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Standard User chrisbower
(newbie) Tue 26-Jan-16 07:58:50
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Universal Service Obligation


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The BT monopoly of rural broadband rollout has clearly failed. Patchy coverage based on where BT thinks it might make a buck is no substitute for a world-class broadband infrastructure. It is time to make Openreach truly available to all.

The last review of the Universal Service Obligation was conducted in 2005. Times change and the need for high speed services has become more pressing in the last ten years. USO should now include broadband at 25Mbps. BT would claim that they cannot make a business case for such a service. OK - take the infrastructure (Openreach) away from them and give it to someone who can. This may involve some level of cross subsidy and the use of heterogeneous delivery technologies including LTE450 and satellite but it needs to be done to ensure that all who live in this country are afforded a basic level of access to Internet-based services. (And 2Mbps is not enough) If no-one wants to take up the challenge then re-nationalise Openreach and make service, rather than profit, the objective.
Administrator MrSaffron
(staff) Tue 26-Jan-16 10:08:12
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Re: Universal Service Obligation


[re: chrisbower] [link to this post]
 
Are you aware of the proposed 10 Mbps USO that was announced in the Autumn and how it will operate (e.g. which providers it applies to and who pays) are due to be thrashed out this Spring.

The author of the above post is a thinkbroadband staff member. It may not constitute an official statement on behalf of thinkbroadband.
Standard User chrisbower
(newbie) Tue 26-Jan-16 10:33:07
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Re: Universal Service Obligation


[re: MrSaffron] [link to this post]
 
Sorry - I wasn't aware - but I am pleased that someone is looking at it. A little disappointed that the speed in mind is only 10Mbps. A rather modest target to shoot for...


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Standard User Andrue
(eat-sleep-adslguide) Tue 26-Jan-16 10:44:54
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Re: Universal Service Obligation


[re: chrisbower] [link to this post]
 
Even if there were a USO it might not help as much as you think.

The USO does not mean that BT has to provide a line for free to anyone who asks. Only that they have to provide a line. If the cost is above a certain amount (£3,000 springs to mind for some reason) they are allowed to ask for excess construction charges.

OK - take the infrastructure (Openreach) away from them and give it to someone who can.

Like who? BT is the biggest telephony operator in the country, has the most experience in this area and can probably get far better finance terms than anyone else.

heterogeneous delivery technologies including LTE450 and satellite

There is already a scheme in place for satellite delivery. There was an article on The Register recently saying that 24 people had applied for the vouchers. That's probably low because most people realise that satellite is a poor to awful solution for fixed broadband installations.

If no-one wants to take up the challenge then re-nationalise Openreach and make service, rather than profit, the objective.

Which decision by which recent government has given rise to your faith in government? Have you missed their various attempts to spy on us and even restrict what we use the internet for? Have you not noticed how anything the government does is poorly budgeted and often fails to deliver what it promised? Are you too young to remember how the GPO ran the network?

Nationalisation is rarely if ever a good solution to a problem and most certainly not this one.

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Andrue Cope
Brackley, UK

Edited by Andrue (Tue 26-Jan-16 10:46:24)

Standard User Andrue
(eat-sleep-adslguide) Tue 26-Jan-16 10:50:09
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Re: Universal Service Obligation


[re: chrisbower] [link to this post]
 
In reply to a post by chrisbower:
Sorry - I wasn't aware - but I am pleased that someone is looking at it. A little disappointed that the speed in mind is only 10Mbps. A rather modest target to shoot for...
Agreed but it's reflecting the realities of the situation. Like a lot of people you seem in danger of falling into the trap of thinking poor 'rural' connectivity is somehow down to incompetence by BT. It isn't. The reason for it is that it's difficult and very expensive. BT have their faults (lord knows they do) but put simply they are the best single entity for the job. A local altnet could be better but by their nature they work more slowly and even they can't reach everywhere unless they get a lot of free labour from locals.

Upgrading and operating connectivity at a loss (what you seem to be asking for from the government) is not the answer. Even the government does not have bottomless pockets. Unless it's a Labour government of course but then look where that got us.

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Andrue Cope
Brackley, UK

Edited by Andrue (Tue 26-Jan-16 10:51:55)

Standard User WWWombat
(knowledge is power) Tue 26-Jan-16 11:17:46
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Re: Universal Service Obligation


[re: chrisbower] [link to this post]
 
In reply to a post by chrisbower:
Sorry - I wasn't aware - but I am pleased that someone is looking at it.


It is good that they're looking at it - but the process hasn't started yet, and consultations should start shortly. I imagine Ofcom will run things - and even the speed itself will be up for debate, but more importantly the idea of who pays for it.

You started this debate by saying that BT's monopoly wasn't working. The thing about monopolies is that they only work at the worst end if they are cross-subsidised by excess profit at the best end. BT's monopoly doesn't work like that: BT ends up with a monopoly that consists of only unprofitable properties because someone has competed in all the profitable places. This competition causes low prices in the best areas ... so there are no more "excess profits".

The only thing you can say about BT's monopoly is that it is a legacy from the days of no competition. In today's competitive markets, there would be no service whatsoever.

Who pays for the rural end of the market? That will be a key factor in the consultations.

In reply to a post by chrisbower:
A little disappointed that the speed in mind is only 10Mbps. A rather modest target to shoot for...


Remember that this speed would be for the worst property in the UK.

Right now, the various BDUK projects look like they will get 96% at superfast speeds - 25Mbps+. That probably leaves 3% to sit between the 25Mbps figure and the 10Mbps figure.

And, as it stands right now, 1% who are likely to have to depend on satellite.

There, 10Mbps will be a possibility. But other properties - such as latency - might show that our USO needs to be specified on more than just speed.
Standard User gillsbay
(newbie) Tue 26-Jan-16 11:18:10
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Re: Universal Service Obligation


[re: chrisbower] [link to this post]
 
The question I keep asking myself is "who would provide the universal service if BT didn't". I don't see any of the other providers rushing to cover anything other than the profitable areas, much like all the alternative mail/parcel delivery services who fail to cover large areas of the country! BT are not perfect but they are covering the whole country while seeing other companies cherry pick the profitable areas.
Standard User eckiedoo
(experienced) Tue 26-Jan-16 11:40:02
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Re: Universal Service Obligation


[re: chrisbower] [link to this post]
 
When this subject is raised, I often think of what the National Grid achieved particularly in the 1950s and 1960s, although it had to omit remote communities to a significant degree.

---

There was also the significant effort in the 1960s with the conversion from Town Gas to Natural Gas - although that had little effect on the consumer distribution system, as opposed to individual appliance modifications and also the pumping and storage arrangements at the supplier end.

(Seems similar to ADSL in a way, only the Exchanges and the final connections in the house, being affected!)

-----------

Regarding Broadband, as only about 30% have upgraded to FTTC etc in the Available Coverage of about 90%, it suggests that the majority who have not upgraded, do not feel the need to, acknowledging that there are some who do wish to upgrade but are not yet covered.

FTTC has been in this area and town for about 22 months now; and I upgraded about 19 months back.

Speaking to a recently-retired neighbour, he clearly stated that he and his wife felt no need to upgrade from ADSL, as that clearly covered their needs.

Only when his grown-up children visited with various devices, was there an apparent need - but he wasn't going to pay for what would normally be a clearly under-used facility.

----

Another example is a grandson who does a lot of high quality railway photography and uploads to his own site. He also has steady trade in selling to magazine publishers.

He and his wife live in rented accommodation at present, so he has no wish to enter in to a significant contract until in a place of their own.

If he has a large upload to do, he comes here.

---------------

Looking at the TBB Broadband Map; and particularly around this town and immediate vicinity, my 40/10 connection stands out as being generally the second fastest, with the others apparently being attributable to ADSL.

I chose the 40/10 contract on the basis of being only £1 per month more than my previous ADSL connection.

------------------

On another but similar aspect, you may have heard of the recurrent land-slides on the busy A83 road.

When blocked by such, it normally involves a diversion of 120 miles (200 Kilometres); but although some may hope, it is unlikely to be replaced by motorway or similar.
Administrator MrSaffron
(staff) Tue 26-Jan-16 11:59:42
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Re: Universal Service Obligation


[re: Andrue] [link to this post]
 
The £3,000 is to a working phone line with existing 28 Kbps USO.

No figures for the proposed USO scheme exist yet, and some politicians are already saying Ofcom has failed to meet the USO target, even though it is not enshrined as a legal right yet.

The author of the above post is a thinkbroadband staff member. It may not constitute an official statement on behalf of thinkbroadband.
Standard User gah789
(member) Tue 26-Jan-16 12:04:57
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Re: Universal Service Obligation


[re: WWWombat] [link to this post]
 
I am rather amused by the repeated assertion that monopoly profits generated by fixed line networks have been competed away in urban areas. From my knowledge no economist has ever reached that conclusion, either in the UK or in any other OECD country. In all cases, the situation is what is known as a complex monopoly - almost invariably with two competing networks, each of whom has significant market power.

The regulatory position is rather confusing because Ofcom implements a series of separate controls over access to the local loop, wholesale broadband access, leased lines, etc. Even so, none of this implies an absence of market power even in areas of competition between cable and telephone networks. The only market segment that is judged to be broadly competitive is that for leased lines in London.

In the UK - and in many other OECD countries - the treatment of cable networks is a major anomaly. There has been a traditional reluctance to regulate cable networks because they were treated as new entrants competing against the incumbent telephone networks. However, in the US that approach has been frequently challenged at both federal and state level. Treating VM as an operator with limited or no market power has been a political/practical decision based upon its weak financial state, but it is hard to justify on any objective ground.

Many people on TBB seem to think that proposals to separate Openreach are a dire conspiracy by the likes of Sky to sabotage BT. No doubt Sky would be happy but that is not the economic justification. The problem is practical. Openreach is a chaotic, badly managed and inefficient mess that is accountable to no-one. It is supposed to operate at arms length from the rest of BT so that many of the costs of separation are already being incurred but without any of the gains from transparency and separate accountability. The idea that a properly regulated and separate OR will be unable to raise funds for investment is ridiculous - put forward by people with strong vested interests and no apparent understanding of either finance or regulation. However, any transition will be far from costless and may delay current investment programs simply because of management turbulence.

The judgement about whether costs of separation would be outweighed by the potential gains is a fine one. The political tide is clearly moving against the current structure, strongly reinforced by perceptions of Openreach's failings. Whether it is fair or not, the management of BT have had several years to sort out the mess but give the impression that their real interest is in competition for content. Given this background it would be perfectly reasonable for the competition authorities to decide that Openreach will be most likely to thrive as a separate organisation.
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