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Standard User munch1
(newbie) Mon 17-Aug-15 13:32:54
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Who owns BDUK funded infrastructure?


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We have recently found out that a BDUK funded project has commenced to provide broadband to our rural community. My understanding is that Government fund the supplier to lay cables, erect wireless transmitters/receivers and tag onto existing BT/other infrastructure.

Once the infrastructure is in place, as potential customers do we HAVE to use one supplier or is there an option? Is it a case of signing up to an effective monopoly or having to put up with super slow BB?

What is to stop the supplier raising prices, given the customers don't have another option.

Thoughts appreciated.

thank you.
Standard User ian72
(eat-sleep-adslguide) Mon 17-Aug-15 13:46:34
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Re: Who owns BDUK funded infrastructure?


[re: munch1] [link to this post]
 
Most of the BDUK projects have used BT and the infrastructure is owned by BT. But, BT is regulated and so have to wholesale the majority of their solutions to other ISPs.

If the funding goes to another provider (such as a wireless company) then the company will usually own it. I believe BDUK funding originally could only go to firms willing to wholesale the infrastructure to others but not sure if that is the case for some of the later phases - plus, even if it is available for wholesale doesn't automatically mean other ISPs will use it as it could be too much work setting up and administering the service for what is in many cases a relatively small number of users.

You would need to see individual contracts work with the wholesale aspect and I am not sure all of them require it.
Standard User TheEulerID
(member) Mon 17-Aug-15 14:06:38
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Re: Who owns BDUK funded infrastructure?


[re: munch1] [link to this post]
 
BDUK infrastructure is owned by BT Openreach (the gap funding money is received as a grant). However, there are a couple of important provisos. Firstly BT are not allowed to include this money as part of their capital investment from the point of view of calculating returns. This is important as when GEA FTTC/FTTP pricing is regulated (as it inevitably will be), then no rate of return will be allowed on this money. (The same rule applies to excess construction charges for things like private circuits). Of course if "claw-back" is invoked, and BT return some of this money then this is unwound.

Another important point is the wholesaling conditions on the infrastructure. Whilst it largely overlaps with existing Ofcom regulations, there are rules on access.

As far as how the BDUK invitations to tender where structured (which drives this), the vendors were basically required to quote for gap funding required, either against a given target coverage or how much could be achieved for a given amount of subsidy (or some point in between). The BDUK contracts are unusual in that, rather than being fixed price, they had a maximum price yet required grants to be paid on some formula against actual costs. Further, they had the "claw-back" provision to recover excess subsidy in the vent take-up exceeded the commercial model. This is very different from a fixed price quote for providing a system.

As far as wholesale prices going up, that is Ofcom's responsibility. At the moment there is forebearance on regulating wholesale pricing of GEA/FTTC & GEA/FTTP products (beyond the equivalence principle), which was a policy adopted to encourage investment. However, it was always a time-limited principle and, without doubt, Ofcom will regulate wholesale pricing as with MPF, WLR and a host of other OR products.

Indeed the NAO reports specifically note that the commercial risk of future regulatory pricing of these products is a risk BT alone bears.


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Standard User munch1
(newbie) Mon 17-Aug-15 21:50:38
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Re: Who owns BDUK funded infrastructure?


[re: TheEulerID] [link to this post]
 
Thank you both for the detailed replies. The infrastructure being put in is being done by CallFlow so presumably owned by them but utilising BT's backhaul.
Administrator MrSaffron
(staff) Tue 18-Aug-15 08:21:00
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Re: Who owns BDUK funded infrastructure?


[re: munch1] [link to this post]
 
Correct callflow cabs are owned by them, time will tell us which providers will be available beyond just callflow

The author of the above post is a thinkbroadband staff member. It may not constitute an official statement on behalf of thinkbroadband.
Standard User Fastman2
(committed) Tue 18-Aug-15 08:23:51
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Re: Who owns BDUK funded infrastructure?


[re: MrSaffron] [link to this post]
 
call flow are a SLU currently offer no services other than from Call flow
Standard User Fastman2
(committed) Tue 18-Aug-15 08:25:31
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Re: Who owns BDUK funded infrastructure?


[re: Fastman2] [link to this post]
 
call flow do not offer Ethernet GEA - (that what FTTC runs on)
they have their own cabs
Administrator MrSaffron
(staff) Tue 18-Aug-15 08:26:19
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Re: Who owns BDUK funded infrastructure?


[re: Fastman2] [link to this post]
 
EU State Aid rules mean it should have a wholesale option at least

The author of the above post is a thinkbroadband staff member. It may not constitute an official statement on behalf of thinkbroadband.
Standard User Fastman2
(committed) Sun 30-Aug-15 16:57:59
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Re: Who owns BDUK funded infrastructure?


[re: MrSaffron] [link to this post]
 
you would think so but I am sure Call flow do not a they are A SLU (Sub loop Unbundler operator
Standard User kijoma
(committed) Sun 30-Aug-15 23:43:12
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Re: Who owns BDUK funded infrastructure?


[re: Fastman2] [link to this post]
 
Yes, the wholesale provision was something many councils insisted on , however even when a provider who wasn't Openreach stated they offer/welcome wholesale it made no difference at all.

The policy is/was primarily to follow the easy/safe path , i.e. the one BDUK themselves are pushing, Openreach, the only provider left in a "competitive framework" .

You can see why they took this approach with the overwhelming bias towards it, doesn't make it right though.

But then what does when government interferes in the commercial market place smile

Bill Lewis - MD
Kijoma Broadband
Fixed wireless ISP - ISPA/CISAS/RIPE member
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