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)

A bit of basic research would help the credibility of your post. The GPO (a branch of the civil service) ceased to exist in 1969. The Post Office (a statutory corporation) took on responsibility for telecommunications from that point.

Whether or not a state-owned organisation would have invested so heavily in new technology and, at least as importantly, reformed the workforce is, to put it mildly, a moot point. The history of nationalised industries in the UK is not a good one. Many that were inefficient, outdated, had poor industrial relations and survived on a diet of state subsidy and

Under the Post Office, the telephone network was already way behind that in many comparable countries (although many of those were also handicapped

As for the comparison made with Railtrack, this is ridiculous. OpenReach is not loss making and it cannot be forced into administration in the way that was done with Railtrack. It cannot thus just be picked up for trivial amounts of money. A full market valuation would have to be paid. it should also be remembered that Railtrack has £34bn (of government-backed debt) on its books which is now officially recognised as part of the national debt.

We might also consider the Royal Mail. Because of the failure of that organisation to make changes in the face of changing technology and markets, it reached the position where it was not only loss making, but was unable to fund the (£10bn) pension deficit. So in this case, the pension fund liability (£38bn) has been explicitly been taken on by the government (unlike the BT pension fund deficit of £7bn which the company is responsible for and only becomes a national liability should the company go into liquidation). In the unlikely event that OpenReach was to be nationalised, the great majority of the pension fund liability would go with it (as most of the pensioners would have been employed in the equivalent part of the business past).

The freeing of telecommunications from state control across the world has been one of the great success stories. This issue was far from confined to the UK, and much of the flowering of new technology and services can be put down to private innovation and enterprise. Governments are well placed to run things which don't work well in market economies (like social services or school education). They are generally pretty poor in markets where innovation and adaptation to markets are important. They tend to become prisoners of their own workforces and internal vested interests without the financial discipline imposed by business competition. Of course there are areas of private industry where there are barriers to competition (cost of entry to markets etc.), and that's where regulation is required. Hence Ofcom. The history is that governments are much more inclined to impose demanding regulatory requirements on external organisations than on parts of their own.

In reply to a post by alexatkin:

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. It's foolish to argue that they wouldn't have happened had the GPO remained.

Very true. And the public infrastructure of the GPO looted through Privatisation was in pretty good shape. Though BT has since woefully neglected that plant. In pursuit of profit alone, denying us timely upgrades to modern technologies, when the opportunities and needs arise.

The GPO was a trail-blazer of its time. Take for example the advancements made in exchange switching gear in the days of the GPO. Late-1970s, its System X digital switches were being showcased around the world. By early 1980s, the GPO was stripping out the antiquated and fault-prone mechanical Strowger switches from exchanges across Britain. Yet it wasn't until 1990(!) - a full six years after Privatisation - that the last Strowger was finally ditched by mean-minded BT. From day one, BT plc was a tight-arsed outfit. Same story too for the fibre-backhauls, the Synchronous Digital Hierarchy (SDH); the so-called SONET rings. BT's investment in fibre backhaul came some 10 years later than in comparable OECD countries! Thanks again to that penny-pinching mindset behind privatisation.

Echo all that with our crumbling aluminium lines. They were installed by the GPO in the 1970s - as a temporary substitute for copper. At the time, commodity speculators had created a copper scarcity hoax to ramp the metal price. It was either succumb to that extortion racket, or source alternatives to copper. The GPO plumped sensibly for the latter. Back then, aluminium lines were not an issue. The network was almost exclusively voice telephony; and voiceband only needs a channel of some 4kHz bandwidth. However, the attenuation profile of aluminium - gauge for gauge - is much less forgiving than copper. Our comms have since gone digital with ever greater needs for channel bandwidth (17MHz currently). Aluminium lines are consequently no longer fit for purpose. Growing very brittle with age, and highly reactive to oxygen, they are also very fault-prone.

You'd think by now that BT would have stripped-out all that troublesome aluminium from 40 years ago, to finally drag the infrastructure into the 21st century. But, nah! No chance! Instead, peddling any excuse not to. Since BT's flotation, its priority has always been about maximizing every goddamn penny in shareholder "value". Scummy rogue outfit.

In reply to a post by alexatkin:

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.

Too true again. Even installations of new lines are taking an eternity TODAY with BT. The Financial Times reported Friday - ("Ofcom tells BT its rivals need better superfast broadband access"; May 15):

Openreach is the division that oversees BT's network on behalf of competing providers. Since 2011, the average time between a customer�s order and the line being ready has increased from 40 to 46 working days, Ofcom found.

An average wait time of 46 working days for a new line is over two months! Pathetic! It was never like that with the GPO. And that two month wait is for new leased lines for businesses. Residential customers will be waiting even longer.

In reply to a post by alexatkin:

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 shambles 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 country, than the same infrastructure where its lining some greedy sods pockets, evading taxes in foreign bank accounts.

Sure. BT's slithery shareholders will never cough-up for nationwide FTTH. They've even called for abolishing the Universal Service Obligation (for voice telephony), as it's costing them too much! Nationwide rollout of FTTH ain't never going to happen, not while Openreach remains in private hands. BT plc has neither the cash nor the commitment, nor even the expertise these days to deliver anything so ambitious.

Bringing fibre to every home will require a huge Public Works program, of the type that President Franklin Delano Roosevelt prescribed in his New Deal program. An extraordinary era of economic development that overnight lifted America from its chronic bankruptcy of the 1930s Depression. A program funded through an economic policy of issuing Public Credit, to invest directly in critical public infrastructure. Boosting national productivity and our skillbase, and providing jobs for millions.

Contrary to the nonsense said elsewhere, Railtrack / NetworkRail is an excellent example of a re-nationalisation. Offering us a valuable blueprint for bringing Openreach back into public ownership, too. Railtrack was marketized in a similar way to Openreach. Based too on a public-accounts scam. With no direct relationship nor contract with the consumer. Reliant instead on massive state-subsidies, and the "regulated" revenues that it gouged in track access fees from the Train Operating Companies (TOCs). That same "free market" sham of privatisation is exactly how BT operates its own Openreach monopoly today.

To renationalise Openreach, its bankruptcy must be engineered first. By axing those public subsidies (BDUK); by exploiting Ofcom's "margin squeeze" investigation to impose crippling regulation, turning those eye-watering profits into crushing losses; and by imposing "conditionalities" on Openreach; conditionalities which subsequently are impossible to fulfil for lack of funds. In essence, deliberately bankrupting it. That's exactly how Transport Secretary, Stephen Byers got Railtrack back on the public books, where it is now properly financed and maintained.

The question is whether Sharon White, the new Ofcom chief, can grow the balls that Byers grew? Or, coming from a Treasury background, will she forever be looking towards the City for her prompts on regulatory policy? We shall see.

Meanwhile, industry continues its demands for spinning-off Openreach from the rest of BT Group. With the current CEO of TalkTalk, Baroness Diana "Dido" Harding of Winscombe in the County of Dorset renewing those calls.

(( Excuse the digression: Dido is eldest grandchild of Field Marshal John Harding, former chairman of Plessey, the telco-kit/weapons multinational. It was Field Marshal John Harding and General Frank Kitson who were behind the "Mau-Mau" gang-countergang insurgencies in 1950s Kenya; orchestrating false-flag terror attacks to maintain British colonial rule. A policy pursued to this day in Ireland and elsewhere. ))

Baroness Harding spoke Thursday to the Financial Times ("TalkTalk in discussions over rolling out ultrafast broadband"; May 14):

Ms Harding renewed a call for Ofcom to consider making BT split the Openreach division that controls the national fixed line network. Ofcom is starting a once-in-a-decade review of the British telecoms market, which will consider the future of Openreach among other issues in the sector.

�Openreach would be a massively better company [split from BT]. It would have a greater incentive to drive prices down [and] have the balance sheet itself to invest in the network," [she said].

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Edited by deleted (Mon 18-May-15 02:02:00)

Post deleted by MrSaffron

Edited by tommy45 (Sun 17-May-15 22:24:50)

An extended article on BT from FT:

Strategy in action: the reinvention of BT

Post deleted by MrSaffron

Edited by deleted (Wed 20-May-15 05:43:59)

Posts removed because of the content breaking our rules http://forums.thinkbroadband.com/faq_english.php#rules particularly the 'Inappropriate or Offensive Language'

Discussions of a company and the pros and cons are allowed, but keep to the facts and avoid language that may be considered offensive if you want the post to remain.

New BT report sets out ambitious goals to 2020 - The Guardian article

http://www.btplc.com/Betterfuture/BetterFutureReport/ - direct link to the report

Edited by deleted (Thu 21-May-15 12:10:04)

I think all of BDUK deployment is hauwei, as by that time BT had realised ECI was junk.

I partially agree with you, BT need to think of their shareholders plus have the huge pension pot to fund. Deployment of true fibre is not in their interests, they will spend the absolute minimum possible for as long as possible.

To say the state cannot afford such a thing is of course nonsense, the state has been voluntarily spending in the form of HS2 and tax cuts/writeoffs. But you wont get this government even considering buying openreach, they are about reducing the state not increasing it.

Note the rail line system only works how it is due to state subsidies. So those who think state involvement breaks things, look at that.

In reply to a post by edwincluck:

t'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.

I am one of those "shadowy shareholders", but I live in Lancashire. Do I need to move to the Seychelles?

Also as a shareholder how do I get these "huge distributions" from BT? At the moment BT shares are giving me a dividend that shows approx. 2.9% return on my investment. Did I miss filling in a form to get "huge distributions"?

Edited by deleted (Sun 24-May-15 13:47:58)

Thanks MrSaffron for cleaning-up Tommy's tasteless smut, and for keeping this a family-friendly forum. Your efforts don't go unnoticed. An OBE (at the very least) can't be far away.

ThinkBroadband is an oasis of common decency amidst the desert of filth out there. For that very reason I had to leave another broadband forum - which shall remain nameless. They were openly boasting about their latest porn finds, in glorious technicolor. TalkTalk's adult filter is good but it can only protect us from so much. C'mon guys, is nowhere sacrosanct these days? I really do despair. Who wants to read about "body parts" ("both male and female"), and what you can do with them, over breakfast?! I struggled to keep my Guinness down; I really did. Maybe we can start a petition to get that Lady Doodah what runs TalkTalk to crank-up her smut-filters yet again?

Cheers Edwin

.

Edited by deleted (Thu 28-May-15 13:04:42)

Apparently it will take slightly more than 2 weeks to sort out the virtual path problem that has taken my fttc line synced at 66999 down to the point where it returns sub 8 meg tap3 results. I keep hearing about the massive service improvements under BT, cant say I noticed much... certainly noticed the price hikes in recent years shame they didn't up the maintenance on my ropey old copper when they hiked the price.

Just My Opinion (and experience) .... YMMV

From: http://www.ft.com/cms/s/0/9bb648bc-2b87-11e5-8613-e7...

Watchdog probes options to improve UK telecoms market
Daniel Thomas, Telecoms Correspondent
Financial Times; Thu, 16 July, 2015

BT could be broken up under plans being considered in a once-in-a-decade review of the UK communications market to improve services for businesses and consumers.

Ofcom, the telecoms watchdog, is assessing whether current regulations need reforming to improve infrastructure and increase competition.

It signalled that the future of BT would be a major focus of the review, given concerns from rivals about the structure of Openreach, the separate business unit that manages its national broadband network.

BT must give competing providers access to its fixed line network on equal terms, but Ofcom said the current situation needed further review.

Options include making BT split off its national telecoms network to maintaining the status quo or tightening regulations.

Ofcom said the existing approach of regulating Openreach as a separate unit �delivered many benefits to consumers and businesses but also meant that BT still had the incentive to discriminate against competing providers�.

The quality of the service had too often been equally poor for everyone, Ofcom added, while enforcing the current voluntary rules �has not proved straightforward�.

Ofcom considered formally splitting Openreach in its last such major review 10 years ago that resulted in the current system.

The regulator said a split would be complex but could �unlock value and improve customer service, innovation and competition�.

Ofcom came to no conclusions in the discussion paper published on Thursday. Its probe into the future of BT was flagged well in advance, sparking a months-long war of words between the group and its rivals.

The scope of services offered by BT particularly worries its competitors, who complain about service quality and potential abuse of its position as both the main wholesale provider of telecoms services as well as a retail competitor.

Sky and TalkTalk have called for the break-up of Openreach to establish an independent national broadband network that all internet groups could use.

Sky on Thursday reiterated its request for BT to be vetted by the competition watchdog given �a history of under-investment� in Openreach that had caused poor standards of service.

BT said the improvement in infrastructure over the last decade was down to �BT investing billions of pounds in fibre at the height of the recession. That investment wouldn�t have occurred had BT been split in two a decade ago, and our ambitious plans for ultrafast broadband also depend on BT remaining intact.�

Analysts suggested that Ofcom would only move to split BT �as a last resort�. Citi said the review �kills off� structural separation as �too complex for insufficient gain�.

However, Sharon White, Ofcom chief executive, rejected this [by] saying that a split of Openreach was �under serious consideration� and that if Ofcom had wanted to kill the idea it would not be included in the document.

Ms White joined the regulator at the start of the year from the Treasury, bringing a reputation for tough decision making after leading Whitehall spending cuts.

BT has threatened to cut investment in the national network if it is forced to split Openreach. Ms White said Ofcom would take into account investment in the unit as part of its review.

Ofcom aims to make initial conclusions and set out a plan before the end of 2015.

The review covers fixed and wireless networks and services, as well as the technology groups that provide communications such as calls and texts over the internet and are increasingly siphoning revenues away from traditional telecoms businesses.

[..]

Thread about it in General Chatter. Also there is a thinkbroadband News Article.

In reply to a post by RobertoS:

Thread about it in General Chatter. Also there is a thinkbroadband News Article.

Thanks, Roberto! This is a proper men-chatting-down-the-pub sort of thread, though; about the politics of it all. How to get Openreach back in public ownership, and deliver gigabit fibre to every home, before the decade is out. In a nutshell, we must get Jeremy Corbyn into the Labour Party leadership; ready and primed for No.10.

From: http://www.ft.com/cms/s/0/34afd8fa-2bcc-11e5-acfb-cb...

The Lex team at the Financial Times is half-way to understanding the problem; the reality for Openreach is that it needs to be re-nationalised, like Railtrack was, to facilitate the massive injection of public funds to update our telecoms network for the 21st century...

ft.com > Companies > Telecoms
July 16, 2015 6:55 pm

BT and Openreach: split is hard to resist

Telecoms group�s argument against a separation of its utility business is a weak one

The Kit Kat. Separable chocolate-covered wafers. The temptation to snap them apart is almost impossible to resist. Is the same true of the urge to split linked telecoms businesses? Ofcom, the UK telecoms regulator, is pondering the question. BT, the incumbent operator, owns Openreach, which runs the main wireline network and sells access to it to operators, including its own. Over the next few months Ofcom will decide whether the set-up needs to change.

BT is firmly against a full split. Shareholders, on the other hand, could benefit from it. They would be left with a regulated, cash generative, dividend-paying utility business � Openreach � and a services business competing with Sky and TalkTalk. Shareholders do not seem to gain from owning these two businesses in the same group � BT�s services business does not get preferential rates on network access, nor (says BT) does it use Openreach�s cash flow to invest in the service business. And there may even be value in a split. BT�s enterprise value is 7 times forecast earnings before interest, tax, depreciation and amortisation. Sky, a rival to BT�s retail services business, is on 12. National Grid, a regulated utility (albeit in a different industry) is on 10.
[..]
BT says that a split would limit Openreach�s ability to invest, as having a services business allows BT to capture more of the value that investments in the network create. This is a weak argument. On that logic, BT should also own a fibre optic cable maker and the football club whose games would be broadcast on the improved network.

So the case for a split is unproven. But it merits more consideration than BT seems prepared to give it.

to facilitate the massive injection of public funds

In your dreams.

In reply to a post by MCM:

In your dreams.

What ever do you mean?! Jeremy Corbyn can make our dreams come true! A journalist friend of mine interviewed Corbyn earlier this year, and he's got some very promising policies up his sleeves.

There is a dire need for direct state investment in the physical economy; and not just the telecoms sector. With those vital infrastructure investment funds coming from a new National Bank. A bank that issues credit secured on the future access fees to public infrastructure. The issuance of credit being based on the principles of Alexander Hamilton's first National Bank of the USA.

It's been done many times before. It's exactly what China and the BRICS group of nations are doing right now, with their new infrastructure investment banks.

While rare in England where the City dominates our domestic economic policy, the issuance of national credit for public works programmes is commonplace elsewhere, especially during wartime. The national credit policy was employed during WWI, and was a mainstay of Roosevelt's economic policy before and during WWII.

The Brits might be blind and blinkered from centuries of kow-towing to the City, but once those shackles are off - and let's face it, the City has shafted the Brits - never say never!

Edited by deleted (Sun 19-Jul-15 22:23:57)

Given next General Election that Labour might or might not win is some years away can we stop posting in a manner that looks like PR for the next Labour leader, when the discussion is about changes that if they happen will start in the next year to two years.

Just think if BT, Openreach were split, & the decision made to scrap the HS2 rail link & to use that cash on Openreach instead to modernise the aging network in this country..

Much better use of money in my opinion, & they also, promoted telecommuting, could open up a lot of opportunities.

Edited by Nightglow (Sun 19-Jul-15 22:54:05)

The hs2 money while looking nice is not a single pot but costed over 10 to 15 years, not sure people will wait that long without some incremental upgrades

Then how does llu and vula work? Virgin Media have a big say as a cash strapped openreach is good for them

There been many reports about HS2 & better use of the cash & private funding.
One reported quoted the following.
London School of Economics estimated costs for 90% high-speed broadband and 100% coverage at £3.7bn
Every 10% increase in broadband penetration results in additional 1.3% growth GDP.

There was this article' Fiber Broadband: A Foundation for Social and
Economic Growth' by Sean williams (BT), from 2013, not sure where I found it.

http://www3.weforum.org/docs/GITR/2013/GITR_Chapter1...

Edited by Nightglow (Mon 20-Jul-15 09:51:20)

Yesterday's Sunday Telegraph (July 19) carries an interview with Gavin Patterson, the current CEO of BT Group.

See: http://www.telegraph.co.uk/finance/newsbysector/medi...

Patterson is threatening to delay investment in "fibre broadband" while there is uncertainty over the future of Openreach.

The difficulty with any spin-off is assigning the correct asset-value to the spun-off component of a business; in this case Openreach. For the party performing that valuation, there's a temptation to undervalue the newly-created stock to ensure a successful IPO. Historically, that is especially true with privatisations; Royal Mail's asset value was probably undervalued by many billions of pounds. If the Openreach spin-off goes ahead, shareholders in BT Group plc will naturally be demanding appropriate remuneration, for their loss of revenues.

In the week in which Ofcom formally acknowledged it was considering splitting BT, Mr Patterson said in a Sunday Telegraph interview that he would respond by stopping investment in the network and turning to the courts.

Mr Patterson said: �This is a commercial enterprise and if there�s uncertainty we will defend the rights of our shareholders, undoubtedly. It puts that investment very much at risk. At the end of it, and if we�re meant to be looking at the next ten years, what do you want to look back on? Do you want to look back at 10 years of litigation and arguments?�

BT is delaying plans for a multi-billion-pound upgrade to �ultrafast� broadband until it gets a decision on the future of the company. A split is the most radical of four options under consideration in a once-in-a-decade review.

As well as threatening to cut investment, Mr Patterson highlighted the £7bn black hole in the BT pension fund, which taxpayers would have to cover if an independent Openreach was unable to make top-up payments.

The chief executive admitted that some shareholders might prefer to cash in on Openreach with a sale but claimed his stance was supported by the majority.

All this talk of break-ups, spin-offs, re-structuring of BT Group and suspended network investment, must be giving City investors the Hebe-Jeebies. Eventually this uncertainty will reflect in the share-price of BT Group plc.

Not necessarily bad all round, though. Potentially good news for those pre-positioned in the futures market; for those investors holding put options in BT Group. Those put options purchased, fortuitously, prior to Ofcom's controversial once-in-a-decade review of BT Group.

Put options are one of the simplest ways to profit from a falling stock price. A put option is an agreement, but not an obligation, to sell shares in a stock at a pre-agreed price (the strike price) at some date in the future.

A profit is made if the stock price subsequently slumps in the time between acquiring the put option and its maturity date. The longer the uncertainty surrounds the future of BT Group, the more bearish the market; the more the stock falls, but ultimately the greater the profit made by those invested in the put futures trade on BT's stock.

Forget it. There are so many state aid and regulatory issues that it will never happen. It runs hard up against competing with privately owned investments in over half the country. Not to mention Openreach is privately owned (worth. perhaps, £15-20bn).

Ofcom and the government would spend their time better on how to work out a regulatory framework which can provide national coverage without the need for great wads of public money, even if that involves explicit levies on operators in "low cost" areas to cross-subsidise "high cost" areas. (Something which the phone USO provides for, but only because of a historical monopoly on copper pairs that doesn't exist in broadband as such).

Urm just to say I posted pointing out that the HS2 money is spread over many years, rather than a single pot.

What does high-speed broadband mean? 15 Mbps is a figure most associated with that wording, but no EU/UK formal definition.

As for ROI - most of these are actually demonstrating that the case for public money investment from Government is high, since the ROI is often NOT to the Telco building the network but many other areas. Also a lot of that paper is not based on FTTP but a mixture of C/P (just like we have) and future gazing of G.Fast

Is that supposed to be the cost of going from 90% to 100%?

If so, it certainly won't be by FTTC or FTTP from OR, Virgin or other. Nor do I believe the final 10% would have anything like that impact on GDP. The relationship will be nothing like a straight-line graph.

I admit I've only skimmed the first few pages of the link, but not seen any ifs or buts. Maybe they come later, but if not then only one side of the argument is being put.

Why would it need to be an IPO?

If it came to it then BT Group could decide to just "split the company in two" creating BT New Group and Openreach with existing shareholders having exactly the same number of shares in each. The market would then value them accordingly. Go back to when Cellnet was separated out.

IF it happens and I don't think it will or if it does it will be a long time coming - shareholders will take every form of legal action they can which would stall any separation, then conditions of ownership should be impoosed. NO overseas investors to hold more than say 0.1% and total overseas to be less than10%, Sky, TalkTalk, Virgin and others can not own ANY shares directly or indirectly ...

Very true; any spin-off need not be done as an IPO. Though BT could potentially use an IPO to relieve itself of (all?) its £13bn debt mountain; the price it will pay to acquire mobile operator EE.

Perhaps ideally, the two operations - new BT Group and Openreach - should have divergent pools of shareholders; to prevent them from acting as one again.

Is the hiving-off of Openreach that logistically difficult? Patterson reckons it is. But BT Group has supposedly been running Openreach in a ring-fenced manner any way. The banks likewise are supposedly ring-fencing their speculative investment arms from their retail banking business (so-called Glass-Steagall Lite). So, it can be done, and has been done fairly recently with, for example, Railtrack/Network Rail and the Train Operating Companies (TOCs) that were carved out of the former British Rail.

Edited by deleted (Mon 20-Jul-15 15:17:32)

The fun starts with all the continuity of service, pension funds and setting up new dedicated R&D resources. Suspect a good few staff would abandon ship too

It is possible, but so many questions and unknowns, for all we know no-one might want to invest beyond existing major BT shareholders, which would give them the largest say once again.

The Ofcom document does go through all the options, and compares to what has happened overseas, but the real thing is whether the split will make certain the new Openreach does ultrafast to NOT just match the Virgin Media coverage (expected 70% with their expansion) but will the change ensure even wider coverage.

Two ways of viewing this if you are an investor with millions to spend on FTTH roll-out, hurry up and gain a foothold now, before a new dominate independent Openreach can squeeze you out - OR wait a few years and invest in the new Openreach itself.

In reply to a post by edwincluck:

the reality for Openreach is that it needs to be re-nationalised, like Railtrack was, to facilitate the massive injection of public funds to update our telecoms network for the 21st century...

I'm not sure that Railtrack came with too many competition issues.

Unfortunately, Openreach does not own 100% of the access network in this country. Virgin has a huge amount, and is investing to expand. Other companies have cherry-picked their own plots, whether that is somewhere like B4RN for remote residences, Gigaclear likewise, Hyperoptic targeting MDUs, CityFibre targetting businesses with a residential offshoot - feeding into Sky and TalkTalk. I'm sure companies like KC, COLT and Vodafone have something of an interest too, and probably many others.

If you want the government to directly inject public funds into one part of a competitive picture, you probably need to be prepared for a fight. both the EC and all those companies.

I don't expect you have much respect for what those other companies are doing, and will aim to just run roughshod over them, but it'll be interesting to see just how you intend to do that.

In reply to a post by alext05:

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

BT still has a massive advantage over the other players simply because of the "Openreach, a BT Group Company" connection and the immeasurable value of history - I come across people EVERY DAY who are with BT and when you ask them why, they say "because that's the only choice around here" - they have absolutely no idea there's any other choice, think that the cables coming to the premises are BT and therefore BT is the choice - they don't know, or know to look, or even consider anything else.

The "only" provider by default is still very much a big deal - and BT do know it.

A very obvious example, last week I spent the day with an OR engineer working on a particularly awkward line fault, in our travels we came across 6-7 other people who spotted he was "BT" (as they put it) and then asked about broadband improvements - he was actually very good and did hold the openreach line on there being lots of people and he wasn't BT etc, but they all said "well you're part of BT, the van says so" (or rough words to the effect) and when I asked why BT... they gave the same old answer.

On that basis, even without the ridiculous marketing and incentives, they'll get a good chunk of the business without even trying.

To compete with that costs billions - and BT know it.

In reply to a post by zom22:

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.

Nothing has changed - it's taken me 6 months to get a line installed for a customer recently - yes, there was some actual work to be done that wasn't 100% straightforward, but once they finally were pushed to do it, it took 2 weeks to go from "can't be done" to "being installed" - and of course as I have no choice whatsoever, I had to play this game for a customer.

It goes without saying, if I could pick between multiple infrastructure providers, I'd get my lines installed quicker because every provider that doesn't get it sorted effectively suddenly doesn't get any business. Right now, BT Openreach doesn't have any actual competition in the majority of places.

So we do need a solution where Openreach has to face real competition by some means - and not just in a few areas - cherry picked out by them and the bigger players.

I'm not sure that I know what the solution is, or whether anything proposed hits the spot, but it is broken right now.

so where do you think the circa ira 4bn that has been invested as part of the commercial and match funding for BDUK came from !!!!

But BT Group has supposedly been running Openreach in a ring-fenced manner any way -- you been listiening to too many consipray theory -- not true / not fact

In reply to a post by Fastman2:

so where do you think the circa ira 4bn that has been invested as part of the commercial and match funding for BDUK came from !!!!

Yup, though that £2bn of taxpayers' BDUK cash arguably wasn't value for money.

Besides, with the BT board now saying it is suspending any further investment in fibre broadband while the Ofcom review is ongoing, it means BDUK funding will be the only investment!

What am unholy mess BT has created.

In reply to a post by therioman:

I'm not sure that I know what the solution is, or whether anything proposed hits the spot, but it is broken right now.

Certainly there are issues over how BT-OR is set up & operates, but there is a danger that going for the first available alternative arrangement (on an "anything-must-be-better" basis) could prove to an even more screwed-up arrangement.

For any Company/Organisation (or any system) there are always both negative & positive aspects. Often, changing things simply does that - changes things - without any net improvement (aka some details are improved, but other details are made worse).

Hence, it is essential to come up with any alternative that genuinely improves the situation - NOT just simply the "head-buried-in-sand-mentality" of "anything-must-be-better"!

In reply to a post by edwincluck:

What am unholy mess BT has created.

BT created - you mean OFCOM.

Remember, BT is OWNED by shareholders and is answerable to them.

BT's board, articulated by CEO Gavin Patterson, has decided to have a temper-tantrum over the Ofcom review of its business; a review that could potentially conclude by ordering the spin-off of its Openreach division.

It's little short of blackmail: BT intends to cease all fibre investment, while Ofcom's once-in-a-decade review is ongoing.

If that's not blackmail of the nation, then what it?

Perhaps the best plan would be to re-write the BDUK contract with BT. All those fibre cabinets purchased and installed with public money, should remain in public hands.

Though surely it's easier just to nationalise Openreach. They've screwed-up in so many ways - vis-a-vis the G.Inp and G.vector fiasco, the corporation is not responsible enough, nor competent enough, to participate in the BDUK project.

Edited by deleted (Tue 21-Jul-15 09:09:39)

The Government did not want to invest in te UK telecoms network. The Government sold off BT and took the money. Shareholders invested in the company and shareholders funds have paid for most of the BT investment since privatisation.


It is not a temper tantrum at all, he is protecting the owners of the company - those people who put him there. If the Government decided they were going to CPO your house, would you install a new kitchen or bathroom?

The BDUK investment is a small part when compared to the total investment BT has made - measurable in low single figure percentages and they are not totally publicly funded they are split funding. BT is not making a profit on those - they though, were prepared to invest whereas Sky, Virgin, TalkTalk and all the others were not interested.


IT IS OFCOM WHO HAVE CAUSED THIS, NO ONE ELSE.

If a Corbyn-led Labour Party looked as if it might win the next election, on a policy of nationalising all housing, (now there's a thought), would you buy a bigger, better house or spend money on a nice extension any time during the election campaign? Or would you sit on your money?

LOL - Snap!

They didn't screw up over G.INP. The screwup was allowing distribution of ECI modems to people on Huawei cabinets, which initially wasn't supposed to happen. But at the time, no-one knew G.INP was a possible enhancement to the system, so it wasn't particularly important.

If they had simply spotted the problem during field testing, they would have fixed it then in exactly the same way as they have done now. None of us would have known the difference and we would have been rightly pleased at the improvement on H-H setups.

In reply to a post by therioman:

In reply to a post by zom22:

So I'm going to remind people over and over again how bad it was when it WAS in public ownership.

Nothing has changed - it's taken me 6 months to get a line installed for a customer recently

The tales of woe from the days of the publicly-owned GPO are bunkum; historical revisionism, as it were. "I can remember waiting for two years just to get a dial-tone" Yeah, sure!

There was a specific unit of the British Government that cooked up these tales. It was called the Civil Contingencies Unit (CCU) and was led by ex-spook Sir Clive Rose, a Thatcherite of the far-right.

Rose admitted in interview that his Unit was told to fabricate shock-stories to demonise nationally-owned industry. By design, paving the way for privatisations of those public assets, including the GPO. It was the Black Propaganda Unit of the banksters.

All manner of lies were told in that push for privatisation; through orders passed down by international financiers via their private thinktank, the Mont Pelerin Society. These perps of the Mont Pelerin Society were the ones who actually created Thatcher, and 'her' Thatcherite policies of flogging-off-the-family-silver.

Now, as we all witness, the grass is no greener post-privatisation. The network is in a terrible mess. The copper infrastructure is long past its use-by-date. Yet privately-owned BT won't replace it; not while it can gouge a few more shekels out of us.

Answerable in the main to anonymous shareholders, BT is now minded not to invest any further in fibre roll-out, while Ofcom reviews its wider business. Someone please explain how that non-accountability of a private business is better for UK plc?

Edited by deleted (Tue 21-Jul-15 09:31:20)

All you need to know is BT is Mr Evil and can do nothing right and FTTC is a total farce.

The fact that millions seem to be getting on with live and work using the connections seems to escape some people.

The house analogy some are using is very current, as willing to bet those properties now under the proposed Heathrow footprint are going to have trouble selling or prices going down.

BT is doing exactly what Sky and TalkTalk would do if the situation was reversed.

And nationalise Openreach - which planet are you on? A fair valuation would be around £30billion, so where is your cheque book? Around £1500 per household in the UK, I am sure you can afford it and if you don't mind paying my share too.

Not responsible, not competent? Try analysing how BT has changed the telecoms market in the UK. Changes from old analog networks to full digital exchanges, early investment in "secure radio" or what is now called Cellular/GSM, development of DSL technologies - a lot of design and development was carried out by BT, airborne telephony and internet connectivity, designed and implemented the first trans-ocean fibre optic link and further development of leading edge fibre technology , interactive TV developments in the mid 90s (and then barred from exploiting it), VOIP - implemented in the early 90s.

In reply to a post by MrSaffron:

BT is doing exactly what Sky and TalkTalk would do if the situation was reversed.

Dear Mr Sky,

As you have plenty of transponder leases and the receiving equipment in UK homes, we are informing you that from 1 December you will hand over capacity to other vendors:

Virgin Media - 10%
BT Sport 15%
IPL Cricket Franchise 5%
others 10%.

The charges will be restricted to the link costs with no profit element and you will fully maintain the receivers with any upgrade required to allow reception of alternate service provided FOC.

Hope you understand,

OFCOM!




20% of yor capacity must be handed over to Virgin Media,

If there was some guarantee that a new Openreach would deploy FTTP nationally, rather than just be a continuation of what we have now then maybe value to a break up - but not sure how you do that.

Plus a nationalised local loop would then still be a monopoly in the same way, but with the full weight of Government to fend off interesting new alt-nets.

To be honest surprised the nuclear option of selling network to Sky or TalkTalk has not been put on the table.

More rubbish.

As a potential GPO customer, we had to wait over 9 months for connection. My grandmother had a wait of well over a year. My grandfather suffered with a party line for well over 10 years ...


Who are these anonymous shareholders? It is a public document that lists the all and subject ot certain privacy and data security issues, you can purchase a copy.

One big failing is that a majority of people do not realise the actual magnitude of some of the investments that BT has made and is continuing to make. They do not realise the cost of laying a connection to some of the small villages in the Highlands of Scotland - an exchange handling just 20 connections for example - tens of thousands to get a fibre connection there to allow ADSL options. Will it ever pay back? Unlikely.

People do not understand why large population centres need to be done first - to get a payback to provide money for the next phase.

There seems to be a perception that BT can just pull billions of pounds out of the air and that the costs just disappear and should never be met by the end users.

And not just investment - customers expect a cheap service then complain when a technician is not available within an hour to fix a fault. They are not prepared to pay extra to allow BT staff to be sitting around waiting and ready to jump as soon as a fault is detected.

So as the elected representative for a renewed Labour, how do they promise that a new Openreach would guarantee a national FTTP roll-out in their first term?

Irony being that based on current timescales 2020 to 2025 is when FTTP would probably be starting to be delivered in volume by Openreach anyway and maybe sooner if TalkTalk plans of 10 million FTTH homes passed on their CityFibre network start to deliver in the next couple of years.

My real worry is if there is a prospect of a nationalised monopoly people like CityFibre will not be able to undercut this network and lose interest.

The very faults of Openreach actually make it more likely that we will see three or four commercial local loops with zero risk to the public purse options for a large chunk of the UK.

The tales of woe from the days of the publicly-owned GPO are bunkum; historical revisionism, as it were. "I can remember waiting for two years just to get a dial-tone" Yeah, sure!

Rubbish. You clearly have a very short memory or are still wet behind the ears. Probably both.

There was a specific unit of the British Government that cooked up these tales.

Yet another lie and shows how little you know about pre-privatised BT and the GPO before that. Before spouting off about how lovely everything will be when nationalised I suggest you take a cold hard look at what an abject failure BT was prior to 1984.

I guess party lines were all a conspiracy too.

What is interesting is to look at the number of staff that were employed by GPO one presumes to keep Strowger running

I guess party lines were all a conspiracy too.

Please don't remind me! We (my parents) had a party line from when first installed in 1952 or so until they moved in the mid 70s. We all hated it but there was nothing we could do about it. A bit like today's EO lines.

In reply to a post by edwincluck:

Perhaps ideally, the two operations - new BT Group and Openreach - should have divergent pools of shareholders; to prevent them from acting as one again.

In what way(s) have BT shareholders been "acting as one", either to the detriment of anyone, or possibly to the benefit of anyone?

Are you actually aware of who the major shareholders in BT are, and what percentage of BT they own?

Difficult to see how you can force those funds to only invest in either BT Group or new Openreach and not both.

If behaviour like this is on the next Labour policy board which a poster seems to be suggesting then might be a lot longer than five years before they ever come back into power.

In reply to a post by MCM:

I guess party lines were all a conspiracy too.

Please don't remind me! We (my parents) had a party line from when first installed in 1952 or so until they moved in the mid 70s. We all hated it but there was nothing we could do about it. A bit like today's EO lines.

And when the other party would spend all evening on te phone so you could never make or receive a call. Or they would hold theirs "off-hook" to ensure they were not disturbed when watching TV also meaning you had no service.

In reply to a post by MrSaffron:

I guess party lines were all a conspiracy too.

What is interesting is to look at the number of staff that were employed by GPO one presumes to keep Strowger running

Plenty of them! Each had their own specific function/area of expertise too - so no multi-skilling.

In reply to a post by MHC:

And nationalise Openreach - which planet are you on?

The same planet as the government which renationalised the national rail network one balmy Friday in October 2002.

This feels like d�j� vu (all over again!)

We had the same conversation a few weeks back. So, yes, to state again, circumstances were different with Railtrack; Railtrack at the point of renationalising was indebted to the tune of £8bn; and that became the main pretext; it was in dire financial distress.

The same pretext - financial distress and unfulfilled obligations could provide the backdrop for renationalising Openreach. With BT given the ultimatum: either roll-out FTTH to x thousand homes per week or face crippling financial penalties for non-fulfilment. That's how I would do it.

A fair valuation would be around £30billion, so where is your cheque book?

A realistic valuation of Openreach is that, like Network Rail, it's priceless. The nation would be crippled without it. That's why it belongs in public hands. Some things are just too valuable, too critical to be left to a profit-driven, penny-pinching private sector.

Cheers, Edwin

Forcing that on Openreach would kill the nascent Sky/TalkTalk fibre roll-outs which they say will reach 10 million homes, so you are sure that is what Sky wants?

To complete UK wide FTTH roll-out by 2020 would require 123,000 premises to be passed per week. Current workloads are delivering 200 to 300 cabinets per week and perhaps 1000 FTTP premises passed per week, so workforce size would need to scale up significantly or you do a lot longer roll-out.

An interesting bit from today's evidence by Sharon White of Ofcom to the Commons culture committee:

Asked about comments by BT chief executive Gavin Patterson that the separation of BT and Openreach, one possible outcome of an Ofcom investigation, could lead to �10 years of litigation and arguments�, White said: �I can�t say I�m easily intimidated. Our drive is what is going to be the best possible deal for the consumer.�

http://www.theguardian.com/media/2015/jul/21/ofcom-b...

Has anyone watched it?

Lets hope that the comment is true, and similar intimidation by Sky will be dealt with in the same way. I suspect if the BT CEO had said the opposite i.e. something like 'we welcome the review and will comply without any qualms to all the decisions' there would have been a very quick devaluation of their stock as investors ran away.

Can imagine the Virgin Media CEO who holds the dominant position in the ultrafast market would say similar if investigation was to call for a divided VM.

Though the way Ofcom is getting into the consumer advice arena is hurting the independents, Ofcom sees itself as providing independent advice from the comparison calculators, but risks removing people like us and ispreview from the market.

I agree that BT and it's CEO - for the sake of shareholders - have done nothing wrong. That doesn't mean I agree with the actions taken, but they are right for BT. Ultimately a company is there to make profit for its shareholders.

Gavin Patterson has thrown a tantrum in refusing to invest in Openreach whilst the review takes place, but ultimately that's what he's required to do by law - he has to act in the best interests of the current company and this is what he feels he has to do to do that. This is what officers of a company are required to do.

Ultimately, BT as a group is better off with Openreach - they can run a less than perfect service. Every company offering phone and data services over the network has to use. This limits competition, and limits Openreach having to perform, because whilst BT Retail have to use the network and services, so does everyone else.

Now the crux is that it's best for BT to take money generated from Openreach and invest it to the benefit of other parts of the business. BT's aim is to make the group as a whole the most profitable, and the best way to do that is in areas where there's less competition.

BT Retail has a lot of competition from a phone and broadband perspective, but there's much less competition on the TV front, and especially the sports front. Instead of being a race to the bottom with hundreds of providers that they have to give equal access to their services for, with TV there's much less competition and their platform is their platform - they don't have to allow competitors to re-sell it.

I think this has led to Openreach and its network being somewhat neglected. From a BT shareholder perspective though, it makes absolute sense to take money from Openreach and use it to improve other offerings from the group as a whole. It's not so rosy from the perspective of a consumer of phone and data across the Openreach network though.

If you were to spin Openreach out, so it has a separate set of shareholders and was a standalone company - not just ring fenced in operations but actually a separate company - then it means that the officers of the company would need to operate in the best interests of Openreach. That would most likely be to invest in its own infrastructure.

The problem that it would create is that there would still be little to no real external competition - which means that either the company would need to be re-nationalised and run properly, or something like a levy or tax charged of the new separate company and then passed to competitors to build out alternative infrastructure. I don't think either solution is perfect, but I think both would be better than the current situation.

In the case of a levy or tax charged to a new spun-out Openreach, this could be used to create grants that VM, Hyperoptic, et al could apply for (a la BDUK but with Openreach excluded) to build alternative infrastructures alongside Openreach's and increase competition?

Of course, a tax could be applied to those services provided by the winners of these grants to create a circular investment into the country's infrastructure - maybe these "secondary" levies or taxes could be ring fenced for grants to provide infrastructure to areas without a minimum level of connectivity (e.g. rural, etc) until we have a decent national infrastructure?

In reply to a post by edwincluck:

BT is now minded not to invest any further in fibre roll-out, while Ofcom reviews its wider business. Someone please explain how that non-accountability of a private business is better for UK plc?

BT is accountable to its shareholders and of course it will continue to invest - if only as the BDUK contracts make it a legal obligation.

BT have always said they would continue to invest if there was a stable regulatory environment - they are not the ones changing this.

In addition, BT management could be potentially breaking the law/face lawsuits if they invested lots of money into Openreach while facing the risk of separation.

Cough £3bn underwritten by Government that is behind the Virgin Media lightning expansion and that is with VM in its current form to give UK 70% ultrafast

Openreach is far from perfect but not sold on the other scenarios as there seems no guarantees they will be better. Certainly no overnight fix is possible, so remedies that are needed in the short term might be better addressed via existing Openreach rather than a massive upheaval and uncertainty.

In reply to a post by MrSaffron:

Cough £3bn underwritten by Government that is behind the Virgin Media lightning expansion and that is with VM in its current form to give UK 70% ultrafast

Openreach is far from perfect but not sold on the other scenarios as there seems no guarantees they will be better. Certainly no overnight fix is possible, so remedies that are needed in the short term might be better addressed via existing Openreach rather than a massive upheaval and uncertainty.

The only way I think you could improve things under the current Openreach would be to not just ring fence operations but ring fence all revenues, profit and loss... In which case for both Openreach and BT Group's future prospects you may as well formalise the split with two sets of shares?

Decisions for Openreach could and would then be made in Openreach's favour and not those of the wider BT Group - which would still be the case even if you just ring fenced anything monetary within the group as there would still be the same set of officers calling the shots.

In reply to a post by MrSaffron:

Cough £3bn underwritten by Government that is behind the Virgin Media lightning expansion and that is with VM in its current form to give UK 70% ultrafast

Sorry meant to address this too. This is a very good point - but this isn't entirely what I was proposing (In know that the £3bn has already been underwritten).

I meant a levy and grants that were created specifically to fund infrastructure directly creating competition in the first instance via a levy of Openreach... Then a levy from this new infrastructure to provide grants for infrastructure to support poorly connected areas....

Edited by MrBukey (Tue 21-Jul-15 13:59:06)

Bizarre! We lived a few doors from Sir Clive, bless him! In *his* own words he admitted to running a Black Propaganda Unit tasked with demonizing publicly-owned industry including the GPO; ultimately loosening it up for privatisation. Was Sir Clive lying? Surely not; why would he?

Party landlines are a funny old legacy thing. Though it's only by putting them in context with the era that any comparison with today is insightful.

Landline ownership in the 1970s, like motorcar ownership, was way below the saturation we enjoy today. We had a party line in the early 1970s. It wasn't ideal, but we made do. We only really used the phone for emergencies and for brief voice calls to arrange appointments. Putting in a dedicated line for us eventually happened by c.1978; still pre-privatisation. The work must have cost thousands (all underground urban cabling).

It would be years before the GPO recouped its expenditure on us. But the GPO still did long-term planning; that's something you don't see very often with privately-owned BT. Today, it's all about gouging a quick buck to assauge the shareholders.

So, what relevance today in the prevalence of party lines in the 1970s, other than as Black Corporatist Propaganda, to fool us into thinking that privatisation has served us well?

We could just as easily say that data rates in the 70s under the GPO were 300 baud at best, therefore the megabit rates we enjoy today are thanks to privatisation, rather than natural technological progress.

Cheers, Edwin

In reply to a post by MrSaffron:

I guess party lines were all a conspiracy too.

What is interesting is to look at the number of staff that were employed by GPO one presumes to keep Strowger running

They were very noisy places, when racks and racks of selectors were banging away on a weekday, ear defenders would not be out of the question.

In all fairness, shared service lines were not unique to the GPO, they were more to do with an inability of many telecom company's, both private and state owned to keep pace with an every increasing demand, but the GPO along with other state providers was hamstrung by lack of investment from government. There was always more pressing demands for taxpayers cash.

I would point out the expected life span of a VDSL2 cabinet, the architecture used on the fibre splines that means G.Fast and FTTP is possible and that the exchange handovers are capable for well into the future when g.fast and FTTP is common.

The technology may naturally progress, but electronics are not sentient enough to upgrade themselves yet.

At the end of the day one side says investment is happening commercially and on the other side there are those campaigning for Government taking back Openreach as a national local loop as that will guarantee investment. The chances of that with a Conservative government is NIL, under Labour it might happen, but at five years or more for that to be an opportunity.

In reply to a post by edwincluck:

Bizarre! We lived a few doors from Sir Clive, bless him! In *his* own words he admitted to running a Black Propaganda Unit tasked with demonizing publicly-owned industry including the GPO; ultimately loosening it up for privatisation. Was Sir Clive lying? Surely not; why would he?

Somehow that doesn't ring true for this person. He would be much too aware of the consequences of such a statement becoming public knowledge to say such a thing, unless in context and in obvious jest.

(Reads ...)

He's a fascinating chap . Thanks for mentioning him. I really do think, after reading that, noo_^oo.

In reply to a post by MrSaffron:

I would point out the expected life span of a VDSL2 cabinet, the architecture used on the fibre splines that means G.Fast and FTTP is possible and that the exchange handovers are capable for well into the future when g.fast and FTTP is common.

The technology may naturally progress, but electronics are not sentient enough to upgrade themselves yet.

At the end of the day one side says investment is happening commercially and on the other side there are those campaigning for Government taking back Openreach as a national local loop as that will guarantee investment. The chances of that with a Conservative government is NIL, under Labour it might happen, but at five years or more for that to be an opportunity.

With demands for money from education, defence, the NHS, DWP and an ever increasing ageing population why on earth would government of any colour want to bring Openreach into public ownership? they may wish to regulate its operation but that is a different thing.

It appears that you have considerable difficulty in believing how dire the old GPO and early BT were when in public ownership but I would expect nothing else from an individual who considers the only way forward is to nationalise, nationalise and then nationalise again and to pay for this all by borrowing ever more money and at the same time increasing taxes thus removing the incentive to work hard.

Customers had to often wait months if not years for a new phone line to be installed, now they complain if they have to wait more than a couple of weeks. Let's hope we don't see a return to those dark ages.

That's yer man. He confided his real role in a BBC TV programme about the CCU and the so-called Winter of Discontent. While laughing it down, for sure, Rose nevertheless gave a unique insight into the dark workings of the permanent government, over which the ballot box has no influence. And we can be sure that before broadcast, the content of the BBC (2?) programme had already been thoroughly vetted and then some.

Though still quite plain to see that even the Prime Minister's office (Callaghan in that day) was obsequious to the shadow government of the security and intelligence apparatus. I haven't really got the motivation to research this again, but the Times newspaper carried just nine articles (from 1977 to 1984) about Rose and the CCU. The CCU was no secret, but then again, it's true role - as a Black Propaganda Unit - was largely hidden from the public, for obvious reasons.

There's a transcript of an interview Rose did in 2003 with Virginia Crowe. He's guarded when he wants to be; refusing to name an adversary in the TGWU, for example. (see p.38 of the interview).

This is all besides the point. All we're really doing is disputing the use of Black Propaganda to demonise publicly-owned assets; loosing them up for looting through privatisation by High Finance. This verifiably happened with the GPO/British Telecom and is not really up for argument. Thought it's interesting to see people here still caught-up on the propaganda of thirty or forty years ago. Hindsight is a wonderful thing! But remember when some clown was trying to convince us that Iraq had Weapons-of-Mass-Destruction! There's lies, damn lies, and then there's the propagandists of Her Majesty's Government!

Cheers, edwin

Edited by deleted (Tue 21-Jul-15 18:09:38)

It seems you didn't read at least some parts of my post .

In reply to a post by edwincluck:

Party landlines are a funny old legacy thing. Though it's only by putting them in context with the era that any comparison with today is insightful.

Landline ownership in the 1970s, like motorcar ownership, was way below the saturation we enjoy today. We had a party line in the early 1970s. It wasn't ideal, but we made do. We only really used the phone for emergencies and for brief voice calls to arrange appointments. Putting in a dedicated line for us eventually happened by c.1978; still pre-privatisation. The work must have cost thousands (all underground urban cabling).

It would be years before the GPO recouped its expenditure on us. But the GPO still did long-term planning; that's something you don't see very often with privately-owned BT. Today, it's all about gouging a quick buck to assauge the shareholders.

Truly fascinating how wonderful BT/GPO apparently were when it was a state owned monopoly.

The "gentleman" quoted below from another topic seems to think you are spouting utter nonsense:-

In reply to a post by edwincluck:

Dealing with the BT Group is as bad as dealing with the state-owned monopoly that it replaced! There's still that same mindset, that same mountain of bureaucracy to fight though, very poor communication, missed appointments, and endless delays.

Edited by deleted (Tue 21-Jul-15 22:46:03)

In reply to a post by MCM:

It appears that you have considerable difficulty in believing how dire the old GPO and early BT were when in public ownership but I would expect nothing else from an individual who considers the only way forward is to nationalise, nationalise and then nationalise again and to pay for this all by borrowing ever more money and at the same time increasing taxes thus removing the incentive to work hard.

One argument I've never understood is the "things would be bad in public ownership because things were bad in public ownership in the past".

It's a false dichotomy to say "things must be bad in public ownership or great in private ownership" - they're not the only two choices.

The problems of public ownership in the past were because things were managed badly and run badly. Whilst the public ownership vehicle did/can make this happen, if you have things managed properly and overseen properly it doesn't have to be the result.

When it comes to private ownership, I don't understand how a for profit company, existing to return money to shareholders, many of them run to squeeze blood out of employees, penny pinch at extreme measures and pay rock-bottom wages (all leading to low staff morale) can be more profitable than a properly-run public owned organisation that exists to plough profits back into the service....

Rock bottom wages? Where are you getting that from? Repair engineers are paid a pretty good wage.

I agree that public or private can be bad.

However, a private company ultimately needs to make a profit. To make a profit they need customers. Therefore customer service is normally important. The problem is when a private company has little or no competition.

For a public company the problem normally is down to financing. If it makes a loss then the tax payer ends up shoring it up. If it makes a profit then the profits can often be taken to offset costs in other parts of government rather than invested. Customer service is largely irrelevant as public companies are almost always monopolies.

Private companies have no real incentive to try to compete against a public company as the public company can be bailed out by the tax payer.

Public ownership should only be required where there is no driver for a private company to supply the service or where it is required for social reasons rather than business reasons.

The issue we have now is because of BDUK's failures, there is no way to create competition.

Even as a separate private company, Openreach still wouldn't have any competition.

If we had proper FTTP altnets, I'm sure Openreach would rapidly roll-out FTTP also but we don't so we're screwed basically.

Virgin compete in 50% of the country. The also have plans to increase their coverage.

Some areas are being covered by alt-nets. Once Virgin have completed their rollout plus alt nets then there could be a pretty hefty chunk of the country where there is competition at the physical level.

BDUK should end up with 95% of the country covered by a fast service. The final 5% is expensive for anyone otherwise alt nets would have jumped in and taken them. The only way they will happen is further funding for someone to provide the service - the difficulties are EU rules around procurement which generally result in BT being the most obvious choice.

Alt nets don't exist where BT are because they can't compete on price - the cost to install FTTP is just too high. So - do you want Ofcom to force BT to raise their prices so that alt nets can get a return on investment? Don't think that would go down well.

In reply to a post by ian72:

For a public company the problem normally is down to financing.

Private companies have no real incentive to try to compete against a public company as the public company can be bailed out by the tax payer.

In reply to a post by arobertson545:

The issue we have now is because of BDUK's failures, there is no way to create competition.

Even as a separate private company, Openreach still wouldn't have any competition.

I agree with the points above, this is why I think Openreach should be a separate private company, with a levy or tax on every line/service they provide.

This should then be offered up as grants to everyone except Openreach on condition that it is used to finance infrastructure directly in competition with Openreach.

That new infrastructure should then have a levy or tax on it that can be offered up as grants - to any company including Openreach - for building infrastructure in poorly connected areas (e.g. rural).

In this way Openreach's directors would be responsible for only Openreach and it succeeding (rather than what is best for a wider BT Group), and investment could be generated for competition and competing infrastructure - which then could make a return to generate investment for areas deemed less/not commercially viable....

Edited by MrBukey (Wed 22-Jul-15 10:56:30)

TalkTalk and Sky are talking of 10 million FTTP network of their own in the next few years, though city based largely

On the BT raising prices, with LLU that was exactly what happened and for those where LLU has not arrived it is increasingly unpopular

In reply to a post by MrBukey:

In reply to a post by ian72:

For a public company the problem normally is down to financing.

Private companies have no real incentive to try to compete against a public company as the public company can be bailed out by the tax payer.

In reply to a post by arobertson545:

The issue we have now is because of BDUK's failures, there is no way to create competition.

Even as a separate private company, Openreach still wouldn't have any competition.

I agree with the points above, this is why I think Openreach should be a separate private company, with a levy or tax on every line/service they provide.

This should then be offered up as grants to everyone except Openreach on condition that it is used to finance infrastructure directly in competition with Openreach.

That new infrastructure should then have a levy or tax on it that can be offered up as grants - to any company including Openreach - for building infrastructure in poorly connected areas (e.g. rural).

In this way Openreach's directors would be responsible for only Openreach and it succeeding (rather than what is best for a wider BT Group), and investment could be generated for competition and competing infrastructure - which then could make a return to generate investment for areas deemed less/not commercially viable....

I have a feeling that the EU may not like the idea of what is essentially a taxpayers subsidy not open to all, including Openreach, who may wish to get their hands on it.

In reply to a post by MrBukey:

This should then be offered up as grants to everyone except Openreach on condition that it is used to finance infrastructure directly in competition with Openreach.

That's never going to happen, that would be seen as anticompetitive (even though it isn't).

I just cannot understand how out of 650 MPs, not one has said that we should have FTTP.

In fact, why wasn't one of the conditions of BDUK FTTP? Why does OR get to do it via an alternate technology?

Edited by deleted (Wed 22-Jul-15 11:37:42)

In reply to a post by MrSaffron:

TalkTalk and Sky are talking of 10 million FTTP network of their own in the next few years, though city based largely

And will most of the properties already have FTTC and Virgin available? It may increase competition but probably not footprint.

In reply to a post by MrBukey:

When it comes to private ownership, I don't understand how a for profit company, existing to return money to shareholders, many of them run to squeeze blood out of employees, penny pinch at extreme measures and pay rock-bottom wages (all leading to low staff morale) can be more profitable than a properly-run public owned organisation that exists to plough profits back into the service....

Just think. If that were applied to supermarkets, how much cheaper and known price food would be. Easier and quicker to buy from as well, as no need to go to three or four of them to get the cheapest baked beans from one and the cheapest tomato soup from another.

Plus better pay for the staff, and better conditions for them.

Lots of land released for brownfield house-building as well.

Edited by RobertoS (Wed 22-Jul-15 13:23:38)

In reply to a post by arobertson545:

In reply to a post by MrBukey:

This should then be offered up as grants to everyone except Openreach on condition that it is used to finance infrastructure directly in competition with Openreach.

That's never going to happen, that would be seen as anticompetitive (even though it isn't).

In reply to a post by systemx:

I have a feeling that the EU may not like the idea of what is essentially a taxpayers subsidy not open to all, including Openreach, who may wish to get their hands on it.

The idea can be tweaked to make it fairer to the market, and not to specifically apply to Openreach... How about making it so that a levy is charged on all broadband and phone lines/services - and the revenue generated is used for grants for areas:

Where either:

- There is only one incumbent infrastructure, and that incumbent can't apply for the grant. Once there's a choice of a minimum of two providers everywhere this could be increased to be a minimum of two infrastructures instead of one. Ultimately ending up with a minimum of three competitive infrastructures in any single location.

or areas that are:

- Identified as a poorly connected area and anyone can apply. This would allow for the term poorly connected to be redefined as the bottom bar is raised.

In reply to a post by RobertoS:

Just think. If that were applied to supermarkets, how much cheaper and known price food would be. Easier and quicker to buy from as well, as no need to go to three or four of them to get the cheapest baked beans from one and the cheapest tomato soup from another.

Great idea ... force Sainbury's to stock the value ranges from Tesco, Waitrose and Asda - each in a dedicated aisle!

And then make them open up a branch in every remote village.

Edited by MHC (Wed 22-Jul-15 14:49:04)

My expectation is yes probably a major overlap

History repeats

http://www.thinkbroadband.com/news/4205-phoneline-ta...

and got thrown out in the closing days of the last Labour Government

In reply to a post by MrSaffron:

History repeats

http://www.thinkbroadband.com/news/4205-phoneline-ta...

and got thrown out in the closing days of the last Labour Government

Interesting! I'd happily pay 50p a month on my bill.

Heck I'd be happy if it was applied to my phone and broadband connections separately. With both my VM and Zen services that'd be £2 a month for me - I'd be happy if it meant that broadband infrastructure improved for poorly connected areas and increased competition in better connected areas....

Openreach will be OK. Labour are un-electable. Apart from the Blair era, when he embraced aspiration and enterprise, labour have not won an election in 41 years, which takes us back to Harold Wilson. It will stay that way while Jeremy Corbyn's Marxist campaign team claim that the Tories are planning to 'Gas the poor' at 1:25 lol
https://www.youtube.com/watch?v=JQX6rOfeqe8

Edited by professor973 (Wed 22-Jul-15 16:09:42)

In reply to a post by MrBukey:

Interesting! I'd happily pay 50p a month on my bill.

I think you will find that you're in a very small minority - hence the proposed tax being scrapped.

In fact, if you asked most people (not necessarily on this site), they could probably find better uses for the BDUK funds as well - rather than being spent on 'rural' broadband infrastructure.

In reply to a post by gt94sss2:

In reply to a post by MrBukey:

Interesting! I'd happily pay 50p a month on my bill.

I think you will find that you're in a very small minority - hence the proposed tax being scrapped.

In fact, if you asked most people (not necessarily on this site), they could probably find better uses for the BDUK funds as well - rather than being spent on 'rural' broadband infrastructure.

Maybe, but 50p a month (or £6 a year) is affordable to someone that is paying for a phone line and broadband already. The full £6 for a year is less than two pints in most of the UK. Would it really be that much of a contentious issue in the grand scheme of things?

Trouble is that same argument can be made over and over again. We'll put 50p on this, 50p on that and that and that...

What says that the 50p is best spent on providing broadband than as a tax that is spent on welfare or defence? We already pay taxes. If additional tax is required then there are many other ways to raise it rather than arbitrarily on a services bill that would then need to somehow be collected to a central pot and then distributed.

Part of the argument was for people who need a phone line for contact but do not have a lot of money - therefore there would be exemptions for sections of society - but who manages the exemptions?

How much does it end up costing to collect and manage the extra 50p?

It was five years ago, i.e. many did not feel the need to subsidise those in rural areas in such a direct manner

Maybe sentiments have changed but I doubt there has been a massive swing.

Proposing a 50p extra per month to fund an improved NHS would probably be more popular.

None of the parties attempted to make a big thing of broadband in the recent election race which says a lot.

In reply to a post by MrBukey:

Maybe, but 50p a month (or £6 a year) is affordable to someone that is paying for a phone line and broadband already. The full £6 for a year is less than two pints in most of the UK. Would it really be that much of a contentious issue in the grand scheme of things?

Probably, yes.

The argument would go like this:

A telephone is a critical service - why make it more expensive?

If someone is

a) poor/unemployed
b) on benefits
c) doesn't want internet access

why should they subsidise others when there are other things additional tax revenue could be spent on which would benefit the.

Also, consumers are very price sensitive - note the adsl can be secured for only £2-3/month so you're asking them to effectively pay for another 2/3months service - which they will notice..

Maybe, but 50p a month (or £6 a year) is affordable to someone that is paying for a phone line and broadband already. The full £6 for a year is less than two pints in most of the UK. Would it really be that much of a contentious issue in the grand scheme of things?

Why should those of us who have paid to have FTTC installed (gap funded upgrade) also have to pay for others to be upgraded other than via general taxation?

In reply to a post by gt94sss2:

why should they subsidise others when there are other things additional tax revenue could be spent on which would benefit the.

It's swings and roundabouts. I don't (and can't) have kids - why should I pay as much tax as everyone that has kids to go into the system for their health and education?

The answer is because a small sacrifice by me is for the greater good of all. It's unfeasible and unworkable to have completely customised taxation plans where everyone chooses to only put into what they want to put into - unless you privatise everything and it becomes a dog eat dog world with every man, woman and child for themselves.

Better broadband for all does help people's lives with more and more services going online. It would would help for education for all. Those in formal education have easier access to resources, and everyone has access to resources that aid continuous life learning.

In reply to a post by MCM:

Why should those of us who have paid to have FTTC installed (gap funded upgrade) also have to pay for others to be upgraded other than via general taxation?

You paid to get FTTC installed when you had it installed; you got what you paid for. However under an idea such as that I'm proposing competition would be increased in all areas as grants would become available for infrastructure to be provided.

This is likely to result in you getting FTTP or similar much sooner and without you having to put your hands in your pocket in the same way again - as well as raising other's connectivity up which would drive online usage which would get companies and organisations to increase their online services and offerings.... Of which we all would benefit.

Add to this the jobs that would be created in rolling out and maintaining more infrastructure, jobs with companies and organisations increasing their online services and offerings....

Extra jobs would help offset those concerns with people not being able to afford 50p a month. I've read somewhere recently that an increase in average broadband speeds has shown a direct correlation to an increase in GDP...

Surely all of this has to be a good thing? For the sake of 50p per month per line....?

Edited by MrBukey (Wed 22-Jul-15 17:18:42)

In reply to a post by MrBukey:

You paid to get FTTC installed when you had it installed; you got what you paid for. However under an idea such as that I'm proposing competition would be increased in all areas as grants would become available for infrastructure to be provided.

There is a reason some things are described as natural monopolies - it isn't economically sensible to build duplicate infrastructure when regulation and price controls can be applied to the existing operator

In reply to a post by MrBukey:

Better broadband for all does help people's lives with more and more services going online.

Better broadband for all might - its arguable. Duplicate infrastructure is not such a great idea.

However, some may also make the case that those who live in 'rural' locations often chose to live there and so should not expect others to "subsidise" their lifestyle decisions.. increasing prices for the majority to help a minority

As for internet access and education, its why many libraries now offer access to the net.

In reply to a post by gt94sss2:

Better broadband for all might - its arguable. Duplicate infrastructure is not such a great idea.

However, some may also make the case that those who live in 'rural' locations often chose to live there and so should not expect others to "subsidise" their lifestyle decisions.. increasing prices for the majority to help a minority

As for internet access and education, its why many libraries now offer access to the net.

Okay, so if there's no duplicate infrastructure then surely that makes an argument for nationalisation over a private company that has a department that may be ring fenced in operation, but whose aims are best served by taking the revenue and push into their other endeavours?

Library services that are having their hours cut, their budgets cut and their services reduced - and open whilst most people are working or within their proper education - are not the same with regards to Internet access around the clock at home. Add to that the limited number of computers that can be in a library vs private homes where a lot of people have computers, tablets, phones and TVs that can all connect to the Internet.

Add to that the costs of providing computers, Internet access (lines, hardware, security maintenance, etc. etc) - surely this money would be better spent in improving infrastructure to peoples homes than just a few people at a time in a limited availability library?

If you go down the no duplicate infrastructure then this new national Telco will only ever address coverage in under 30% of the UK.

Virgin Media is expected to hit 70% in 2017 and people like Gigaclear have an increasing Gigabit presence too. I can get altnets will have a lot to say about a nationalised Telco particularly if it is competing with their plans.

Don't put down the library option immediately, at an EU event 3 years ago Romania got a lot of congratulations for ensuring all its libraries were fast enough and farmers apparently happy to go to them to do their filing and e-paperwork. Wi-Fi can increase ability for more people to use access, and this can be done securely so that transactions are safe enough.

I realise that this is a rather academic thread but Openreach is not going to be nationalised either now or in the future, there is no spare cash to do it and more importantly no public demand for it. MPs can be viewed occasionally on the Parliament Channel moaning about BB performance in their constituency, but they go no further than perhaps a call for Openreach to be split from the rest of BT and to stand as a private company.

I'd bet if a provider (no matter whether BT or Virgin Media or someone else) ensured that MPs had good broadband in their homes that the moans would be a LOT less.

In reply to a post by MrSaffron:

If you go down the no duplicate infrastructure then this new national Telco will only ever address coverage in under 30% of the UK.

Virgin Media is expected to hit 70% in 2017 and people like Gigaclear have an increasing Gigabit presence too. I can get altnets will have a lot to say about a nationalised Telco particularly if it is competing with their plans.

Don't put down the library option immediately, at an EU event 3 years ago Romania got a lot of congratulations for ensuring all its libraries were fast enough and farmers apparently happy to go to them to do their filing and e-paperwork. Wi-Fi can increase ability for more people to use access, and this can be done securely so that transactions are safe enough.

Personally I believe in duplicate infrastructure for phones and broadband - it will create competition that will drive innovation between companies and ultimately I think consumers and businesses will benefit.

With regards to the library option, I think it's something worthwhile as having, but I wouldn't suggest that it should or could replace driving forwards Internet availability at home in the UK from 2015 onwards.

3 years ago was a very long time in the Internet, and Romania isn't the UK. Library access of Internet started properly in 1992 or 1993 if I remember correctly when it went into ITPoint in Chelmsley Wood Library in North Solihull. This was funded by the European Union and I think it was one of the uni's in Birmingham that implemented and maintained it.

I know this because I was one of its main users. I had access to BBS's at home, but didn't have more than an Atari 502STE as that's all my folks could afford. Having access to PCs with CD ROMs at school (which was unusual) and then at the library along with Internet access at the library was fantastic...

Unfortunately even back then you had to sign up to access slots, and whilst there were only 6 computers available, you might be lucky to be able to get an hour or two per week - and computer usage was much, much lower, and I even had to explain what the Internet was to practically everyone....

As I say, it was a different world back then. I think library Internet access has its place, but if you could only either put Internet access in libraries or improve infrastructure for everyone, I know which I'd choose... And I know which of the two options I think gives more benefit to more of the population overall...

In reply to a post by systemx:

I realise that this is a rather academic thread but Openreach is not going to be nationalised either now or in the future, there is no spare cash to do it and more importantly no public demand for it. MPs can be viewed occasionally on the Parliament Channel moaning about BB performance in their constituency, but they go no further than perhaps a call for Openreach to be split from the rest of BT and to stand as a private company.

I agree; I only suggested nationalisation in response to the "natural monopoly" idea.

I don't think allowing Openreach to be a monopoly and not driven by market forces is a good outcome. In my mind you either have to have a plan to increase competition (and therefore allow Openreach to be driven by market forces) or you need to have it in public hands; I don't think public hands is the right choice of the two, but is better than it being a virtual monopoly as part of a wider BT Group.

In reply to a post by MrSaffron:

I'd bet if a provider (no matter whether BT or Virgin Media or someone else) ensured that MPs had good broadband in their homes that the moans would be a LOT less.

Yes I agree, I am as cynical as you it would seem.

You paid to get FTTC installed when you had it installed; you got what you paid for. However under an idea such as that I'm proposing competition would be increased in all areas as grants would become available for infrastructure to be provided.

You simply don't understand as is evident from your multiple posts. My neighbours and myself have paid over £18K to have FTTC installed and you then expect us to pay yet again so that others can benefit.

I've had a brain wave, why don't you pay 50p per month for each of those users who have already paid considerably more than that to get what was I suspect from your signature, where you mention having both VM cable and FTTC, provided to you on a plate for free.

In reply to a post by MCM:

You simply don't understand as is evident from your multiple posts. My neighbours and myself have paid over £18K to have FTTC installed and you then expect us to pay yet again so that others can benefit.

I've had a brain wave, why don't you pay 50p per month for each of those users who have already paid considerably more than that to get what was I suspect from your signature, where you mention having both VM cable and FTTC, provided to you on a plate for free.

I have started paying £92 per month for my Zen service. I am paying about £80 per month (admittedly including TV) for my VM service. Both are primarily for broadband access. I am paying more than most, I am happy to pay more than most for the services I provide - and on top of that I would be happy to pay a levy which would ultimately improve access for all and I would directly and indirectly benefit over time.

If costs halved tomorrow for all, and everyone was given the same speeds as me, I wouldn't expect the premiums I'd paid to date to get those services to be refunded.

Your neighbours and yourself have paid over £18k to get what you have. That was your choice, and you have got what you've paid for. If you were able to pay over £18k, then 50p a month isn't going to break your banks.

What you're effectively saying is, "We paid for this - no-one else is allowed to have anything similar unless they pay the same as us!". That kind of attitude leads to complete stagnation of broadband services in this country. Which curtails jobs that better infrastructure could bring.

You're right - I don't understand your point of view. I'm trying to, but ultimately I really can't get my head around it (short of selfishness, but I really don't want to be rude or cause an argument).

I've been an early adopter of many products throughout my life. I've paid for them. Sometimes the price has dropped rapidly and others have benefited because of the investment I made early on. I'm not bitter about it.

When you pay for any service or product, your ££££'s go into R&D, scaling up, taxes and such like in order to make things cheaper for future customers of both those companies, the industry as a whole, and other industries (through non-ringfenced taxes). What I suggest isn't really any different...

Edited by MrBukey (Wed 22-Jul-15 18:56:15)

As I said you appear to have a comprehension problem. The UK population aren't prepared to pay a broadband tax to enable others to get faster broadband and no electable UK government is going to go through with such a plan. I for one am not prepared a penny, other than via general taxation, to allow others to get faster broadband until such time as my neighbours and myself have been repaid the £18+K we paid out to allow us to enjoy the same benefits that others such as yourself got for free.

May I suggest that instead you gift your bank details to OR to allow them to provide faster broadband to those with less spare cash.

They didn't get the FTTC "free", they paid for it out of their taxes.

hat you're effectively saying is, "We paid for this - no-one else is allowed to have anything similar unless they pay the same as us!". That kind of attitude leads to complete stagnation of broadband services in this country. Which curtails jobs that better infrastructure could bring.

As I stated, you clearly have a comprehension problem. What I said is that I and I suspect the majority of the UK population am not prepared to pay a broadband tax OTHER THAN AS PART OF GENERAL TAXATION.

The poster with attitude is yourself but that's no surprise given your inability to comprehend what others have posted in this thread.

They didn't get the FTTC "free", they paid for it out of their taxes.

I wasn't aware that the government had funded Virgin Media nor contributed to BT's commercial roll-out. Further, as I clearly stated, I have no problem with additional fast broadband access being funded, in part, from general taxation.

My apologies, I thought you were referring to the BDUK roll-out.

In reply to a post by MCM:

As I said you appear to have a comprehension problem. The UK population aren't prepared to pay a broadband tax to enable others to get faster broadband and no electable UK government is going to go through with such a plan. I for one am not prepared a penny, other than via general taxation, to allow others to get faster broadband until such time as my neighbours and myself have been repaid the £18+K we paid out to allow us to enjoy the same benefits that others such as yourself got for free.

May I suggest that instead you gift your bank details to OR to allow them to provide faster broadband to those with less spare cash.

I don't have a comprehension problem, I see where you're coming from - I just disagree that it's a bad idea.

Asking you to pay 50p per month in the future which would drive competition, increase availability of FTTC and then FTTP, create jobs, increase the services that were offered online, etc, etc is very different to me gifting my bank details to OR.

Ultimately your neighbours and yourself paid money to be early adopters - there was no exclusivity offered as part of that purchase, and there was no guarantee offered that others wouldn't be allowed to enjoy the same benefits as you have bought.

Your investment probably did pay for cables to pass to the cabinet, and additional infrastructure could end up being run off of the infrastructure you paid for.

Quite often, with FTTC as an example, the first household pays more than other households that end up using the same infrastructure (eg Openreach digs a trench and puts in a duct that passes other households, but the first household pays for the initial trench to be dug and ducts to be put in).

Ironically my idea would get you faster Internet sooner and probably at less (additional) personal cost. Selfishness and one-upmanship (or a desire to be faster than everyone else, even if it means slower broadband for you in the medium to long term) appears to be the driving force between your stance?

Anyway, I think I'll bow out - we obviously have differing views, and that's fine. I believe a tax would be a good thing, you don't. You're almost certainly right tin that it won't happen - scarcity in supply and demand and lack of competition seem to be big with Conservative governments. It's not good for (the bulk) of consumers though.

Quite often, with FTTC as an example, the first household pays more than other households that end up using the same infrastructure (eg Openreach digs a trench and puts in a duct that passes other households, but the first household pays for the initial trench to be dug and ducts to be put in).

That is just not the case. The only times people pay more for FTTC is if BT are not going to rollout and the community decide to fund it instead (as MCM presumably has done).

Otherwise the costs of installing a cab are shared amongst all users, present and future. If too few people sign up then BT make a loss on the cab.

As per my previous post there are too many issues with a levy on lines and would cost too much to manage. Whereas doing it via general taxation is a tried and those in society who earn most pay most (well, except those that dodge taxes - but that is a whole different subject).

As for the comparison with schools they come out of general taxation. If it was a levy on parents who currently have children in schools then you would find people would be up in arms over it - but this is what you are suggesting for broadband. Personally I would be very happy not to pay for schools as I don't have kids either but it is part of my social responsibility - the same as the fact I pay towards BDUK despite the fact my cab was enabled under commercial terms rather than social good.

In reply to a post by ian72:

Otherwise the costs of installing a cab are shared amongst all users, present and future. If too few people sign up then BT make a loss on the cab.

If its a BDUK cabinet it is, effectively, the Government that make a loss right?

Openreach have already been paid.

Depends on the level of gap funding Government paid for.

The idea of loss is different for BDUK, since by having a cabinet enabled even if not one person subscribes you have added the potential for people to use it and thus uk.gov gains from higher coverage figures and meeting the target.

It might fail value for money criteria, raising a question over whether investing elsewhere would have been a better option.

Cash-rich cellular operator, Vodafone plc, has promised to invest in Britain's fibre infrastructure; but only on condition that Openreach, the network operator, is spun-off from the rest of BT Group.

From The Guardian (July 24, 2015) -- http://www.theguardian.com/business/2015/jul/24/voda...

Vodafone says it would invest if BT's broadband arm becomes separate firm

Vodafone has fuelled the debate about the future of BT, saying it would be prepared to become a shareholder in any new company owning the UK�s largest telephone and broadband network.

Rivals are calling for BT to be split in two, with its Openreach division, which builds and maintains its network of copper and fibre-optic cables, spun into a separate company. Telecoms watchdog Ofcom is considering the idea in its first strategic review of the broadband market for a decade.

�We would be prepared to put equity in a vehicle that could deliver fibre to us and also other companies, whether it is an independent Openreach or a similar vehicle,� said Vodafone�s chief executive, Vittorio Colao.

[...]

A condition for Vodafone�s investment in a national broadband company would be that all internet service providers, such as Sky, TalkTalk, Vodafone and the rump of BT, would have equal access to its cables. Colao said any new infrastructure should be of the highest quality, with fibre-optic cables running all the way to the doorstep of homes and businesses. Fibre to the doorstep allows speeds of up to 1,000 megabits per second. This compares to an average UK speed of 23 megabits per second.

BT last week warned a decision to split the company in two could lead to a decade of litigation. Instead, it is proposing to invest an estimated £4bn over ten years to upgrade its broadband service with a technology called G.fast. This would use new equipment on old copper wires, allowing download speeds of up to 500 megabits per second by 2025. Upload speeds � transferring data from computers to the internet � would be slower.

In a jibe at BT�s massive investment in football broadcasting, Colao said: �It�s important that the UK gets more fibre and not more expensive football.�

In Italy, Vodafone has teamed up with rival mobile operator Wind to offer to buy a stake in the partly state-owned fibre-optic company Metroweb. The Italian government is planning to invest �6bn (£4.2bn) to build high-speed networks across the country.

Vodafone is advocating using Metroweb as a vehicle for a shared national fibre infrastructure, and Colao said the same could happen in the UK. Such a project would avoid wasted resources, he argued, by deterring fibre companies from digging up the roads twice to build competing networks in the same neighbourhoods. �It�s better to share, and compete at the service level, rather than all build in the same areas.�

Is there anyone serious left, beyond the corporate stooges and shills, who still wants Openreach to be shackled to BT Group?!

Dedicated thread.

Bit more in the Evening Standard (Fri July 24) on the urgency to breaking-up BT Group..

From: http://www.standard.co.uk/business/business-news/vod...

Vodafone CEO issues a three-pronged ultimatum to BT Group:

..[Vodafone] Chief executive Vittorio Colao... launched an attack on BT and its ownership of Openreach, the network business which the regulator Ofcom recently said could have to be separated from BT.

Vodafone, like Sky and TalkTalk, has to use Openreach to deliver its broadband to customers in their homes.

"It is a classic case of a monopoly company holding the country to ransom,� said Colao.

�We are used to that across Europe but don�t really expect it in the UK. BT�s priority seems to be buying more expensive football content rather than investing in the fibre network this country needs.�

[...]

He wants Ofcom chief executive Sharon White to recommend a break-up of BT, but if she doesn�t he has three demands for an improved Openreach :-

* �There must be access to fibre and ducts at a reasonable price,� he said.

* �The service provided by Openreach must become world class, not the mediocre service we get now. "; and

* "Access to content for everyone must be at a decent rather than exorbitant price.�

I do believe Openreach perhaps should be broken up but there really is nothing to stop Vodafone rolling out their own fibre network...

g.fast over the next 10 years doesnt fill me with excitement, I say split it off.

Are BT trying to claim circa 400m a year investment is a lot?

I think the writing is on the wall for Openreach. People might argue against it but it is quite understandable that people think that Openreach and BT act as one. After all, even if they don't, they both have the same parent company. You really trying to tell me that they don't ever talk to one another on the next up and coming advance. As for the consequences of hiving off Openreach, not much different from National Grid. Has the electricity supply fallen over yet since that happened. Nope. You'd get the same result with Openreach being on it's own. Shareholders can be a pain, they can be a blessing but given the recent report that too much money (percentage wise) is being paid out to shareholders generally by a lot of companies with investment suffering as a result, maybe a break up wouldn't be such a bad idea.

And someone mentioned that the old PO setup used to take weeks to do anything. Even Openreach took over 6 months to get my phone line reconnected. Reason? Lack of infrastructure investment at the local level. And of course, millions of £££ have been paid out from Government sources via BDUK to pay for the upgrades in many places around the UK. Even though fibre hasn't quite got here (they put the cabinet in place last week) I do know that if the government (and the EU) hadn't coughed up the money, we'd still be waiting for some sort of modernisation of anything if Openreach/BT had their way. Sometimes to have to lose money to make it.

The current setup has had its day.

I do wonder what exorbitant price means.. especially when you look at Mobile Data charges ??

So perhaps there should be a spun off mobile infrastructure supplier (nationalised or otherwise) and then we just see competition on top of that ?

Interesting debate and I can see pro's and con's to each side.

In reply to a post by Pgre:

I do wonder what exorbitant price means.. especially when you look at Mobile Data charges ??

So perhaps there should be a spun off mobile infrastructure supplier (nationalised or otherwise) and then we just see competition on top of that ?

Interesting debate and I can see pro's and con's to each side.

The thing that's different about mobile though is that the different networks own different infrastructure (I know there's mast sharing and mergers etc. but they do) so if you get a rubbish signal on one you can go to another and chances are you'll get a signal there. That's competition as it is in the respective network's interest to improve signal so they can get more customers in that area.

Not the same on the landline side...

What we have now is an illusion of competition. I can go to any ISP but my broadband will always be as poor (or not) as anywhere else I go. Granted different ISPs might be able to get Openreach to do more (AAISP comes to mind) but the fundamental infrastructure is the same and even if Openreach is split off, that won't change.

And like I've said, we had a chance to change this but the Politicians took the easy way out and fixed the problem for five years. We'll have the same problems again in 10 years and I wonder who the money will go to then...

Edited by deleted (Sun 26-Jul-15 11:05:12)

In reply to a post by 69bertie:

I think the writing is on the wall for Openreach. People might argue against it but it is quite understandable that people think that Openreach and BT act as one. After all, even if they don't, they both have the same parent company. You really trying to tell me that they don't ever talk to one another on the next up and coming advance.

The common charge levelled at BT Group is that as a vertically-combined business, it can afford to run its end-user-facing subsidiaries (BT Retail, BT Business, and Plusnet) at minimal profit, or even at no profit at all. In the knowledge that those losses are counterbalanced by the huge profits the BT Group makes out of Openreach, from all Comms Providers.

That (alleged) cross-subsidy of BT's business has for years been the issue-of-contention with Ofcom and other Communication Providers. The relative demise of DSL via Local Loop Unbundling (LLU) has only accelerated and aggravated that lack of competition.

In reply to a post by 69bertie:

As for the consequences of hiving off Openreach, not much different from National Grid. Has the electricity supply fallen over yet since that happened. Nope. You'd get the same result with Openreach being on its own. Shareholders can be a pain, they can be a blessing but given the recent report that too much money (percentage wise) is being paid out to shareholders generally by a lot of companies with investment suffering as a result, maybe a break up wouldn't be such a bad idea.

Yes, we should comparison Openreach with the stand-alone networks of National Grid and Network Rail. We don't expect rivals to build overlay network in those two examples, to create competition; the expense and disruption would be enormous. The telecom network really isn't very different. If anything, of those three networks, Rail, Electricity and Telecoms, Openreach is best-placed for public ownership.

In reply to a post by 69bertie:

And someone mentioned that the old PO setup used to take weeks to do anything. Even Openreach took over 6 months to get my phone line reconnected. Reason? Lack of infrastructure investment at the local level. And of course, millions of £££ have been paid out from Government sources via BDUK to pay for the upgrades in many places around the UK. Even though fibre hasn't quite got here (they put the cabinet in place last week) I do know that if the government (and the EU) hadn't coughed up the money, we'd still be waiting for some sort of modernisation of anything if Openreach/BT had their way. Sometimes to have to lose money to make it.

The current setup has had its day.

The status quo certainly is a broken business model. We have a heavily state-subsidised telecommunications network that is not giving value for money, and no delivering for millions of households. It has long been the case that Openreach has (allegedly) been overcharging the taxpayer for its BDUK contract work, mindful that there's always more cash in the public kitty. Why hurry, when it's almost unaccountable public cash? The taxpayer-subsidised plant (DSLAMs, cabinets, new fibre) after just a few years becomes entirely BT's property. That is ridiculous and should not continue.

edwincluck: are you for real?

In reply to a post by Pgre:

I do wonder what exorbitant price means.. especially when you look at Mobile Data charges ??

The Br0k3nt3l3ph0n3 (broken telephone) blog cites some interesting figures; published in a 2013 "confidential" and then promptly leaked(!) report commissioned by TalkTalk.

See: BT's broadband rip-off -- the evidence: --

The 59 page report found that Openreach�s costs to build its FTTC network are £4.39 per line per month. BT Openreach charges resellers £7.40 or £9.95 depending on the bandwidth provided. Current prices for BT�s Infinity FTTC services start at £13/month and go up to £26/month. BT Retail offers discounted prices of £6.50 and £20 per month respectively for the first three months.

It is those margins that Ofcom is studying for evidence of a 'squeeze', and therefore monopolistic abuse.

You mean the squeeze stuff that has already been ruled on

http://www.thinkbroadband.com/news/6897-ofcom-reword...

Half the country at least can go to a different loop, so seems amazing given how bad Openreach is that people like Virgin Media don't have more customers.

That figure should rise to 70% in a couple of years. Perhaps Government and Industry should just back Virgin Media?

Commissioned by TalkTalk puts up a red flag for me..
(And its supposed to be confidential.. )

Not saying is wrong but I'd suggest an independent commissioned report may be a little less biased.

I also read they talk about reusing ducts but the original cost of putting the ducts in doesn't seem to be mentioned very clearly and lots of assumptions of course in the business case.

If is so cheap is there a reason why VM haven't massively expanded or Talk Talk for that matter ? Again reports like this on their own may have some use but may not show the full picture.

Thanks, Andrew. Better late than never, and yet the devil, as ever, is in the detail. Ofcom writes in its March 2015 news bulletin you quote:

From 1 April [2015] a pricing rule will mean BT must maintain a sufficient margin between its wholesale and retail superfast broadband charges, in order to allow other providers profitably to match its prices.

Costing the provision of an 'average' FTTC service will remain Openreach's responsibility, so there will be considerable scope for "creative accounting" in Newgate Street!

BT could be minded to exaggerate the provisioning cost for a FTTC line, and thus disguise a greater profit within its Openreach division!

BT would surely never do that though. Or would it?!

The issues are

1. Current Openreach performance levels on installs/repairs
2. Clear desire from several providers that they'd like a separate firm for the local loop that they can exert more pressure over, i.e. mould to their needs
3. Legacy debates over whether UK telecoms should be nationalised
4. Equivalence of input has produced exactly what one would expect, nothing too exciting but job is usually done.

I feel like Openreach should be forced to roll out FTTP to everyone if they are to remain part of BT.

Why? Who do you expect to pay for a national roll-out? BT or the Government? Remember BT is a company answerable to its shareholders in exactly the same way as Vodafone, Sky, TalkTalk and Liberty Global (VM) and the shareholders in each of those companies expect to see a profit generated from any investment.

In reply to a post by MCM:

Why? Who do you expect to pay for a national roll-out? BT or the Government? Remember BT is a company answerable to its shareholders in exactly the same way as Vodafone, Sky, TalkTalk and Liberty Global (VM) and the shareholders in each of those companies expect to see a profit generated from any investment.

They would get a return on their investment. Fibre is at an all time low cost-wise.

Until our taxes go to a company that isn't BT, this problem won't be resolved.

It is said Openreach is a private company but to me it seems to me semi-nationalised. Like I say, they have to use our taxes to fund FTTC but they can afford to blow money on sports.

Sky and others also might not like that unless the terms fit their own plans

Like I say, they have to use our taxes to fund FTTC.

That is incorrect. What has happened is that BDUK has gap funded, using tax payer and rate payers money, the installation of FTTC to areas where BT says it would not be commercially viable to upgrade. That is very different from saying that taxpayers have funded FTTC.

but they can afford to blow money on sports

As for BT blowing money on sport, here I agree, but as a commercial company answerable to its shareholders it can invest in whatever it considers to give it the best return and that doesn't include installing FTTC cabinets on cabs with 60 lines where there is little chance of any return on their cash, hence BDUK gap funding the installation. What I object to is that BT broadband users are paying for BT sport whether they want it or not although they always have the option of changing their ISP if they don't like it.

In reply to a post by MrSaffron:

Sky and others also might not like that unless the terms fit their own plans

I'm not sure I understand. What might Sky and the others object to? BT paying for a national roll-out or the Government funding a roll-out? In every case the companies involved are answerable to their shareholders who would expect to see a return on their company's investment or are you suggesting that Sky and the others don't want to see a profitable BT?

In reply to a post by MCM:

What has happened is that BDUK has gap funded, using tax payer and rate payers money, the installation of FTTC to areas where BT says it would not be commercially viable to upgrade. That is very different from saying that taxpayers have funded FTTC.

It seems to me that BT have been able to sit back and let BDUK cover their costs in certain areas. I suspect as BT knew they were going to get the money anyway (it was fairly obvious that was going to happen some time ago), they were able to make more areas "commercially unviable".

Is there any way for us to know which areas are actually commercially unviable as that wouldn't be realised until after the service was installed anyway.

Is there any way for us to know which areas are actually commercially unviable as that wouldn't be realised until after the service was installed anyway.

Not that I know of however the local BDUK programme should know as most if not all have claw back clauses in their contracts whereby BT starts to refund the subsidy when usage meets various pre-determined levels.

As for BT blowing money on sport, here I agree

That is where the split between Openreach and BT financially now and the split physically if that should happen would make no difference. It is BT Retail that paid for sports and therefore doesn't impact at all on the infrastructure investment of BT Openreach (assuming the reports of separate financials is correct).

So, even if BTR didn't buy sports it would make no difference to the investment made by BTO as BTR are not allowed to subsidise BTO.

Fibre is at an all time low cost-wise.

Fibre may be but labour isn't. The cost of installing fibre is going to be dominated by labour costs. The difficulties are around permissions to put trenches across private land or roads, blocked ducts, etc. The actual fibre is a small part of the cost.

The other big difficulty is getting the fibre itself into people's houses. That last few meters can cost a lot of money. Especially if you have to dig up an expensive driveway in order to lay the cable in.

Easy solution: run it overhead.

In reply to a post by ian72:

So, even if BTR didn't buy sports it would make no difference to the investment made by BTO as BTR are not allowed to subsidise BTO.

But the money for both companies comes from BTGroup so it would make a difference as that would be more money left in the overall account.

So that means installing poles. It also potentially means routing cables internally. There is still a cost to this.

No, it doesn't. They are not allowed to cross subsidise - they have to run their own accounts.

In reply to a post by ian72:

So that means installing poles. It also potentially means routing cables internally. There is still a cost to this.

I do wonder how many lines are currently overhead, because in that instance a lot less work would be needed.

In reply to a post by ian72:

The other big difficulty is getting the fibre itself into people's houses. That last few meters can cost a lot of money. Especially if you have to dig up an expensive driveway in order to lay the cable in.

It wouldn't be a bad thing for the cost and/or responsibility of routing those last few meters of FTTH cabling to be placed on the householder; particularly if they're being (often justifiably) persnickety/pernickety.

Depends on how much money is being talked about. The fact that it always seems to be a race to the lowest prices the majority of people will not pay extra for faster speeds.

My brother has just got FTTP to his house (a year later than expected). If I lived there I would have signed up for 330/30 (or whatever it is they currently sell it as). And he went for 40/10 because "he doesn't need anything more". And most of the country are the same - move away from boards like this and most people don't see any benefit in faster speeds and certainly wouldn't pay a big premium to get them.

As far as I am concerned hopefully BT will start doing FTTPoD again soon and start offering it in my area. If it isn't exorbitant and doesn't have a 3 year minimum contract then I would sign up.

On the other hand, the installation of FTTP to a home or office, and to a lesser degree FTTC, is an amenity that adds measurably to the asset value, and thus saleability of a premises.

IIRC, installing fibre to the home was shown to add a few percentage points (~4%) to the property value. Andrew has probably covered this in an earlier TBB news bulletin. That added amenity value is surely true for rented premises as well.

Arguably BT / and or the taxpayer should be recompensed by the home-owner or landlord for investing that way in their property.

WIth some jiggery-pokery in the costings - and the insistence of using "approved contractors only" - it would be a very easy way of recouping most or even all of the installation costs for bringing fibre to a premises.

I too would sign up to FTTPoD if the prices aren't ridiculous.

I would assume that FTTPoD can be scaled so in the future a gigabit would easily be obtainable?

And the reality is that premiums like this only exist when something is in short supply, once a good proportion can get it you do not get the premium.

It would be a very tough sale in areas with native FTTP from Openreach, to charge per metre for the final drop to the property. Things seem different with Gigaclear, because there is no USO perception on them so people are happy to pay a contractor if they have a long front garden or DIY the final fibre drop, also Gigaclear place a final pot at the property boundary, with Openreach it may actually be across the other side of a public road.

Remember people used to Openreach (or in their mind BT pricing) being uniform and would be an uproar if the terraced house with no garden paid £99 for final FTTP connection, but a house that just happens to have a 30 foot drive had to pay £300.

Native GEA-FTTP carries a £99+VAT install now, engineer visit for FTTC is same price. 18 month contracts on FTTP mean providers spread this over the longer term.

Where people have had alternate wireless charging £150 for a visit to fit antenna and cover hardware costs people do think twice before laying out the money, so a variable FTTP install fee will not go down well. Fibre on Demand is a slightly different scenario since people know they are paying for more than just the final drop.

FTTPoD is GPON based and Gigabit possible if you accept high contention over the GPON segment.

Those are nominal Openreach charges. The charges are peanuts and probably don't even cover the truck-roll and bureaucratic paperwork, never mind the labour costs. The plumber charges us £60 before he's even knocked on our door!

If FTTP roll-out is to be truly revenue-raising - the install cost for that final drop would have to be at least one magnitude larger. Perhaps in the low thousands of pounds per premises, with typical means-tested subsidies for low-income households.

We certainly would be willing, if not necessarily "happy" (!) to pay £3,000 for FTTP to be brought to this suburban house; in the knowledge that £3,000 would be added in amenity value to its market price.

Such a programme of rolling-out FTTP could also stimulate community involvement. The public loves to engage in fund-raisers to fulfil that perception of civic duty. Something that foolishly is missing in the political arena today. People want to play their part.

Though these sorts of programmes would be so much easier for a government-entity to do, rather than the private sector.

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BTW it's curious how this debate always opens up a division that pits the urban-ites against the rural-ites. Can we just agree that any commodity or service that is rationed by price or availability should, first and foremost, bring benefit to the largest number of people at the lowest cost. That's before we even contemplate delivering to those expensive and isolated outliers in rural districts. That's the rule of thumb applied in every other field of provision from healthcare, to education, to highways and transport, policing, and so on.

Edited by deleted (Mon 27-Jul-15 13:38:12)

If willing to pay that price then you are a candidate for Fibre on Demand once they start to take new orders again then.

Unfortunately millions upon millions do not have £3k available or willing/able to add it to their mortgage costs.

I'm also wondering if having FTTP available would increase property value by £3K over having FTTC. I guess there are parts of the country it might but in my experience most people buying houses wouldn't pay £3K more to get FTTP over FTTC (and many don't even check broadband before they buy).

I've seen the surveys, and the majority are based on the difference between ADSL/ADSL2+ and FTTP, not many (well none I can recall reading and I read a lot more than goes into the news) went from the position of people already able to get a 30 to 40 Mbps type service.

Now if a property is struggling on dodgy 6 to 8 Mbps FTTC then maybe there might a premium if FTTH available.

I wonder what the premium would be for a flat that has both Openreach FTTP and Hyperoptic Gigabit as an option e.g. http://www.getlivinglondon.com/

In reply to a post by MrSaffron:

I wonder what the premium would be for a flat that has both Openreach FTTP and Hyperoptic Gigabit as an option e.g. http://www.getlivinglondon.com/

I suspect the premium for FTTP/Hyperoptic on those flats would barely register compared to the cost of the flats in the first place.

Although a 1 bed flat for £1600 per month isn't quite as bad as I was expecting but still not cheap. 4 bed townhouse for £3K a month is also not that bad for London I would think. But, an extra £3K to property value on something rented at £3K per month is not a lot.

In reply to a post by ian72:

I'm also wondering if having FTTP available would increase property value by £3K over having FTTC. I guess there are parts of the country it might but in my experience most people buying houses wouldn't pay £3K more to get FTTP over FTTC (and many don't even check broadband before they buy).

Remove FTTC as an option, and would FTTP still be worth £3,000, to escape ADSL? Personally, I'd pay it, by commercial loan if necessary.

It always surprises me what many people consider essential. When we last tried moving home, at least one prospective buyer walked away because we didn't have Sky TV! (Trees and church in the way; God works in mysterious ways!)

At some point, copper pairs are going to be obsoleted altogether, in favour of a fully-fibre optic network. FTTP will deliver both data and voice telephony - and FTTP will have to fall under some sort of Universal Service Obligation. £3,000 could become that baseline install cost; serving as a revenue-earner too, for fibre roll-out in the shires.

Cheers, edwin