{"id":35273,"date":"2023-08-26T00:01:36","date_gmt":"2023-08-25T23:01:36","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=35273"},"modified":"2024-02-23T15:28:42","modified_gmt":"2024-02-23T15:28:42","slug":"freedom-fibre-ceo-talks-future-uk-fttp-rollout-challenges","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2023\/08\/freedom-fibre-ceo-talks-future-uk-fttp-rollout-challenges.html","title":{"rendered":"Freedom Fibre CEO Talks Future UK FTTP Rollout Challenges"},"content":{"rendered":"<p>The CEO of alternative broadband network builder <a href=\"https:\/\/www.freedomfibre.com\" target=\"_blank\" rel=\"noopener\">Freedom Fibre<\/a>, Neil McArthur, has today &#8211; as part of an exclusive interview with ISPreview &#8211; spoken about some of the challenges the operator has faced in building a new full fibre (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/fttp\">FTTP<\/a>) network and called on the government to be more overtly supportive of such efforts.<!--more--><\/p>\n<p>At present the operator&#8217;s gigabit-capable Fibre-to-the-Premises (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/fttp\">FTTP<\/a>) network &#8211; available to UK ISPs via wholesale &#8211; already covers over <strong>100,000 premises <\/strong>(up from 40,000 in Nov 2022) and they have an initial goal of expanding to over 150,000 properties through 2023. After that the operator, supported by over <strong>\u00a3111m<\/strong> in investments from <strong>Equitix<\/strong> and UK ISP <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/tt\" rel=\"nofollow\" target=\"_blank\">TalkTalk<\/a>, aims to eventually cover &#8220;<em>approximately<\/em>&#8221; 1.3 million premises.<\/p>\n<div class=\"bq2\"><strong>NOTE:<\/strong> <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/freedomfibre\" rel=\"nofollow\" target=\"_blank\">Freedom Fibre<\/a>\u2019s network is mostly working to cover parts of England (Cheshire, Greater Manchester and Shropshire) and North Wales.<\/div>\n<p>Neil himself is an industry veteran that joined telecoms in the mid 90&#8217;s when deregulation happened, setting up a business ISP called Opal Telecoms. That business ultimately merged with <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/cpw\" rel=\"nofollow\" target=\"_blank\">Carphone Warehouse<\/a> in 2002 and helped to form the foundations for a much more familiar consumer and business provider &#8211; <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/tt\" rel=\"nofollow\" target=\"_blank\">TalkTalk<\/a>.<\/p>\n<p>Neil then ran the technology side of <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/tt\" rel=\"nofollow\" target=\"_blank\">TalkTalk<\/a> for 8 years and was a non-exec for quite a few years before returning to run Fibre Nation, a direct trenching <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/fttp\">FTTP<\/a> venture based in York that was also linked to TalkTalk. In case anybody has forgotten, the Fibre Nation project was sold to <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/cityfibre\" target=\"_blank\">CityFibre<\/a> for \u00a3200m in 2020 (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2020\/01\/cityfibre-buy-fibrenation-and-set-8-million-uk-ftth-homes-goal.html\">here<\/a>) and at that point Neil decided to stay in the business of building digital infrastructure by establishing <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/freedomfibre\" rel=\"nofollow\" target=\"_blank\">Freedom Fibre<\/a>.<\/p>\n<p><a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/freedomfibre\" rel=\"nofollow\" target=\"_blank\">Freedom Fibre<\/a> initially began life with only a few smaller deployments &#8211; focused upon bringing full-fibre broadband to rural and hard to reach areas instead of larger towns and cities. But they&#8217;ve recently been ramping-up their roll out and have also won one of the Government&#8217;s first <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2021\/03\/gov-starts-gbp5bn-uk-gigabit-broadband-and-voucher-schemes.html\" target=\"_blank\" rel=\"noopener\">Project Gigabit<\/a> contracts for Shropshire (<a href=\"https:\/\/www.ispreview.co.uk\/index.php\/2023\/05\/freedom-fibre-win-rural-shropshire-gigabit-broadband-rollout-contract.html\">here<\/a>), which is worth \u00a324m (state aid) and will see them cover \u201c<em>around<\/em>\u201d 12,000 hard-to-reach homes and businesses.<\/p>\n<p>Suffice to say that this makes Neil one of the best people to ask about the current state of the sector and its future challenges, many of which have become quite well known over the past few months (e.g. job losses, investment constraints, rising costs, competition and consolidation etc.).<\/p>\n<h3><span style=\"color: #339966;\"><strong>The Freedom Fibre Interview<\/strong><\/span><\/h3>\n<p><strong>1. Firstly, can you share with us a quick general update on the status of your network coverage (premises passed so far and areas of deployment etc.), your future targets \/ plans and how much total investment Freedom Fibre has managed to attract thus far?<\/strong><strong><br \/>\n<\/strong><\/p>\n<blockquote><p><strong><u>Neil&#8217;s Answer:<\/u><\/strong><\/p>\n<p>Freedom Fibre just recently celebrated its second birthday in late 2022, and we\u2019ve been celebrating a busy two years! We\u2019re based in the North West of the UK, so the areas we cover are principally around the Mersey Valley in Manchester through to Liverpool. More specifically our build areas are North Manchester to North Cheshire, North of Shropshire towards the Welsh Borders, including areas of Warrington, Greater Manchester and South Wirral.<\/p>\n<p>We\u2019re currently sitting at approximately 100k premises passed with an additional 70k contracted for North Shropshire through the Project Gigabit Scheme. With regards to capital we have secured over \u00a3111m of funding so far from TalkTalk and Equitix and we\u2019re already in conversations to increase this capital to expand our build footprint with plans to bring our network to approximately 1.3m premises.<\/p>\n<p><em>ISPR EDITOR&#8217;S NOTE: The above coverage data is from the end of May 2023.<\/em><\/p><\/blockquote>\n<p><strong>2. As the founder of Opal Telecom and former MD of TalkTalk Technology, you&#8217;ve certainly come a long way in the process of establishing your own network operator. Can you tell us a bit about how that transition happened and what made you go down this route?<\/strong><\/p>\n<blockquote><p><strong><u>Neil&#8217;s Answer:<\/u><\/strong><\/p>\n<p>Initially, Opal was a fairly small B2B player in the days of voice and pre-dated broadband in what was a very capital-intensive industry. We were a very technically-driven organisation and joining <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/cpw\" rel=\"nofollow\" target=\"_blank\">Carphone Warehouse<\/a> gave Opal access to more capital as well as their tremendous ability to market to consumers. This led to quite large growth for the business and in 2006 we decided to enter the broadband market and built what we termed the \u2018next-gen\u2019 network which made use of metallic path facilities (MPF) which allowed us an offering of voice and data over a converged network that we rolled across the UK to just over 4m customers.<\/p>\n<p>Seeing this level of growth and the advancement of technology meant that when fibre finally matured and we were able to start building full-fibre networks we could hit the ground running. Initially, the project was finding out how we could effectively and economically build full-fibre networks and over a period of about three years we made our way to sophisticated models using passive infrastructure access to avoid the disruption caused by new network build.<\/p><\/blockquote>\n<p><strong>3. Naturally you have a lot of familiarity with TalkTalk, which has long been a key backer for Freedom Fibre and is your main partner in the retail ISP space. Did that history make it easier for Freedom Fibre to get started and establish the relationship, or would you have proceeded to setup the operator even without their support?<\/strong><\/p>\n<blockquote><p><strong><u>Neil&#8217;s Answer:<\/u><\/strong><\/p>\n<p>Would we have set up Freedom Fibre without the support of TalkTalk? The short answer is probably not. As an engineer, my main focus has always been the effective deployment of capital within telecoms markets. I know from my 20 years at TalkTalk it\u2019s incredibly difficult to run an engineering focused organisation in conjunction with an ISP, which is a retail and customer focused organisation.<\/p>\n<p>Trying to establish a new telecoms company, especially in something as capital intensive and engineering intensive as fibre and achieve excellence in both areas is immensely difficult. So, the obvious thing for us was to focus on what we know best, which was the engineering. Therefore, Freedom Fibre was set up to always be wholesale. TalkTalk is our anchor ISP with great experience in delivering a retail and consumer product, so it made sense for us to establish this partnership from the get-go and partner with TalkTalk on both a consumer and B2B wholesale offering.<\/p><\/blockquote>\n<p><strong>4. Securing the support of a major ISP is a pretty significant feat for a smaller AltNet in this market, which we assume may have included some sort of exclusivity agreement for access. But does Freedom Fibre plan to onboard more ISPs and, if so, how will you work around any exclusivity clauses?<\/strong><\/p>\n<blockquote><p><strong><u>Neil&#8217;s Answer:<\/u><\/strong><\/p>\n<p>Obviously the partnership is great for Freedom Fibre, as it means we can focus on what we\u2019re good at and not worry about having to build a retail ISP which \u2013 as I\u2019ve already mentioned \u2013 is a big challenge. Regarding the point on exclusivity, we are able to onboard small ISPs, and the work we\u2019re doing under the North Shropshire Gigabit project is an open access project which, by definition, is going to allow us to embrace more ISPs \u2013 many of which we are already in discussions with.<\/p><\/blockquote>\n<p><strong>5. One of the biggest challenges for alternative network (AltNet) providers, including Freedom Fibre, is the need to generate a sufficient level of take-up in order to satisfy investors and your own internal business models for future payback. But some AltNets may struggle with this and a great deal of consolidation is often predicted to be on the near horizon.<\/strong><\/p>\n<p><strong>What sort of challenges have you run into when trying to generate take-up for the new network and, if I may be so bold, do you feel as if your own efforts are currently generating the desired level of adoption?<\/strong><\/p>\n<blockquote><p><strong><u>Neil&#8217;s Answer:<\/u><\/strong><\/p>\n<p>A significant challenge for us regarding take-up is that as a wholesale only player we\u2019re totally dependent on our ISP partners. Our arrangement with TalkTalk is greatly beneficial to Freedom Fibre as TalkTalk \u2013 as well as the whole industry \u2013 is transiting from the world of copper to the world of Fibre. This transition isn\u2019t going to happen overnight as it takes time to migrate all these services onto a new network. And without going into details regarding our contractual agreement with TalkTalk, I will say it\u2019s sufficiently favourable to us to be able to focus on our engineering and build rather than having to worry about penetration at all times.<\/p>\n<p>With that being said, most AltNets will say that the take-up has been slower than anticipated, and there\u2019s been a lot of unhelpful things going on that have caused this lack of take-up, least of which being the confusion of calling <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/fttc\">FTTC<\/a> \u2018fibre\u2019 which has been a nightmare for all AltNets and is something that should have been avoided many years ago.<\/p>\n<p>But at last, we have an outbreak of common sense in the sector where people are starting to understand what full-fibre means, so it shows that our education efforts haven\u2019t been In vain. It\u2019s this educational angle that the industry really needs to keep up, particularly around highlighting the reliability benefits of full-fibre instead of just the speed increases. Even super-fast copper is not without its faults, which to those in the industry is obvious but needs to be highlighted in marketing efforts. Once you\u2019ve gone onto full-fibre the speed, availability and reliability of optical fibre networks will definitely dominate, so we just have to be patient. That being said we\u2019re very comfortable with the arrangements we have for the size of the business we\u2019re hoping to build.<\/p><\/blockquote>\n<p><strong>6. The government has made a bunch of recent law changes, such as to help spread gigabit-capable broadband into new build homes (updates to the Building Regulations 2010), and to make it easier to install in large residential blocks of flats\/apartments when landlords fail to respond (Telecommunications Infrastructure (Leasehold Property) Act).<\/strong><\/p>\n<p><strong>On top of that the new Product Security and Telecommunications Infrastructure Act (PSTI) hopes to make it easier for full fibre broadband and mobile network operators to upgrade, share and deploy new infrastructure (masts, poles etc.).<\/strong><\/p>\n<p><strong>Are you expecting to see much of a benefit from these changes with your own rollout and, if so, in what areas do you expect them to have the most impact on your specific deployment?<\/strong><\/p>\n<blockquote><p><strong><u>Neil&#8217;s Answer:<\/u><\/strong><\/p>\n<p>The government is making these changes for very good reason and all these changes are helpful to the industry. At the end of the day telecoms is now a utility so anything that gets in the way of a consumer or business customer being able to use advanced fibre services is going to be detrimental for the UK economy. So, it\u2019s obvious that the government is trying to reduce these issues. Touching on things such as wayleaves which are absolutely important, particularly in multi dwelling units (MDUs) and the B2B market, and anything that eases the requirements to go seeking permission to obtain a fibre service is helpful.<\/p>\n<p>Prior to that, the regulatory changes in passive infrastructure access were absolutely instrumental in the acceleration of fibre roll-out for AltNets. Interestingly, where it perhaps goes slightly awry is when we moved over to <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/fttc\">FTTC<\/a> where I think the lack of access to passive infrastructure meant that there was minimal to no investment by third parties in super-fast copper and I think the regulators corrected that as we moved to full-fibre.<\/p>\n<p>I think it\u2019s unfortunate that the UK had the roll-out of <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/fttc\">FTTC<\/a> at all, and it\u2019s even more unfortunate trying to call it \u2018fibre\u2019 which was blatantly an error in many ways because it\u2019s confused the heck out of consumers, and it\u2019s delayed the roll-out of full-fibre. But we are where we are, and full-fibre will dominate so we\u2019re getting on with it.<\/p><\/blockquote>\n<p><strong>7. Following on from the prior question, are there any areas of legislation or regulation that you feel the government could still tweak or improve in order to support the work you\u2019re doing to expand full fibre?<\/strong><\/p>\n<blockquote><p><strong><u>Neil&#8217;s Answer:<\/u><\/strong><\/p>\n<p>I think the best thing the government could do right now is to get behind the industry and make it absolutely clear that we are migrating to full-fibre, because they are spectacularly silent on it. There are some real challenges here, for example retaining legacy network is massively costly to industry and ultimately for the consumer. For other industries once you reach an inflection point in the deployment of new technology there\u2019s nothing worse than hanging on to the old technology for as long as you can, and we\u2019re running a lot of legacy services on copper, some of which are not very sensible to try and emulate on full-fibre.<\/p>\n<p>We really just need the government to say, \u2018look we\u2019re just not providing these services anymore, we are exiting legacy services, switching off copper and moving to full-fibre networks.\u2019 It\u2019s very tempting \u2013 particularly for the regulators \u2013 to look after minority interests in this point. But they have to balance that with the costs to industry, and ultimately these costs are picked up by the consumer.<\/p><\/blockquote>\n<p><strong>8. Speaking of the government. During the latter stages of 2022 we saw some of the first full fibre rollout contracts being awarded under the Gigabit Infrastructure Subsidy (GIS) scheme, which forms part of the Government\u2019s wider \u00a35bn Project Gigabit programme. The project aims to help extend 1Gbps capable broadband networks (they currently cover 73% of the UK) to reach at least 85% of UK premises by the end of 2025 and then \u201cnationwide\u201d by around 2030.<\/strong><\/p>\n<p><strong>What are your thoughts on the Project Gigabit scheme thus far and do you think it will be enough, alongside existing commercial investment, to achieve the targets and tackle the remotest of rural communities? In addition, do you have any plans to bid on the GIS contracts?<\/strong><\/p>\n<blockquote><p><strong><u>Neil&#8217;s Answer:<\/u><\/strong><\/p>\n<p>The Government, treasury and regulators must be absolutely delighted with the amount of capital that\u2019s flowed into full-fibre, it\u2019s been fantastic. And it\u2019s testament to the industry\u2019s growth that the Treasury and DCMS only feel the need for \u00a35b to subsidise the hardest to reach areas out of a total investment of over \u00a330b, especially when you think of the economic advantages that fibre delivers. So, in the scheme of things this is a very small bill for the government to pay to have such a valuable utility available.<\/p>\n<p>When it comes to delivery, I think the gigabit program has been a massive improvement from the voucher scheme which was incredibly administratively difficult, very frustrating, and though it had its places in addressing smaller projects it wasn\u2019t scalable. So, the gigabit program has been really welcomed by the AltNet sector.<\/p>\n<p>We bid for the North Shropshire Gigabit Project and I\u2019m pleased to say we won that bid. Will we bid for more? Yes, we will, but how many we bid for will depend on the timeframe in which the bids come out, how the projects go along, and the availability of capital and resources to deliver them. Ultimately, we want to focus on bidding for projects in our area, as it makes sense for us to networks.<\/p><\/blockquote>\n<p>Now flick over to page 2 to see the remaining questions.<\/p>\n<p><!--nextpage--><\/p>\n<p><strong>9. The rising cost-of-living has been a big topic during the past year and network providers are certainly not immune to its negative impacts, both in terms of higher costs for your own operations \/ builds and the risk of rising prices for customers.<\/strong><\/p>\n<p><strong>In response, the government and <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\">Ofcom<\/a> recently warned that ISPs should now \u201cconsider whether large price rises can be justified at time of exceptional financial hardship\u201d, and they\u2019re also strongly urging providers to offer and promote cheaper social tariffs to consumers (those on state benefits).<\/strong><\/p>\n<p><strong>What are your thoughts on the pros and cons of offering a social tariff? In addition, how do you see this balancing against the highly competitive market for alternative full fibre networks, where new network builders are already competing aggressively on price \u2013 despite rising costs and high inflation &#8211; in order to peel customers away from rivals?<\/strong><\/p>\n<blockquote><p><strong><u>Neil&#8217;s Answer:<\/u><\/strong><\/p>\n<p>First of all we\u2019re a wholesale provider and not a resale ISP, but from a wholesale provision point of view the very best thing we can do is be a very efficient builder. We already have a situation where the industry is becoming highly competitive and <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\">Ofcom<\/a> must be pretty enthused that <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/britishtelecom\" rel=\"nofollow\" target=\"_blank\">BT<\/a> have already introduced two price reductions on the wholesale front with Equinox 1 and 2, and I\u2019m sure they would have done this much earlier had the capital not been flowing into the AltNet sector. So, from a competitive marketing point of view at the wholesale level I think it\u2019s already starting to happen.<\/p>\n<p>In terms of the pressure on the ISPs with social tariffs, I think the government is being a bit disingenuous, as on the one hand they\u2019re saying that it\u2019s an essential utility that is absolutely important so you must introduce social tariffs, but on the other hand they\u2019re taxing it at a VAT of 20% which is classified as a luxury goods tax. So, it\u2019s the only utility that is taxed at 20%. If the government really wants to incentivise the industry to provide social tariffs the first step is to drop VAT and align it with other utilities at 5%.<\/p>\n<p>Of course, to get a highly competitive position you need multiple networks so that there is competitive tension at that level, and I think this is already starting to happen. You\u2019ve seen <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/britishtelecom\" rel=\"nofollow\" target=\"_blank\">BT<\/a> drop its wholesale price across its whole build area and in response AltNets will follow in some capacity. The price of fibre is already pretty good, especially when compared to the price of fibre in other European countries. Fibre prices in the UK are coming down and then we just need to make sure we get to the state where there are multiple networks with multiple ISPs offering a wide range of products, which will include social tariffs in some capacity. However, I do believe that the government needs to step up and stop blaming the ISPs for the fact that there is a lack of social tariffs when you have VAT at 20% and business rates on the networks etc. This is an industry that takes very little subsidies from the government.<\/p><\/blockquote>\n<p><strong>10. Speaking of pricing, the UK\u2019s <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/asa\" target=\"_blank\">advertising standards authority<\/a> appears set to require that ISPs be clearer and more transparent with their prices, particularly around the often thorny and confusing issue of mid-contract price hikes.<\/strong><\/p>\n<p><strong>What is your view on how mid-contract price hikes should be handled by ISPs and do you think the ultimate answer is to just ban them (i.e. ensure all packages offer a true fixed price for the entire contract term), or take a different approach?<\/strong><\/p>\n<blockquote><p><strong><u>Neil&#8217;s Answer:<\/u><\/strong><\/p>\n<p>This is more a retail question, as wholesalers rarely have mid contract price hikes. However, at the end of the day it\u2019s a contract term and if someone signs a 3-year contract that has an annual RPI or CPI then that\u2019s just part of the deal. But the most important part is that these clauses are clear and visible so that consumers and businesses aren\u2019t misled through the process. But if the UK <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/asa\" target=\"_blank\">Advertising Standards Authority<\/a> has an issue with misleading people, then calling FTTC \u2018fibre\u2019 has long been a much bigger culprit in misleading the public than putting RPI indexing in a contract.<\/p>\n<p>I can understand why at the very least it should be clear that it is the deal you are getting, but as it\u2019s a retail issue rather than a wholesale issue I\u2019m not necessarily an expert on the subject and remain fairly neutral on this point.<\/p><\/blockquote>\n<p><strong>11. The price of full fibre has also been a big topic among alternative network providers for another reason this year. <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/openreach\" target=\"_blank\">Openreach<\/a> recently proposed to make further discounts (Equinox 2) to their wholesale FTTP broadband products, which prompted <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/cityfibre\" target=\"_blank\">Cityfibre<\/a> to lodge a Competition Act complaint with both the Competition and Markets Authority (CMA) and <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/ofcom\" target=\"_blank\">Ofcom<\/a>.<\/strong><\/p>\n<p><strong>The operator accuses <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/openreach\" target=\"_blank\">Openreach<\/a> of \u201cundertaking an aggressive strategy to foreclose infrastructure competition in the UK fibre broadband market\u201c (i.e. making it harder for smaller AltNets to grow customer take-up and thus attract investment). Where do you stand on this and does anything need to change?<\/strong><\/p>\n<blockquote><p><strong><u>Neil&#8217;s Answer:<\/u><\/strong><\/p>\n<p>We live in an industry where we have free competition, and we rely on a regulator to manage any monopoly interests in there that could distort that. It&#8217;s a tricky job because on one hand the regulator needs to attract huge investment in the sector which they have now done \u2013 there\u2019s something like \u00a330b of investment earmarked for fibre networks which is a big tick in the box \u2013 But they also then have to encourage price competition.<\/p>\n<p>I think what Ofcom have potentially overlooked isn\u2019t just Equinox 1 and 2 &#8211; they were never going to want to prevent that as it\u2019s in the best interests of the consumer- but they have to make sure that there are no anti-competitive activities going on and think they need to look deeper into the migration of copper into fibre.<\/p>\n<p>Certainly, if you look back to FTTC, we moved from a very competitive world of <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/adsl\">ADSL<\/a> to a very uncompetitive world of FTTC because AltNet operators didn\u2019t have the tools to deliver it. This placed <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/go\/britishtelecom\" rel=\"nofollow\" target=\"_blank\">BT<\/a> at an exceptionally strong position to pick up all the subsidies that were going on super-fast copper and build an intermediate product that has allowed them to manage the migration from copper to full-fibre in a way that suits and benefits them more than it suits anybody else. So, I think there\u2019s been a little bit of \u2018eye off the ball\u2019 from Ofcom in all the various small steps.<\/p>\n<p>We\u2019ve had the issues of subsidies to Area 3 which only BT received when there were plenty of AltNets already building in Area 3. That didn\u2019t seem fair to a lot of people, that there were approximately 3m homes BT received a subsidy for that nobody else was receiving in areas where AltNets were already building and relying on vouchers. And then DCMS conveniently removed a load of subsidy contemporaneously with Ofcom, and you\u2019re not telling me there wasn\u2019t some kind of dialogue going on there as it all happened a little bit too quickly for it to be a coincidence.<\/p>\n<p>So, from the AltNet sector I can see how it would look a little bit like the regulator is conspiring against them. I don\u2019t think it\u2019s as devious as that, but equally BT have made it quite clear that they believe there should only be one network, which doesn\u2019t sound like a business that is embracing a competitive world. What we need is a very healthy AltNet competition because it\u2019s that competition that has kept BT honest.<\/p>\n<p>Ultimately, I don\u2019t think the regulator has looked across the piece wide enough at the issues that affect competition rather than just simply something like Equinox 1 and 2. The whole migration of copper to full-fibre needs a closer look at how it\u2019s being orchestrated to impact competition.<\/p><\/blockquote>\n<p><strong>12. Moving away from pricing now. Ofcom were due to introduce their new One Touch Switch (OTS) migration (switching) system for UK broadband ISPs from 3rd April 2023, which was intended to make it easier for consumers to switch between providers on physically separate networks (i.e. extending the existing Gaining Provider Led [GPL] solution to include alternative networks, rather than just <a href=\"https:\/\/www.ispreview.co.uk\/index.php\/link\/openreach\" target=\"_blank\">Openreach<\/a>).<\/strong><\/p>\n<p><strong>H<\/strong><strong>owever, many ISPs and the related vehicle for this &#8211; The One Touch Switching Company (TOTSCo) \u2013 were NOT ready to introduce the system in time for the original deadline. What has been your own experience of OTS \/ TOTSCo and how long do you think before it can be fully implemented?<\/strong><\/p>\n<blockquote><p><strong><u>Neil&#8217;s Answer:<\/u><\/strong><\/p>\n<p>I can understand why there\u2019s frustration with this. Of course, it\u2019s a great idea but it\u2019s a bit like phone number portability in the days of mobile. It was a bit of a nightmare to implement but it was really important that people were able to move contract in a seamless way, so I absolutely support the principle.<\/p>\n<p>Of course, the timing has landed at a point where you have the best part of 100+ AltNets and a myriad of ISPs delivering a service, and what the OTS\/TOTSCo are describing is a really complex IT and operational set of processes, and trying to implement this quickly is fraught with risk. Certainly, at the network level, if you have multiple network operators and you\u2019re trying to run multiple IT systems it\u2019s a very difficult thing to do. So, I think the stresses that you\u2019re hearing about in OTS are really driven by the complexity of this IT and the ability to invest in this IT and the sheer volume of companies that are going to be involved.<\/p>\n<p>Again, you can point to our industry being quite poor at standards. While the industry is great at technical standards \u2013 which is why the network works \u2013 we\u2019re actually quite poor at operational standards and we don\u2019t have a regulator that\u2019s particularly enthused by engaging with operational standards, so they\u2019ve not been at the forefront of people\u2019s minds. Most operators don\u2019t have uniform operating standards as it\u2019s not required in the industry, so to then introduce a system and process that requires these uniform standards it\u2019s no wonder why it takes the industry some time to figure out how these processes are going to work.<\/p>\n<p>But ultimately, it\u2019s a good thing for consumers and it\u2019s a good thing to do, so it needs to get done.<\/p><\/blockquote>\n<p><strong>13. Finally, Over the past few years there has been a notable shortage of skilled fibre engineers, which risks causing delays to the rollout of new full fibre networks. What has your own experience of this been (if any) and do you think that the government are doing enough to tackle the issue (e.g. working to add telecoms engineers to the shortage occupation list &#8211; making it easier to hire foreign workers)?<\/strong><\/p>\n<blockquote><p><strong><u>Neil&#8217;s Answer:<\/u><\/strong><\/p>\n<p>I think at the peak of the enthusiasm for setting up AltNets and investing in full-fibre I think this was true, however I don\u2019t think it\u2019s so much of an issue now. Because with the number of AltNets building now and the amount of capital in the industry, the AltNets have managed to build the network at an incredible rate. And the industry\u2019s pretty good at adapting, so certainly with the capital that\u2019s come in they have managed to become more efficient. Things like using passive infrastructure has massively reduced the amount of civil engineering required, though this has put pressure on other types of skill areas.&nbsp;<\/p>\n<p>So yes, I\u2019m sure there\u2019s shortages and there\u2019s areas of the country where this is potentially more acute, however we\u2019re based in the North West of the UK where there\u2019s a massive labour force and a lot of associated industries where people can retrain from. So, we\u2019re not really finding those shortages at the moment, which has probably been helped by the rush of capital, the rush of build, but the slight slowdown as the industry focuses on connections rather than continuing to build at pace. Do we need a massive influx of foreign workers? I don\u2019t have an objection to it if there\u2019s a massive need for it, and maybe I\u2019m speaking out of turn slightly as I\u2019m sat in the North West and we\u2019re feeling this problem a little bit less than people who are in more challenged parts of the country.&nbsp;<\/p>\n<p>With regards to Freedom Fibre directly, we have been fortunate through our positioning and recruitment efforts to secure a number of highly skilled and highly experienced staff, and ultimately we have a heavy focus on our internal company culture to ensure these staff are happy, healthy and that we can retain that talent.<\/p><\/blockquote>\n<p>We&#8217;d like to thank Neil for taking the time to engage in our interview in such an informative way, and look forward to seeing how Freedom Fibre progresses over the coming years.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The CEO of alternative broadband network builder Freedom Fibre, Neil McArthur, has today &#8211; as part of an exclusive interview with ISPreview &#8211; spoken about some of the challenges the operator has faced in building a new full fibre (FTTP) network and called on the government to be more overtly supportive of such efforts.<\/p>\n","protected":false},"author":1,"featured_media":35275,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[2716,1],"tags":[471,472,56,38,1997,74],"class_list":["post-35273","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-interviews","category-uk_isp_news","tag-bduk","tag-business","tag-fttp","tag-politics","tag-uk-gigabit-programme","tag-talktalk"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.4 - 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