn to the approach that the communist government in China has taken with their Great Firewall of China. Who within Government would decide what to block?

Overall, the sentiment of the white paper is excellent and very relevant. It aims to build upon much of the excellent and effective work done by organisations such as the Internet Watch Foundation (IWF) but to also go much further. The new regulator will, however, have the biggest challenge of any of the UK’s regulators in my view. I believe there is a real danger of the regulator’s remit being so huge that it is unable to focus on anything in enough depth to make a positive difference. I hope the regulator will avoid this trap, so it is able to make some positive steps forwards.

Question 8. In keeping with the above, Government politicians are known to be concerned about the future adoption of DNS over HTTPs (DoH) technology. At present ISPs usually control their own Domain Name Systems (DNS), but the new encrypted DoH solution can be managed by a third-party (e.g. Google’s Chrome website browser) and they may in the future enable it by default.

Politicians are concerned that DoH may hamper their censorship plans and some ISPs are also worried that it could create more problems for their service, such as by hindering the operation of certain features. On the other hand DoH is fundamentally a security and privacy improvement for consumers. What is your perspective on this debate?

Richard’s Answer:

DoH is a good thing as it encrypts a data stream that was previously unencrypted, and so that is an improvement for overall Internet security.

I believe the worries around DoH hampering filtering are a non-issue.

For normal users it makes no difference to what the service provider can and can’t do. The DNS requests from normal users terminate on Zen’s DNS servers. With DoH, the data will be encrypted en-route but will be decrypted on our DNS servers so we will be able to do the same thing with those DNS requests as we can with plain text DNS requests.

If DoH requests are routed away from Zen – e.g. by Google’s Chrome browser defaulting to Google’s own public DNS servers, then it’s still a non-issue for filtering. It just means that Google will be responsible for the filtering rather than Zen.

Those people who are technically savvy and want to do something malicious are already encrypting their DNS requests and hiding the source of those DNS requests so DoH doesn’t give those people anything new.

Question 9. The Government wants to see nationwide coverage of “full fibre” (FTTP) broadband ISP networks by 2033 and in order to do that they’ve committed nearly £1bn to help foster such networks, such as through targeted investment schemes and vouchers. Do you think this is the right approach to achieve such an aim and, if not, what should they be doing differently?

NOTE: Since writing these questions a new 2025 target for “full fibre” coverage has been adopted and then watered down to “gigabit-capable” (here). A General Election has also been called and so this may yet change.. again.

Richard’s Answer:

Since you posed this question, things have moved on! Now Boris Johnson has pledged nationwide full fibre by 2025 and has proposed to invest £3-5bn to make this happen.

The future prosperity of the UK is dependent upon broadband continuing to get faster. Full fibre connectivity is currently the ultimate solution to allow homes and businesses to upgrade the speed of their broadband connections over the long term. From this point of view, I welcome the Government’s aspirations to hasten the rollout of full fibre connectivity nationwide.

As mentioned in my answer to question 4, for a proportion of the UK (e.g. those close enough to the cabinet to get 250 Mbps or faster), G.fast could supply all the broadband speed that customers could need for the next ten years and beyond. A hybrid approach of full-fibre and G.fast could therefore achieve the same end-result quicker and at less cost. The Government should ask itself whether spending £3-5bn with a singular focus on full fibre is the best use of public money when there may be a lower-cost alternative that achieves the same end-result. If the Government is thinking very long-term (beyond 10 years) and there is sufficient public money then full fibre for everyone is still the ultimate solution.

The other niggle I have is about fibre tax. It has always struck me as odd that the Government taxes fibre optic cables, whereas they don’t – for example – tax slower and less capable copper cables. The Telecommunications Infrastructure Act 2018 was a step in the right direction by providing tax relief on new fibre until March 2022, but as things stand, the new fibre will be taxed from April 2022 onwards, and there is no tax relief on existing fibre. At Zen, we need to continually upgrade our network, but the existence of fibre tax makes some upgrade routes significantly less attractive. On the one hand, the Government is massively keen on full fibre, and on the other, the more full fibre there is, the more tax the Government will collect. It seems a bit like they are giving with one hand and taking away with the other. If the Government is genuinely keen on a full fibre future, I believe they should scrap fibre tax altogether.

Despite my concerns, I am supportive of the Prime Minister’s aspiration for a full fibre future, as full fibre provides an unlimited bandwidth upgrade path.

Question 10. Openreach and Ofcom have both recently launched consultations on their future approach to switching off old copper networks as part of a phased move toward full fibre FTTP infrastructure. What sort of challenges do you see this as creating in the future and how do you think it should be handled?

Richard’s Answer:

Switching off the old copper network is going to be a big and complex endeavour that is, in my view, going to take significantly longer than the current target date of 2025. Openreach is, however, taking a very sensible approach and considering all the specialist services such as Redcare alarm monitoring and panic alarms for the elderly.

Taking panic alarms as an example, there is a huge number of these deployed in houses across the UK, and they will only work with old copper telephone lines. Who is going to organise for each and every one of these to be swapped out? And who is going to cover the cost? This is one of a number of really big challenges to switching off the copper network.

Even putting specialist services aside, there are many people in the UK who use their landlines regularly and who will be very resistant to changing over to an IP telephony service. They won’t want to swap the handsets that they know and love for IP handsets, and they also won’t want the trouble of swapping their router to one that has PSTN ports. Having a landline phone service is very important for safety, particularly for vulnerable people, and so it will be very difficult or impossible to turn off the old copper telephone service unless everyone has moved across. I can imagine it taking a very long time to get the last 10% of people across.

Despite the challenges, I’m happy that Openreach and Ofcom are taking a sensible approach. Getting the copper network switch-off over the line will require a big collaborative effort by the whole industry. Openreach and Ofcom appreciate this and are working well with industry on the first stages of planning.

ISPreview.co.uk would just like to send Richard our thanks for taking the time to provide such considered and constructive answers to our questions.

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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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32 Responses
  1. Mike says:

    The only certainties in life are death and taxes.

  2. chris conder says:

    I have always been a great admirer of Zen, never heard a bad word about it, unlike a lot of other ISPs. This interview proves they are fantastic. Scrapping the fibre tax is essential if we are to progress, many have been campaigning for years for this. His approach is spot on. I wish he was running openreach…

    Regarding online safety, there is not much government can do, they won’t employ clever enough people, they tend to lock them up instead. GDPR is a prime example of trying to regulate, now one can’t hardly do anything to help people, yet the spammers continue to harrass folk with emails, phone calls and junk mail. I tried to report a phone line down to Sky the other day, and they wouldn’t even test the line unless I knew the customer’s password. The elderly lady in question didn’t even know it herself… so because of GDPR we got no further. Even escalating the call to the line manager wouldn’t let us report it. Madness.

    Well done Richard and Zen, keep rockin. As you rightly point out, competition is King, and the Altnets are saving us. If it wasn’t for Virgin and the early ones we’d still be on dial up.

    1. The Facts says:

      Or we would all have fibre if Maggie hadn’t stopped it.

    2. GNewton says:

      “Or we would all have fibre if Maggie hadn’t stopped it.”

      This is ancient past. Let’s stick to the facts here: Nobody has prevented your beloved BT doing fibre now for ages.

    3. The Facts says:

      Troll record – 1hr 20min.

    4. dave says:

      GNewton is right though.

      We all know that we are heading towards 1Gbps (and eventually, more) over fibre, so why doesn’t BT focus it’s efforts (and money) on this?

      Also just because BT once proposed to fibre up the whole country, doesn’t mean they would have actually done it to literally 100% coverage. I bet some areas would be waiting even now.

      Is there any country in the world with 100% fibre coverage?

    5. beany says:

      Thatcher has been dead for over a decade and nothing was there to stop BT near enough a decade before that. I guess some BT juice drinkers will just blame anything.

    6. beany says:

      EDIT Thatcher has been dead for over HALF a decade.

    7. TheFacts says:

      Altnets have had since 1985 to fibre all the UK. Why did VM’s previous cable companies give up in many areas 20? years ago?

    8. Roger says:

      I think you are missing one key fact. BT wanted to roll out a UK Fiber network as long as it maintained its monopoly.

      We can only speculate on what they would mean for options, feature sets and price if BT was still the only provider in the UK. It’s not like they had a good track record up until that point. Don’t forget that between 1965 and 1982 BT’s view of innovation was the Trimphone for its consumer base.

    9. beany says:

      “Altnets have had since 1985 to fibre all the UK. Why did VM’s previous cable companies give up in many areas 20? years ago?”

      1. Home internet or the world wide web did not exist in 1985.

      2. Virgin Media did not exist until 2006, so how they have had 20 years i guess only you would know.

      3. Most important… You really are dumb.

    10. Go away says:

      BT the useless company and followers that like to blame others for it deficiencies.

    11. Dave says:

      “1. Home internet or the world wide web did not exist in 1985.”

      If BT thought there was an advantage to fibre at that time or could see the future advantages, then why not the cable companies too?

      “2. Virgin Media did not exist until 2006, so how they have had 20 years i guess only you would know.”

      Read again. “Why did VM’s PREVIOUS [emphasis mine] cable companies give up”. Any one of the cable companies which existed pre-Virgin Media could have rolled out fibre but none did. Virgin Media could have been rolling out fibre for the last 13 years but has actually done very little, less than BT even!

      “3. Most important… You really are dumb.”


    12. beany says:

      “If BT thought there was an advantage to fibre at that time or could see the future advantages, then why not the cable companies too?”

      You would have to ask the facts who seems to think the internet was around back then.

      “Read again. “Why did VM’s PREVIOUS [emphasis mine] cable companies give up”. Any one of the cable companies which existed pre-Virgin Media could have rolled out fibre but none did. Virgin Media could have been rolling out fibre for the last 13 years but has actually done very little, less than BT even!”

      As stated VM did not exist until 2006. If you and the facts are referring to why Telewest did not do anything to forward the internet in this country, that argument is also void. If you want to know who did what and who was first to do what it goes like this..

      Pipex 1992 First dial up internet connection in the UK.

      Telewest (who you and he may be referring to) First ADSL connection in March 2000.

      Easynet group first ADSL2/+ connection end of 2004 quickly followed by BE unlimited in 2005

      FTTC first test performed by lincs in partnership with Oracle, BT then sniffed in on the action and signed a deal with them in 2008 to develop the tech further.

      Oh and the kicker…

      2008, H2O Networks, rolled out Fibrecity, offering Residential FTTH in Bournemouth, Northampton and Dundee.

      2011 KCOM begins in Hull and East Yorkshire network.
      2011 Hyperoptic launched a 1Gbit/s FTTH service in London, today it is in Manchester, Birmingham, Eastbourne, Glasgow and Sheffield.

      In 2009, BT announced that its internal network division, Openreach, would connect 2.5 million British homes to ultra-fast FTTP by 2012.

      It failed.

      ““3. Most important… You really are dumb.”


      Feel free to dismiss actual facts and history.
      Ill link to where it all came from if you are stupid enough to try to.

    13. dave says:

      Your history is irrelevant as it is all very Internet centric, which we all know wasn’t used by consumers in 1985.

      Fibre could very well have been used for TV and radio delivery for example, which would have suited the cable companies well.

      It’s likely we would have seen online services similar to CompuServe, AOL etc too (though obviously they would have been fairly quickly replaced by Internet access).

      Fibre is also less of a maintenance headache and a lot of costs would have been saved by now.

      Also, Telewest was not the only cable company before Virgin Media. NTL & Telewest merged to form Virgin Media but there were many others before that happened: https://en.wikipedia.org/wiki/Timeline_of_cable_television_in_the_United_Kingdom

    14. beany says:

      “Your history is irrelevant as it is all very Internet centric, which we all know wasn’t used by consumers in 1985.”

      Of course, that is the point is it not. How history is irrelevant to who did what in internet networks is the entire point.

      “Fibre could very well have been used for TV and radio delivery for example, which would have suited the cable companies well.”

      No company anywhere in the world used or planned to use Fibre for home TV or Internet back in 1985. Be it BT or cable companies.

      “Fibre is also less of a maintenance headache and a lot of costs would have been saved by now.”

      Again nobody anywhere had planned any nationwide fibre network back in 1985.

      TV networks has nothing to do with it.

      “Also, Telewest was not the only cable company before Virgin Media. NTL & Telewest merged to form Virgin Media but there were many others before that happened:”

      The majority of which had nothing to do with any type of telecoms network. TV which was the focus of everything up until around 1990 was in the most part small regional trials, volunteers or local government funded projects. All TV of that time was also low bandwidth so the thought of even laying expensive at the time fibre cable rather than a cheap coax is utterly ridiculous.

      Quite what your point is i dunno an Altnet was the first to do FTTP, not BT, not cable and they did it because they wanted to do it a whole decade ago and several years before BT.

      BT have done NOTHING first in this country NOT TV, NOT phone, NOT internet and with regards to the internet, to suggest others should do even more like lay fibre networks before BT when BT have done nothing first is frankly hilarious.

    15. dave says:

      I cannot be bothered to argue with your idiotic ramblings, even the bits which are provably false.


    16. beany says:

      “I cannot be bothered to argue…”

      Thank you for your time.

    17. The Facts says:

      @Roger – BT in its current form did not exist until 1984. Until then a nationalised industry.

      You may not be aware of telecomms innovation between 1965 and 1982 like Prestel, single mode fibre and many patents.

    18. CarlT says:

      Your GDPR example is nothing to do with the GDPR. You would have received the same response in the past under the Data Protection Act.

  3. Archie says:

    If Virgin allow other ISPs to use their network does that mean we can finally use a different modem instead of Virgin’s hub?

    1. Lee says:

      no, they won’t allow it due to hack the cable broadband for free

    2. CarlT says:

      I imagine they will do as Openreach have and provide a powered NTE / modem.

      Ignore Lee. DoCSIS security has come quite a long way.

  4. A_Builder says:

    The bit that Richard is missing with the Gfast conversation are the gaps in the coverage.

    It is quite possible, as on my street, that I have fantastic Gfast and the guy who lives next to the pod can’t get it because the line loop back to him from my the pole outside the house. How are those gaps filled? If you start doing micro footprint fiber deployments This gets super expensive and by the back of my fag packet costs nearly as much doing a whole street to the pole/chamber.

    So I would counter that and say that Gfast makes sense where the coverage from the PCP is even and where the copper lines are good and in the main short. I suspect *total guess* that OR have used the know line properties taken with uptake rates on 76Mbs packages to select relevant PCPs for GFast.

    Although I suspect the solution set for the above is getting quite small.

    1. Laurence "GreenReaper" Parry says:

      For me, the most I can get from VDSL2 at ~750m from the cabinet is 7.5/45 Mbps – sufficient for many things, but hardly ideal. G.fast will do nothing for me.

      Meanwhile, Virgin can do 500Mbps, and probably 1Gbps in the mid-term. Without fibre, Zen will probably not get my service and I will be worse off too if I want a higher level of service. (Currently I have both, but I expect to drop that soon.)

      If there is a fibre tax it should be levied equally on everyone using fibre to get to their distribution nodes – including Virgin and cellular providers. But realistically, the best approach might be not to tax at all.

  5. Martin Espose says:

    It’s hard to really listen to what he says.
    One of the longest standing ISPs, but they have such an insignificant customer base. Year after year of failure to grow that base. Undoubtedly they have a gold plated reputation, but seem happy to just stick with their loyal customers who pay over the odds.

    1. Spurple says:

      Nothing wrong with running a profitable business like they are?

      They don’t need to impress you.

    2. beany says:

      Some people like quality over price.

  6. Altnets r us says:

    What Richard has achieved with Zen is no less than remarkable. I respect them greatly. But I think the Altnets have changed the broadband market in the UK considerably.
    Bandwidth usage is increasing at a faster rate. The popularity of streaming services combined with better infrastructure has led to a significant jump in bandwidth.
    Most Openreach CP’s / ISP’s have only been able to sell 80Mb broadband so their usage was always capped. Now that fibre broadband of up to 1Gb is increasingly available bandwidth usage is increasing.
    I agree with the statement about fibre tax it should be abolished permanently. I see this as a tax on innovation as it makes it to expensive to build R&D networks etc.
    However comments about GFast are a little old fashioned in my mind. It is simply another sticking plaster. Fibre is considerably more reliable and faster.
    We have already seen a lack of support for the Openreach 500Mb and 1Gb broadband solutions and that is because they are expensive. Not because the tail circuits are costly but because an ISP needs to upgrade their entire infrastructure nationwide or buy from wholesale (very expensive).
    Zen will need to significantly upgrade their network to roll-out support for these higher speeds. They obviously think they are not required. But I think that will prove an incorrect assumption.
    However think of the likes of talk talk and Sky with millions of customers. Their networks will need significant upgrades.
    Now that Openreach have announced tail costs for 220Mb at the same price for 80Mb circuits and further drops in 500Mb and 1Gb tails I suspect the ISP’s that can handle these bandwidths will start to do well.
    So we have some interesting times ahead for ISP’s and I expect we will start to see some consolidation in the market and some new dominant players.

    1. Altnets r us says:

      Too 🙂

    2. A_Builder says:

      That is a very interesting analysis.

      Differentiating factors used to be big with ADSL quality and service level.

      With FTTP SLA, uncontended bandwidth levels will, amongst other things be decisional factors for some.

      Sure the landscape will change. Sure it will require investment. And for sure the innovators will stay on top.

      Lets see if Richard can innovate to stay with the FTTP challenge. Hope so: they do provide a good solution for some situations.

  7. numbnuts says:

    Ive been reading that Zen are expanding does this mean they will become another plusnet.. growing huge and offering cheap bb and then poor customer services ?

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