Is BT on the up?

BT signs up 266,000 new fibre broadband customers in last quarter - article from the Guardian

They say that focus on improving customer service is now a priority.

BT is bracing itself over the outcome of Ofcom's "once in a decade" review of its business, and its ongoing abuse of market dominance. With growing calls for the spin-off of BT's monopoly infrastructure unit, Openreach. Reorganising the troublesome telco could potentially become the life-saver for a lacklustre sector; one which has fallen out of vogue with major investors, and way behind its overseas counterparts.

BT's full-year results announced 7 May, the day of the British election, disappointed many in the City. Reporting weaker than expected revenues, with notable declines in sales at its wholesale and global services operations.

Experts today are stressing the urgency of a complete demerger of Openreach into a wholly separate operation. Fuelling further demands for the full-scale re-nationalisation of the infrastructure unit. A return to public ownership that could finally arrest and reverse the decades of neglect and decay in BT's ailing plant.

Only public ownership allowing the massive investment in advanced technologies necessary to build the network of the future. An abandonment of the fault-prone copper plant of yesteryear; instead revolutionising the network towards a fully fibre-based solution. Offering the gigabit speeds and network-resilience demanded by residential and business customers alike. Finally putting Britain back onto the information superhighway with a telecoms network that could be the envy, rather than the ridicule of the world.

State ownership would allow for direct injection of public money necessary to build that nationwide fibre network; the chance to roll-out a universal fibre service to every home (FTEH) in the land. BT, now heavily indebted from its controversial £13bn buyout of cellphone operator EE, has little chance of ever securing the private-funding to embark on such a large-scale venture. Consequently, its nationwide FTTH project has been quietly shelved indefinitely.

However, calls continue for a state-funded nationwide FTTH project; to be launched under the auspices of a Roosevelt-style Public Works program; an economic policy of direct state investment in critical public infrastructure. A policy key to the American System of Political Economy with its roots in the late 18th century of first US Treasury Secretary Alexander Hamilton.

That Hamiltonian economic policy of issuing Public Credit to invest in key infrastructure is the same policy that FDR used to lift America out of the Great Depression in the 1920s-30s. An era when the Anglo-American financial system imploded with chilling parallels to today's economic crisis.

Since BT's controversial privatization in 1984, its Openreach unit has remained the cash-cow of the telco. Openreach nets the BT Group around 60% of its overall profits. However, faced with an increasingly uneasy State Regulator, determined to overhaul that 30-year monopoly and BT's almost criminal neglect of plant, the future for the beleaguered telco may lie initially in "Balkanization". Breaking the BT Group into several "Baby Bells".

In the 1980s, a similar industry-restructuring worked well for US telco giant AT&T. Like BT, AT&T had also gained notoriety for abuse of market dominance. Balkanising BT could potentially see it broken-up into four or more regional telecoms operators. With organisational-breaks performed ideally along national boundaries. Those new "Baby Beattie Bells" (BBBs) then transformed into partly- or indeed fully-owned assets of the State. Allowing ultimately for the critical public-investment needed to build the telecoms network we truly deserve.

However that vision may never materialise while BT continues to forego technological progress in favour of maximizing shareholder returns.

From the Financial Times (7 May) in an article perversely entitled "Sale of networks arm would endanger broadband investment, BT says":

BT has warned that its investment in the future rollout of ultrafast broadband would be in question if the company were forced to split off the division that oversees its fixed-line network.

Gavin Patterson, chief executive, said that billions of pounds of potential investment could be at risk if a once-in-a-decade look at the telecoms sector by Ofcom, the industry regulator, called for the company to spin off its Openreach division. �It would be difficult to convince the board of BT to invest,� he said.

BT chief Gavin Patterson seems to have rather missed the point. With Openreach forcibly spun-off as a separate operation, BT would be barred, by law, from holding any equity in the new infrastructure operation.

The purpose of a demerger of Openreach is exactly that: to wrest the crumbling infrastructure from BT; to urgently reverse the 30-year hiatus on critical investment; and to start building the people's fibre network for the 21st century.

Let us start this extraordinary new challenge by bringing Openreach safely back into public hands, where we can administer the economic medicine the infrastructure so desperately needs.

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Edited by deleted (Sat 09-May-15 06:57:24)

Obviously you wish to pump out the same message about nationalizing BT over and over again on these forums.

So I'm going to remind people over and over again how bad it was when it WAS in public ownership.
Like the 2 weeks plus it took to rejoin a broken wire in my cab two which 2 people turned up to do the repair.
Like the 6 month wait for a new phone line.

Do you need reminding about how in Australia the amount of FTTH which was originally to be near universal has been quietly rowed back to much the same as BT's
Do you need reminding about how in Jersey there is a mega row over the government wanting more money for its divided out of the Jersey Telecoms thereby threatening the rest of the roll out of FTTH there - the Gov there is a bit short of cash you see........

Every time we get the public sector involved in anything there is colossal waste of money and any money the business do make is grabbed for government coffers to further waste rather than being invested in the business.

Clearly you aren't old enough to remember what an appalling job that the public sector made in running telecommunications before privatisation. A few points for you.

Post Office telecommunications was astonishingly inefficient and overmanned. At the time of privatisation is employed 260,000 people, or about 1% of the UK's adult workforce. Despite that, you could wait 6 months for a phone to be installed, and you had utterly no choice about the equipment. It was all a state monopoly. If you had an extension installed, it had to be done by the state who charged you handsomely for it. Telephone calls were also astonishingly expensive by modern standards. It was not unusual for people to put dial locks on their phones and restrict domestic calls to the evening off-peak rate and keep conversations to the absolute minimum. No long chats on the phone.

In comparison, BT employs around 85k people in the UK covering a much wider range of business. Not only is their broadband, but a whole range of IT, data network management and other services whilst in 1984 the phone system was absolutely dominant.

The talk about state investment is surely a joke too. Post Office telecommunications was starved of investment, and in 1984 the great majority of local exchanges were based on obsolete, unreliable and expensive to maintain electro-mechanical strowger equipment. A typical telephone exchange was, almost literally, like stepping back into a Victorian age. (The Strowger switch was patented in 1891). at privatisation a vast program of upgrades had to be scheduled, with the last Strowger exchange not being taken out of service until 1995. One of the reasons investment was restricted was that the Treasury would raid Post Office telecommunications for revenue. The telecommunications equipment supply industry in the UK was just as bad, expensive and inefficient, with the Post Office as a captive customer and the incredibly drawn out development of the ruinously expensive System-X exchange.

True there were some pioneering things, like international direct dialing and Tommy Flowers (of the Doris Hill Post Office labs) was memorably responsible for the design and construction of the code-breaking Colossus machine. But this wasn't really reflected in everyday telecommunications.

High costs of telecommunications was a massive brake on UK business at the time.

Then there's the little issue that BT was sold off by the government. If it was to be re-nationalised, the state would have to buy it back. Even the Openreach element would probably be worth perhaps £20bn. Then the idea that vast sums of public money would be found in addition is ludicrous in an age when the state is already strapped for cash.

Try looking at the immensely expensive public sector Australian National Broadband Network project. Adjusted for population numbers, that's costing the equivalent of £48bn, and that's after it has been de-scoped to include a lot of fibre/copper hybrid. It's also far from universal, as it will also need dedicated satellites for much of the coverage (understandable given Australia has lots of remote settlements). Of course Australia is large, but the great majority of the population live in suburbs, so it's not a wholly ridiculous comparison.

Also, the NBN is being rolled out really slowly. In terms of premises passed per month, it's only about 10% of the rate of the much-maligned BDUK rollouts.

In view of the results of the election this discussion is totally academic

Whatever the result of the election it was academic. There was never any chance that any political party would promote re-nationalising telecommunications. I'm not even sure the Greens proposed it (and they seem to want to nationalise everything).

Your seemingly total ignorance of the former Post Office and the rest of your post does you proud. Now may I suggest you move off and find a more appropriate forum for the tripe you're posting.

This proposal should have been in the Labour manifesto
In the 1970s my father waited almost a year for a phone line despite being given priority due to illness. The end of this State phone monopoly couldn't have come too soon. Even today we're still lumbered with the hangover of its generous pension schemes. The British public has spoken ...

It's refreshing to know we're broadly concordant over the desperate need to restructure the BT Group. Clearly this snivelling mess of a telco can't be allowed to limp on any longer.

Examining the train wreck that is BT today, let's take stock of the latest trail of disasters from the bunglers of Newgate Street.

FTTC Vectoring is now officially all but abandoned by BT Openreach. 27,000 ECI DSLAMs denounced as vectoring-incapable, obsolete; fit only for land-fill. What an obscene waste of public (BDUK) money. And g.inp is turning out to be no saviour either. At best, working only 50% of the time on those same wretched DSLAMs.

Furthermore, let's not delude ourselves over g.fast - it's doubtful there'll ever be a nationwide roll-out of g.fast. By the time the bean-counters at BT ever secure the private finance to pay for nationwide g.fast, it will be old technology. And what point in rolling out g.fast any way? Surely the whole raison d'etre of maintaining BT as a private-monopoly is to mercilessly gouge the consumer through an increasingly clapped-out network. While investing as little as humanly possible in it. While laughing all the way to the banksters. In the knowledge that the pitiful consumer can never take his business elsewhere. That's our Beattie!

A couple more points, getting to the devil of the detail..

Nationalising BT Openreach could cost peanuts. When Railtrack plc also went tits-up, it was renationalised overnight, in a move that rocked the City but, crucially, was at minimum expense to the taxpayer. Let's remind ourselves that government ultimately writes the rules, and we follow them, or else. Government decides the level of shareholder remuneration, if any.

It's troubling that there are still "free market" adherents here, arguing for Openreach to remain a wholly private-monopoly. Rather than returning it to public ownership, where it can contribute properly to the public purse, and the national economy. Where it can operate without making huge distributions to shadowy shareholders secreted in the Seychelles. Publicly-owned where it can benefit from juicy direct injections of state capital. Multi-billion-buck investments to deliver a fully fibre network of the future. Secured under a Government infrastructure programme based on the Hamiltonian economic model; that of the credit-based American System of economics.

By contrast, while Openreach remains in private(-equity) hands, that critical state investment in universal FTTH is strictly forbidden under EU competition law.

In pleading for BT to remain a private monopoly, you guys don't appreciate what a "free market" is supposed to be about. Go read up on classical liberal economics. Read Viner for example; stating the obvious: where private monopolies emerge they must be broken-up; to create genuinely free markets; with meaningful competition.

Boasting zero competition for the last 30 years, BT Openreach has none of that. It's like some musty relic of Mussolini's Corporatist Italy of the 1930s. Privately owned by God-knows-who. Yet protected by the State while it shamelessly loots the punters - you and me. That's the very same economic model pursued by Il Duce and Augusto Pinochet. Brits should be ashamed of themselves for allowing this; for allowing the Mont Pelerin Society et al. - the top-secret banksters actually driving today's 'neoliberal' economic policy - to foist their fascist model onto us for over three decades now.

Openreach is not functioning, by any stretch of the term, in a competitive market. By its very design, it's simply a looting operation. And since the British Government is clearly incapable of creating competition for Openreach, far better, for the Greater Good, that it be brought back into public hands.

Back in public ownership, where we can directly invest in a new FTTH telecommunications network that brings Fibre to Every British Home. What a massive 'Science Driver' that would be for Britain. With national productivity, science, cognitive and skill levels all advanced greatly. Funded through that crucial Hamiltonian Model of government-issued credit, invested directly in a FDR-style New Deal of Public Works. Bringing our critical telecoms infrastructure at last into the 21st century. As notes Bob Ingraham, a leading American academic.

Lastly, the damning anecdotes about the GPO are entertaining, if nothing else. But are they factual? Or are they just black propaganda from the 1970s? Lies conjured up in those flower-powered days by the so-called Civil Contingencies Unit to bring down the Callaghan Government? Black Propaganda to usher in the Thatcher-era of looting of public assets ("privatisations").

The head of the Civil Contingencies Unit (CCU) at the time, actually admitted a couple years back that most all of those damning "news reports" about state-industry, issued by his team during the so-called Winter of Discontent were entirely fictitious! Monstrous fibs that the intelligence-apparatus at the CCU cooked-up on behalf of Thatcher and her handlers in the Mont Pelerin Society. Black Propaganda, in fact, orchestrated by the very same oligarchic-financiers who were demanding the state-sell-offs of the GPO, the privatisations/lootings of our Water, Gas and Electricity Boards, and other public infrastructure. Fancy that!

When it comes to Black Propaganda, it's the same modus operandi whatever the field of deployment. It's called the Hegelian Dialectic; or in layman's language: the Problem-Reaction-Solution mechanism.

First phase in all Hegelian Propaganda is Demonize the Enemy - create the Problem. In this case, it was those media-portrayals of the GPO as inept, incompetent, inefficient, wasteful, costly, etcetera. Phase two is called the Anti-thesis (or Reaction). The public swallows the Black Propaganda and reacts by rallying mindlessly behind the agenda-leaders - those nasty little banksters hidden behind the curtain. And finally phase three of the Dialectic is the Solution (the privatisation itself). Same old, same old.

We can probably attribute 95% of that Hate Campaign targeting the G.P.O. to the Civil Contingencies Unit and other black propaganda outgrowths of the Mont Pelerin Society. In fact, these very same perps were telling us 2014 that state-owned Royal Mail was also hugely inefficient; haemorrhaging hundreds of millions. And it just had to be sold-off to Dr Cable's private bankster-buddies in the Dutch Antilles! Same old, same old. When will we learn? Now, what about our NHS? Isn't it time the Black Propaganda commenced on that one, to loosen it up for private sector looting?

Anyway, enough about the Nasty Party and their crooked chums in the City.

Here's how you halt a privatisation, by bringing music to our ears... Beautiful!

Edited by deleted (Wed 13-May-15 04:38:27)

What people seem to forget when slamming the GPO is that a LOT of the improvements that came since BT are thanks to modern technology. Its foolish to argue that they wouldn't have happened had the GPO remained.

Its also not uncommon for BT to take a week to fix a broken wire TODAY, particularly if its in the exchange and in any way related to broadband. So I'm unconvinced that things would be any worse.

Switching to a pure fibre based infrastructure would be the best for the people, if the infrastructure is also OWNED by the people, isn't it logic to suggest we would have a large scale roll out of FTTH by now?

The same argument was made for rail, claiming it was a shambled in public hands - but has it really gotten any better despite STILL demanding handouts of public money?

Worst case scenario, I would rather be paying for [censored] infrastructure that are paying their taxes and keeping their money in the county, than the same infrastructure where its lining some greedy sods pockets, evading taxes in foreign bank accounts.

Edited by alexatkin (Wed 13-May-15 02:21:23)