The lack of fibre could cost BT dear!

BT may loose Openreach because of under investment in fibre.

Edited by Michael_Chare (Sat 23-Jan-16 06:19:25)

Stupid article.

The house of commons data which is almost half the report is from May 2015 which puts a bit flaw in any conclusions on failure of projects as a lot has happened since then

On selling Openreach, you need to find a buyer and based on that report a buyer willing to fund 100% FTTH roll-out after having paid for the Openreach assets and over what time frame do we force the FTTH roll-out?

Put it this way, the major shareholders in BT Group will want appropriate compensation and then the shareholders of who ever buys Openreach will look for a reasonable ROI.

The most likely result of such a split would cost the customer dear!

1. the lesson of Railtrack/Network rail chaos is clearly lost on those wanting a separate infrastructure owner.

2. The lessons of British Gas/Transco is another one. When they were all one as British Gas if you wanted a gas main put then B.Gas would do so for a small fee in the sure knowledge of many decades of revenue from the new service to offset their capital expenses in putting in the main.
Then they were all separated out with Transco created to run the gas infrastructure alone and all retail groups like B.Gas now concentrating on just supplying the gas in the pipe.
So now if you want a gas main put in you pay the full commercial cost of putting it in, as Trasco will derive no future revenue from the gas in it at all.

You mean the retailers don't pay National Grid for the use and maintenance of the network? Presumably as a non-profit-making organisation it also has charitable status, so won't be paying the staff much.

For instance the CEO only got £5-6 million last year.

The majority of people don't seem to care how their broadband is delivered providing it is of good quality, reliable and consistent, they simply don't understand the technicalities of it.

Its a shame the same amount of focus on splitting up BT/Openreach isn't applied to shutting down tax loopholes to stop major tech companies moving all their profits out of the UK in order to avoid paying UK corporation tax. These tech companies are benefitting massively from this surge in broadband dependance and putting nothing back into the economy. The tax avoided by the big tech companies over the past years would have probably paid BDUK funding many times over.

We can see the way things are going. The pressure on Ofcom/gov to decree a sell off will become unstoppable

What else can we see?

BT will sell, making a shed load

The buyer will probably be French

Performance will fall as Openreach is restructured by new owners

Bills will go up

But it's going to happen

Does this cross-party committee who paid for this report have a website with meeting minutes and such like?

What are the credentials of the consultants and experts who provided their 'opinion' into this report?

Mr Shapps twitter feed is interesting at the moment, see https://twitter.com/grantshapps

In particular his link to https://audioboom.com/boos/4096465-bt-press-office which he says :
"the experts in the BT Openreach Press Office call .. but fail to put down the phone, inadvertently leaving this recording on the answering machine. Their attitude reveals contempt for Openreach customers suffering poor broadband speeds. See what you think."

They purely poke fun at the infantile attempt at humour where the ministers have named the report to be about Broadbad ... the contempt was for the ministers and the report, not for the customers.

Edited by godsell4 (Sat 23-Jan-16 10:43:51)

It doesn't need to be sold of course. It could "just" be separated with the existing shareholders holding stakes in the company in the manner that O2 was split. I say "just" as there are enormously complex legal & financial issues to sort out on allocation of debt, pension deficit liabilities, IPRs and much else.

However, if it was separated out, what the report doesn't pin down is exactly how that will change incentives. OR will be a £5bn a year yet this group of MPs want it to finance what would be a £20-25bn FTTP programme to be done in a short timescale (where would the workforce come from?). Where would investors come from to stump up the cash required unless the market fundamentals were changed? Why would OR pump capex into areas where there's no prospect of a return? The issues would surely just remain the same. OR have to react to VM quickly (which really means g.fast in urban areas as it's relatively quick to implement with least disruption) and rural areas are not suddenly going to find that OR has suddenly got a pot of gold to deal with their issues.

In other words, an OR separation on its own changes nothing.

nb. the report has basic errors. For instance, it says that BT has received £1.7bn from BDUK whilst the accounts show about £700m so far.

Edited by deleted (Sat 23-Jan-16 10:57:33)

really !!!! - there no 10 meg USO, (only a intention --

there are significant number of premises who are with service providers that don't offer fibre and they have never checked -- you'd be surprised how many complain in public forums and then find they can get 50 + mb/ps or greater , some think its happens automatically

use this as this will tell you what's available at your property rather than what your current Service provider want to sell you https://www.btwholesale.com/includes/adsl/main.html

Edited by deleted (Sat 23-Jan-16 10:56:34)

For those looking for a link to the report, took me a little hunting, so to help others find it, link below

http://www.shapps.com/2016/01/big/

Another set of misleading stats, which don't portray reality. FUD stirred up by people with vested interests, and little actual knowledge. And that's just from the PR in the papers.

Where is the actual report? It seems incredibly difficult to get hold of.

Not that it should have any effect on Ofcom - who can see past the aggrandisation - as the ability to take part in the consultation closed last October. It'll be interesting to see precisely what input these 121 MP's had back then, when they would need to be properly accurate.

That means this puff piece is purely for public consumption. An attempt to build public pressure by writing a set of half-truisms, pushed side-by-side for effect. Nothing more.

the 1.7 has also had to be matched (in line with aid intensity rules) so you just don't get 1.7 without additional investment -- so again totally misleading

agreed, and see one of my posts in this thread for link to the report

There are a number of approaches . One approach is to split BT off as a separate wholly owned BT Company. The existing shareholders would then receive shares in BT Openreach. The other option is to sell it off. There would be a limited number of companies that could afford to buy it. VM is probably ruled out on competition grounds. Sky is a possibility . It would be pretty certain that the new BT openreach company would be barred from providing end user services

I wonder if some of the MP's hoping to split up Openreach are some of the same that supported this....

http://www.techradar.com/news/world-of-tech/how-the-...

BT itself has a number of overseas subsidiaries which may be being used for tax avoidence purposes

The Railways are still state owned and Railtrack is a wholly owned government company

May be? Says who?

Of course it has overseas subsidiaries it's a big worldwide company

As Openreach is a separate BT business unit separating it into a separate company is relatively straight forward. Pensions are not covered by TUPE so the Pension does not transfer

In reply to a post by Bob_s2:

One approach is to split BT off as a separate wholly owned BT Company. The existing shareholders would then receive shares in BT Openreach.

Those two sentences are self-contradictory.

Say you or I were BT Group shareholders now. We would somehow receive shares in Openreach. We could sell those shares on the Stock Exchange and anybody could buy them.

Quite apart from what would happen to our existing BT Group shares when we received the OR ones. Magically drop in value by some theoretical amount that OR was considered to be worth?

Plus, if it were a wholly-owned separate company, like Plusnet, what independence would it have? BT appoint the Plusnet CEO and Board members.

That's an idiotic comment about TUPE. For a start, TUPE covers transfer of staff to a different company, and a separated Openreach would be a divested division. The terms and conditions of the staff would be unchanged as would their pension terms unless renegotiated.

However, that's not the real bit of idiocy in the comment and that's because it's wholly irrelevant to the pension issue at hand which is the responsibility for the historic deficit. That is the difference between the assets of the pension fund and the liabilities for existing acrued benefits (most of which are for actual pensioners, not current employees as there are 300,000 in the pension scheme and only about 65,000 UK employees). BT group are liable for that (which currently has a £7bn deficit and may well increase as it did on the last review). This is not a little thing that BT group can just walk away from. It's a contractual obligation and any divested OR will have to carry part of that deficit. If its based on historical employment patterns (the great majority of BT pensioners would have worked in the local network side) it could easily be most of that deficit.

nb. in some other privatised industries, historic pension liabilities are included in the costs of the infrastructure provider for the purpose of regulated pricing. Ofwat & Ofgem allow this, but Ofcom does not (for esoteric reasons). If OR were to be separated off, then some of those grounds change and wholesale costs may go up.

And Railtrack also have £38bn of debt on their books (still increasing) and have a disastrous history of going enormously over budget and delivering very late. The railway infrastructure in this country is by any measure the most expensive in Europe and is one of the main reasons that out rail fares are so outrageously expensive. (The operating companies also have a lot to answer for as well as the disastrously expensive way rolling stock is paid for in this country - all be leases as he operating franchises are a massive disincentive to capital expenditure in this area).

The responsibility for Rail Investment I the UK is with the government who still own the railways. The Rail operating companies just have a contract to operate the services as specified in the contract

NetworkRail/Railtrack are bother government owned companies

Do you have the slightest evidence that BT is somehow off-shoring profits to tax havens? I've never heard a single allegation of this in the media.

If it becomes a wholly owned BT~ company BT Group would own a 100% of the share capital of Openreach. There would be no publically issued Openreach shares. The share spit only occurs if it is sold off each BT shareholder would then have a new BT share & an Openreach share

In reply to a post by Bob_s2:

BT itself has a number of overseas subsidiaries which may be being used for tax avoidence purposes

PROVE IT.

Making totally unfounded allegations. Maybe you shoul actually look at BTs accounts and the amount of tax that is paid each and every year.

So is there a good, not perfect, analogy of how BDUK as part of the government has decreed how the £1.7b has been spent and BTO are fulfilling that contract as specified by UK.gov? Together with some EU rules providing some governance too?

In reply to a post by Bob_s2:

If it becomes a wholly owned BT~ company BT Group would own a 100% of the share capital of Openreach. There would be no publically issued Openreach shares. The share spit only occurs if it is sold off each BT shareholder would then have a new BT share & an Openreach share

Exactly. That wasn't what you said before.

Plus I've already dealt in the same post with your suggestion that it could be a separate wholly-owned company within BT Group. The effect of that would be zero except the management costs would rise.

Edited by RobertoS (Sat 23-Jan-16 12:47:11)

the business operates in 170 + countries around the worldwide -- you would expect to need an in country presence to operate in some of those countries

No problem with that, it is the suggestion that those entities are used for tax avoidance that is wrong.

MHC agreed more disinformation as ever

You tell me why OFCOM should have the right to force me to give up my investments in BT. The government decided to privatise BT which include the divisions which now form OR, I invested in that. I, and other shareholders should be the ones to decide how OUR company, not the government's is run.

BT or Openreach are not names that crop up for corporation tax avoidance schemes, the main names that continually seem to come up are companies like Amazon, Google and Apple. Huge tech companies which have paid very little if any UK corporation tax for many years.

Also we do https://labs.thinkbroadband.com/local which has an increasing number of the alternate providers on it too, so helping those where BT/Virgin infrastructure is not giving decent speeds

And probably moans and groans about charges for no fault type visits would get worse, and various other little bits and pieces become chargeable e.g. want a data extension kit, that's another £75 on top of the install charge

and especially Facebook

@MrSaffron Very useful .xls file given at the bottom of one of the reports linked to by the BIG document, see http://researchbriefings.parliament.uk/ResearchBrief...

but I would still like to see this list the number of properties not the percentage of properties

The BBC website refers to a business called stickleback fish company at AL9 7HB when you use the BTW wholsesale checker and find an address aty that postcode its an industrial estate you see it is connected to Hatfield 41 --

If you further check that postcode against Connected Counties (BDUK name for Bucks and Herts) you will see it is part of SEP for Connected counties - see link below (so covered under BDUK -- never commercial programme , would have been eligible under 1st Connected Counties programme but probably small cab so not good value for money to enable the county to hit is coverage percentages - so never made it under contract 1

http://www.connectedcounties.org/media/1190416/List-...

So business in his constituency is covered under BDUK

Edited by deleted (Sat 23-Jan-16 15:36:51)

How true ... and calls to their helpdesks will be chargeable, more and more faults will be deemed as customer responsibility ...

kebabselector

either funded commercially, or By BDUK or could be via community fibre partnership with Openreach -- nearly 20,000 premises now done that / doing that -- see BT note 22nd September 2015

Here, here. Well said.

In reply to a post by MHC:

How true ... and calls to their helpdesks will be chargeable

Not a problem as you're not allowed to talk to Openreach.

you're not allowed to talk to Openreach

You are...and shout...they can't talk back

And why would I be wanting to use June 2015 data sets when I spend a lot of time maintaining our own and it includes cabinets that have gone live in the last week or two.

When it matters I sometimes mention number of properties, but once you start adding business premises things become more complex as often 1 address can house multiple businesses so figures drift slightly from what people know about, and we are constantly adding corrections as postcodes shift from sorting office out to the actual location and buildings go up.

Obviously if a local authority does hit 100% then we will be going through with a fine tooth comb, and increasing the number of decimal places to reflect if its not really 100%.

I distrust this report. The group was set up by Grant Shapps and lacks independence.
Calling it cross party is part of the smokescreen to sell off OR to hedge funds.
It is not an official report.
Let's wait for the Ofcom Enquiry

Maybe that's something that might change if they are on their own feet, i.e. you pay a basic charge to them that covers maintenance line, and a different charge to your ISP for Internet access. Of course two lots of billings will make it more expensive, but it will be more transparent.

It is provided at constituency level, I could be a numpty, but I have failed to get this kind of breakdown of data via labs.thinkbroadband.com, being able to show to the local MP why although the picture in their county getting close to the BDUK targets sounds great, the fact that the people in their locality are nearer 60% is useful ammunition to wake up the MP to an issue in their constituency

I fully appreciate the time you put into providing the site and its contents.

Notice I've not sat down and written it up on our news, and if I did it would be questions about why using such old data etc.

No denying the BDUK roll-out has not helped everyone to get superfast, but then the target was always 90%, so 10% were going to miss, just a case of arguing over who is the more important so don't get missed out. Ultra rural businesses or peri-urban businesses?

On Openreach one reason things are not great is the shedding of lots of employees when formed in 2006, i.e. long term staff took redundancy or got the shov, to help reduce costs the penalty is that any problems with weather delay roll-outs and new installs, but we benefit from cheaper line rental, yes line rental is cheaper at the wholesale level in 2015 than 2006, just the retail side is more expensive.

I think it's unlikely in the extreme that OR will ever charge direct. It doesn't happen with gas or water. In addition, what would it encompass? Just the line charge? What about the GEA products? Then there's all the complexity of setting up a parallel system for dealing with retail customers. I don't see it happening.

I tweeted Mr Shapps to point me to where the meeting minutes are that this cross party group held, no reply yet.

So the main assertion is that if BTO is made separate from BT Group there will be more competition.

Competition for what exactly? Will BTO or whatever the new owners call it, still own the exchanges and be responsible for maintaining the wires, poles, etc and their repair?

So there is 6km of wire between my home and the exchange, with about 2km to the FTTC cabinet, which company will compete to upgrade that all to a fibre connection, the exchange is also small, less than 300 lines on it. Two BDUK funded cabinets were added but only 190 of them are able to order FTTC. This is a Market1 exchange.

The report totally ignores the economics of running a business as far as I can see.

At the end of the day it's just a lot of people shouting. we all know the end result nothing will happen and bt will probably say we will do more.

Hi godsell4,

The http://labs.thinkbroadband.com/local/ site displays the same (and a lot more) info as the spreadsheet you linked to.

Here's an example for Blaenau Gwent constituency http://labs.thinkbroadband.com/local/index.php?area=...

You can see the stats (in %) for Superfast coverage (+24Mbps, +30Mbps, +100Mbps) along with % below 2Mbps and 10Mbps and more specific to that constituency.

It also shows the history of the coverage and speedtests within that constituency too.

Godselll so where in the uk are you ? and how many of you there ?

Thanks, I am a numpty ...

think I have figured out the UI for the 6 options offered for viewing England. To me it looked like I had to select the County first and below that select the constituency from there ... apparently not. Also compounded by the fact the in the County option, Wiltshire is not listed

The ceremonial county of Wiltshire may not align with the Unitary authority of Wiltshire, the joys of how UK premises is divided up and all the changes to counties over the years.

Another option is just to search by postcode and we find the matching local authority and constituency for you.

Perhaps "Select a specific area in England:" should change to "Select any area from one of the six lists below to view its coverage and speed results"

And by and large BT does seem to be doing more, as are Virgin Media as are Gigaclear as are IFNL as are Hyperoptic...

Bob

Why do you NEVER look at the evidence.

1/2 year profit before tax for ALL BT group ( Includes overseas). £1400m

Tax paid £261m (18.6%), (extra Pension payments have a tax credit reducing the rate paid below the corporation tax rate.)

Where is the tax avoidance taking place?

Had the time to read this in full and write a response.

http://telcotorment.blogspot.co.uk/2016/01/broadbad-...

I think if they do split Openreach from BT then they need to be demonstrating what could have been done which isn't being done now. Facts on the table. Also to say company('s) X could do this better on the same kind of budget.

I don't trust Shapps at all, especially because of his business history. I am tending to think that he's chose to stir the pot on this because he has connections in the industry.

I really don't see owning the monolith network that is Openreach as a differentiator for BT in the long term.

Their acquisition of EE and the infrastructure associated will prove much more valuable with continued wireless engineering, less regulation and less complexity in providing a broader service.

Surely BT Retail only to be "competitive" when it comes to fixed line products? Ofcom have made the role of being the network owner rather ominous in the last decade.

Sent you a PM as I do not post those kind off personal details on any kind of public forum.

responded to it

As long as openreach continues to be run as a Bureaucratic nightmare, where their field engineers hate the bureaucracy and the next silly thing forced down on them to make their work an even bigger pain in the ass.

Like having to spend 2 hours on a simple fix, when they could move on to somthing else, having no leeway with nightmare jobs that can be fixed without extra help. Luck of the draw getting so many bad hard jobs that even the very best and most experienced can get fired for being unlucky. The stupid job logging system on a tiny iphone touch screen that crashes alot, when they carry a much more useable laptop with them anyway. When they have meeting, and asked for suggestions they are told to keep quiet, so all this [censored] continues on and on and on.......

They are struggling to keep anyone worth keeping.

I suspect the whole of Openreach is like this, or going this way, a bureaucratic mess they barely functions without making employees miserable and feel totally under valued with a complete lack of common sense.

Don't get me started on those iPhones and vpn so much time waisted everyday with those

Not everyone feels the way you do....

Well said.

I suspect from that statement that you don't or no longer do work in the field . It is hideous ATM.

Incorrect Zarjaz. I've never find it hideous at all, still don't. Maybe it varies across the country? I know plenty of others that don't find it hideous also. Honestly, I still enjoy it.

My previous job was WAY more stressful.

It must vary. The last Openreach engineer that came to try and fix an issue with my line was based in Tunbridge Wells. His first job was in Sevenoaks, mine was his 2nd job in Hastings and his next job after mine was in Haywards Heath.

What made me laugh was he ended up spending 4 hours on my job, so after an hour or so, he called one of his colleges to see if he could do the Haywards Heath job for him and his college was already doing another job in the Haywards Heath area.

That must be a very broken job allocation system.

Does that mean you are multi-skilled engineer who is in the queues daily ?

I'm not trying score points off of anyone, just saying that that's where the pinch really is being felt at the mo.

Perhaps the days of every exchange have 4 or 5 people hanging around to do any jobs should return, i.e. plenty of slack to cope with the ebb and flow of demand, only downside is the cost of retaining the extra staff rather than keeping staff 100% busy and using agency staff to take up the slack.

As always Zarjaz is spot on , even JA has now gone and he was adsl / bb god.

JA?

Perhaps the days of every exchange have 4 or 5 people hanging around to do any jobs should return, i.e. plenty of slack to cope with the ebb and flow of demand, only downside is the cost of retaining the extra staff rather than keeping staff 100% busy and using agency staff to take up the slack.

Nice idea Mr.S, sadly it's never been that way in my 19 yeas on the firm.

In reply to a post by TheEulerID:

I think it's unlikely in the extreme that OR will ever charge direct. It doesn't happen with gas or water. In addition, what would it encompass? Just the line charge? What about the GEA products? Then there's all the complexity of setting up a parallel system for dealing with retail customers. I don't see it happening.

It's what happens or at least happened in Japan. Pay a Flets charge for the FTTP to NTT East or NTT West then pay the service provider on top.

Edited by deleted (Sun 24-Jan-16 22:23:39)

My neighbour was a BT engineer and he used to say exactly the same thing about being sent to jobs miles apart.

He retired 15 years ago, before Openreach was formed!

Ah, but it used to be. In 1984 Post Office Telecommunications had 260,000 employees, or rather more than 1 in 100 of the UK workforce. If it was done on the same basis now, it would be even higher. This was also in the days when the only significant service was phone calls.

Of course such number would be ridiculous (and those 260,000 wouldn't have been very productive, so it was overmanned then). But the drive to efficiency is what Ofcom (and market competition) do. The truth appears to be that people want to pay the lowest cost yet still get the highest service. It's always going to end in conflict.

A OR guy who was god when it come to sorting BB faults no one else could fix .

"The truth appears to be that people want to pay the lowest cost yet still get the highest service. It's always going to end in conflict"

So very true ,you dont pay for a Lada and get a RR !

I personally don't think breaking OR from BT is the answer, it seems to be that the systems (ordering, troubleshooting etc) and the current procedures OR incorporate are outdated.

Take for example my personal experience I have the BT CEO team working with the OR CEO team and neither of them have seemed capable of simply changing an order from a new line installation (which is in correct) to a migration. They are going back and forth between each other and two or three teams within OR itself.

I don't know how their systems work and therefore I am not speaking from experience but reading here and from my own experience it seems to be the systems that OR use have just spiralled out of control and have reached a crisis complexity point, thats actually making jobs harder rather than easier (for e.g. it should be assigning jobs to engineers that are in or near the areas they are working, orders can be changed easier OR updated and flagged for further investigation etc).

In reply to a post by Ignitionnet:

Had the time to read this in full and write a response.

http://telcotorment.blogspot.co.uk/2016/01/broadbad-...

I agree with almost everything you wrote there, but the fact is that this report is so poor that it is easy to dismantle plank by plank. I'm glad my MP didn't put his name to it, as I'd have felt the need to write to complain about his lack of judgement.

Your point about the difference between the 'natural monopoly' and the vertical integration is well made.

If Ofcom wants to increase competition in a way that benefits Sky or TT, they should do to VM whatever they do to Openreach.

I'm hard pressed to see how increased competition helps anyone in the last 5%. Is there something about this that motivates an altnet suddenly? Or persuade a newly profit-motivated Openreach to spend silly money chasing the most unprofitable?

Nice to see the mention on the Beeb too

I'm not sure that a 'newly profit motivated Openreach' is what we would get.

I would imagine what we would get is zero investment for 5 years whilst BT and the CMA slug it out in legal argument

Then I would expect Openreach to join my local Electric, Gas and Water infrastructure firms in being bought by pension funds and Chinese money and a managed decline.

Yes, I'd expect the same too.

I'd say my "profit-motivated" Openreach is the same as your "managed decline"

Perhaps that would serve the last 5% by being so bad and useless that people go DIY route or Gigaclear become de-facto village provider, leaving a small 1% of very lonely premises to deal with.

Part of the reason Openreach and the state of installs/faults is that it is watching its back and having to monitor all its costs to ensure regulation is met and that costs can be attributed - and as a standalone PLC that is likely to still be regulated in the same way that is not going to change.

If people really want the uneconomic (in commercial terms) tail serviced then it needs the fundamentals of the regulatory regime to be reworked. Perhaps separating into two markets (one with infrastructure competition and the other a monopoly). In the monopoly area slap on a USO, but set wholesale prices in that area so it can be financed. In the competitive areas then let market prices decide (but there are still islands without access in the competitive areas). However, I can't see increased prices in the "rural" areas being popular.

Alternatively, make the subsidy explicit via a broadband levy (which could be drawn on by any operator in expensive areas. I can't see that going down well in urban areas who will see prices rise (and VM will hate it).


The real problem is that the way Ofcom are regulating the market it's extremely difficult to make a business case for a wholesale fibre swap-out. There just isn't any obvious source of increased revenue to pay for such a huge investment and cost savings on maintenance are a long, long way away as the copper and fibre network would inevitably run in parallel for many years. Perhaps a couple of decades given the required timeframe plus all the LLU stuff that has to be written off.

Any completely free market only approach is bound to lead to unserviced areas and/or very high prices in the uneconomic spots.

As many have noticed, OR/BT separation really doesn't change any of the market fundamentals. Mixing up vertical integration with local monopoly issues is economic illiteracy.

Yep agreed, if OFCOM get their way, those in the final 5% will be left waiting 2 yrs for OFCOM to make up its rules, 2 years to find and agree a buyer and another 2 years for the takover to happen another 2 years for the new owners to define a plan and another 2 years to start executing that plan over a 5 year period.

So at total of 8 years to actually start doing anything to help the final 5%, all apparently at a cost of £11b per year of losses.

So it is not only just how bad the service would be that would be the motivation to go DIY it would be the tragically long delay in getting anything to the final 5%

to be honest that's how it should be, not necessarily hanging around the exchange but they need staff on call, and enough staff on shift so they dont have to rush jobs and customers are not waiting several weeks.

Its pretty clear they are under manned, the time limits for each job, the policy of ignoring faults, the long waiting times, the cancellations (probably to get engineers to escalated appointments), the list goes on.

As I understand it there is no plan to split openreach to many regional companies, it will stay a one nationwide company, so comparing it to past events when companies have been split into little pieces isnt right. Openreach has been dragged down by the BT group.

Who pays for it? the shareholders of course. Cut the dividends and share buy backs, problem solved.

Of course I notice there is a fear campaign going on, those affiliated with BT (I count people who are fed information by BT in exchange for lack of criticism as affiliates also) are spreading propaganda about how openreach will cease to operate for a couple of years whilst it has to find its feet again which is nonsense.

Edited by Chrysalis (Tue 26-Jan-16 15:51:51)

So we want

1. More investment in new full fibre infrastructure
2. More staff to reduce fault repair/install times
3. More roll-out in the less economic areas
4. Encourage outside investors with the prospect of lower dividends

While its possible, especially if the right investor is willing to accept a 25 year payback appears, it is much more likely to lead to price rises. This will make things easier for the smaller agile operators who don't have the worries over USO and regulatory compliance to under cut, and Virgin Media should have an easier time until the roll-out of say full FTTH challenges them in another decade.

I can see the potential benefits but also some potential downsides that some clamouring for the split do not seem to see.

Even if BT takes a split gracefully, I find it hard to see how things like rural roll-out as per contracts will be scaled up quickly, i.e. going to be 2017 before much that is visible to the public changes, and the 95% projects should be well underway by then. Also I think the BDUK contracts are with BT Group rather than Openreach directly, so might be some legal oddities to iron out there.

If I was one of the long term Openreach engineers who had kept old terms of employment and was heading towards early retirement window, a good number would probably take the option to avoid the turmoil.

"If I was one of the long term Openreach engineers who had kept old terms of employment and was heading towards early retirement window, a good number would probably take the option to avoid the turmoil"

I would say 80% + of those with 30+ years in would go.

Andrew ask yourself this about sky

Do sky engineers miss appointments enough that we read about it on public forums?
Do sky threaten a charge if no one home or the fault is inside property?
Do sky have short time limits for faults (to be fair I dont know the answer to this one, there probably is some kind of target tho).

Virgin media is another company to compare against as well.

The Sky example is interesting, as they often use third party installers for their work.

Sky will charge you for a replace Sky box if yours breaks outside of warranty and don't have their insurance on it. So its pay for new box or cancel when it breaks.

On not being at home on the day a dish installer is booked, no idea, but can imagine a clause somewhere.

Sky Faults other than broken boxes tend to affect millions so get fixed quicker.

Virgin Media has its share of horror stories not unlike Openreach, but as not in the political spotlight talked about less.

Openreach is far from perfect, but some of the remedies are almost like someone buying a new car because the windscreen wipers smear and are squeaky. What is very illuminating is that a lot of the hate arose from when third party engineers were used, and those contract staff are the ones who would be taking up slack if a faster paced roll-out or more fibre heavy one was deemed the route to go.

In reply to a post by Ignitionnet:

It's what happens or at least happened in Japan. Pay a Flets charge for the FTTP to NTT East or NTT West then pay the service provider on top.

It effectively happened in the USA for voice calls anyway- you could pay your line rental to your local firm and then chose who you routed your calls over.

In Japan, the telcos like Softbank who compete against NTT are desperate to be able to produce a "single combined bill" for their customers and would kill for the infrastructure there to be regulated as Openreach is now (in theory aspects of it are similar re: functional separation but its much weaker than the UK).

They would also think splitting Openreach from BT totally was crazy

In reply to a post by Chrysalis:

Andrew ask yourself this about sky

Do sky engineers miss appointments enough that we read about it on public forums?
Do sky threaten a charge if no one home or the fault is inside property?
Do sky have short time limits for faults (to be fair I dont know the answer to this one, there probably is some kind of target tho).

Virgin media is another company to compare against as well.

I have no idea how you can consider Sky and BT even remotely comparable. Sky own their core network and satellite uplink stations and, outside of a very few trial areas, that's it.

The only faults that require a truck roll from Sky are single user and there's little fault finding.

Largely for this reason every truck roll from Sky is chargeable.

Virgin Media certainly miss fault appointments and charge for missed ones. They do not charge for faults in the property as, in theory, everything including CPE belong to them. No concept of a demarcation point between supplier and customer on VM so no 'in home' faults to charge on.

If someone has messed around with their install VM certainly will charge to put it right.

They the only real uk comparisons one can make as just about every other isp doesnt employ engineers to visit people's homes.

I have comparisons from other countries but noone here seems to take much notice of how openreach compare to others internationally.

VM have their issues with congestion, but I dont think I have ever been threatened with a fee for when they send an engineer out to investigate a problem. Openreach policy has moved on from having to find fault with the CPE, they now can charge simply for not finding a fault.

Curious tho, are you backing a openreach to stay within BT situation? as I know you have been critical in the past of openreach but now appear to be backing up BT on this one.

In reply to a post by Chrysalis:

They the only real uk comparisons one can make as just about every other isp doesnt employ engineers to visit people's homes.

That Sky provide broadband services is entirely irrelevant to the truck calls they do for their TV services.

In reply to a post by Chrysalis:

I have comparisons from other countries but noone here seems to take much notice of how openreach compare to others internationally.

I'm sure we all can find stories of other telcos being better... and worse.

In reply to a post by Chrysalis:

VM have their issues with congestion, but I dont think I have ever been threatened with a fee for when they send an engineer out to investigate a problem. Openreach policy has moved on from having to find fault with the CPE, they now can charge simply for not finding a fault.

I believe I already explained why VM don't suggest a fee to investigate a problem. They in theory own everything up to the network cable leaving the Hub, the HDMI cable leaving the set top, and the RJ-11 socket going out to the phone. BT don't.

In reply to a post by Chrysalis:

Curious tho, are you backing a openreach to stay within BT situation? as I know you have been critical in the past of openreach but now appear to be backing up BT on this one.

Strongly, as I've posted publicly. For their manifest faults I do not foresee a viable alternative. Separation will definitely cause short term and short-medium term harm to the UK as both BT Group and Virgin Media would react negatively and the protracted legal wrangles would cause a long period of uncertainty.

Further on from that there's no reason to think that anything will improve and competition be increased without utterly destroying the value of Openreach through regulation which would trigger yet more legal wrangling during which time nothing would be done.

Feel free to read my signature for more information.

It's easy to criticise, very easy, but when you take a step back and soak up the big picture over the longer term it's not as clear cut.

Far better options would be some more deregulation, and lobbying government to lower the barriers of entry to infrastructure competitors. Other than taxpayer cash infrastructure competition is what's brought success elsewhere, not hundreds of ISPs having a competition over who can resell BT services the most cheaply.

Edited by deleted (Thu 28-Jan-16 10:21:03)

In reply to a post by gt94sss2:

In reply to a post by Ignitionnet:

It's what happens or at least happened in Japan. Pay a Flets charge for the FTTP to NTT East or NTT West then pay the service provider on top.

It effectively happened in the USA for voice calls anyway- you could pay your line rental to your local firm and then chose who you routed your calls over.

In Japan, the telcos like Softbank who compete against NTT are desperate to be able to produce a "single combined bill" for their customers and would kill for the infrastructure there to be regulated as Openreach is now (in theory aspects of it are similar re: functional separation but its much weaker than the UK).

They would also think splitting Openreach from BT totally was crazy

Japan did it the other way around - they split NTT's retail and mobile operations off from the infrastructure / wholesale operation, NTT East and NTT West, and made NTT open up dark fibre between exchanges.

They however had infrastructure competition already, not a whole bunch of ISPs competing over who could resell NTT products the most cheaply, and of course when all that happened and NTT started their FTTP rollouts properly there was no alternative, it was basically FTTP or nothing outside of large MDUs where VDSL could be used.

Ofcom [censored] our market up with their obsession over superficial competition, so perhaps that boat has sailed for us.

The major LLU operators in the UK have objected to any idea that Openreach has a direct relationship with retail customers. It's absolute anathema to them. OR made a proposal that they would provide a direct contact system for dealing with line faults for retail customers and it has had to be dropped (recently) due to opposition from the SPs. That's just faults - imagine what their reaction is to a billing arrangement for the line costs.

The fact is that the SPs want to control the entire relationship with the customer and, in that wish, they are fully supported by Ofcom.

http://www.ispreview.co.uk/index.php/2015/12/bt-open...

In reply to a post by TheEulerID:

The major LLU operators in the UK have objected to any idea that Openreach has a direct relationship with retail customers. It's absolute anathema to them. OR made a proposal that they would provide a direct contact system for dealing with line faults for retail customers and it has had to be dropped (recently) due to opposition from the SPs. That's just faults - imagine what their reaction is to a billing arrangement for the line costs.

The fact is that the SPs want to control the entire relationship with the customer and, in that wish, they are fully supported by Ofcom.

http://www.ispreview.co.uk/index.php/2015/12/bt-open...

Indeed. Ofcom claim dedication to customers but 'competition' is far more of a thing for them when it comes to it.

This is one of my biggest annoyances with the current system that openreach has no accountability to end users.

I too agree that part needs deregulating, which ironically is why I have been backing the split as I have been speculating that if openreach is split off, it's more likely to be deregulated.

If there is no split I can only see more regulation as ofcom have already stated the status quo is not going to last which suggests to me its either a split or more regulation.

The issue as well with the current arrangement is all the resellers of BT services have a too cosy relationship with BT, as after all they get to sell a service that they have not needed to contribute to the infrastructure costs, the news that resellers are against openreach having direct dealings with customers when considering that is not surprising.

The problem ofcom has and has always had is they see themselves as working for the resellers, and their decisions are influenced by this, joe public gets brushed aside when contacting ofcom but they have lots of meetings with the resellers and it shapes ofcom's decision making. If ofcom want openreach to have direct dealings with customers they should just make the decision and tell the resellers to deal with it, but I think they fearful of a repeat of the sky legal battle which they lost.

Given the strength of opinion that has occupied many press pages I'd expect legal action no matter what Ofcom does.

In reply to a post by Chrysalis:

Andrew ask yourself this about sky

Do sky engineers miss appointments enough that we read about it on public forums?
Do sky threaten a charge if no one home or the fault is inside property?
Do sky have short time limits for faults (to be fair I dont know the answer to this one, there probably is some kind of target tho).

Virgin media is another company to compare against as well.

You cannot compare Sky!

I'm sorry but they are basically dealing with a dish, short cable from the dish, and a set top box. It's a doddle compared to the 70(?) year old Openreach network! A lot of the problem is that it can't apply standard job times very well to the job. It's all based on the assumption that it will take an hour and a half to fix a fault with a line, and sometimes it'll take longer than that, a lot longer than that. That's where appointments start being missed.

I've never understood why people compare Sky techs with OR ones, makes no sense!

I am comparing service levels offered and performance.

Remember openreach have made the choice to use a decades old network, they shouldnt be given leeway because of their choice.

As a split-off Openreach would still be exactly the same monopoly in the exact same areas then why would regulation be eased? It's never going to be allowed to provide retail services (or even business services) beyond basic circuits as that's the whole point of it. Prices will be regulated (as now) with constant downward pressure from Ofcom.

The only place where regulation will disappear will be on BT Consumer where, presumably, there will be no justification for the current special regulations that apply (like margin squeeze tests). Although, even here it's a bit complex. What about BTW services which are required by a lot of smaller SPs? What about things like carrier pre-select, directory enquiries and a number of other services which BT Consumer have to provide yet not other operators. Then there is BT Consumer's responsibility for social tariffs, uneconomic phone boxes and so on.

Any structural split is going to raise a huge number of complications in regulation, and it won't change the OR monopoly position i certain areas one little bit. It will also expose VM as an increasing anomaly, especially if they benefit from this and can increase their market share.

Yep, and maybe they might just refer it to the CMA to kick it into the long grass for a couple of years. Ofcom are in a "no-win" position here. Sharon White is probably dreading the next few months.

Because openreach as a company would be much smaller, it wouldnt be the company with a retail arm that has 10s of millions of customers.

I am not saying regulation would be decreased, but I think its more likely if it was split off.

Sky and co with their proposal to be part shareholders of a jointly owned openreach may also be more willing to have end users interact directly with openreach when they have some control on how the company operates. Again speculation.

Sky and talktalk have been jointly trialling FTTP, if they have absolutely no interest in anything other than adsl, why does that trial exist? My speculation is the trial exists so they can assess the sort of costs openreach would have in rolling it out and compare it to lesser technologies such as g.fast which openreach wants to roll out whilst under BT ownership.

Agreed.

As for Sky Engineers missing appointments, I guess they do due to we had to get Sky to relocate our Dish from the front of our house to the back.
This was due to us being put in a conservation area by our council and no longer being allowed to see any dishes from the front of the houses.

So basically it was down as a removal and a new install of 4 HD Boxes and the guy was here on his own for several hours.

As soon as he arrived he took a quick look to see what's needed to be done and called the office to say it would take a while to do and to clear off a few appointments.

But yeah in the past we have had a few missed appointments from sky engineers.

We even had a sky engineer that wanted to run all the twin feeder coax through the house when we first got Multi-Room (4 HD Boxes) I said no and that I had already drilled the holes for the cables and told him to run the cables outside on the wall, this is when he started to moan at me, so I told him to install the dish connect the cables and then to [censored] off and I will tack up the cables, and I certainly told sky about them, which resulted in a free few months of Sky TV.

Don't get me started about VM, for a whole year we was promised (yes promised) and reassured that they would be rolling out they fibre in our area every month for over a year and also was told that an surveyor was being sent out and that that said surveyor will pop round to explain what is going to be done, like where the cabling and drilled holes would need to be.
They never arrived on any of the +12 appointments, then mid last year I made a complaint and was escalated several times on the phone to where I was told in a rather rude manor that there is no fibre in our area, and that it never was and never will be, and not even an apology for being messed around, nothing.

Don't get me wrong, I am not sticking up for BTOR at all, we have been fobbed off by BTOR for over a couple of years now about our FTTP install that was down to be done back in 2011-2012 where they did half our road and half our side roads, we have all the hardware in place, every engineer I stalk/speak to all say its all done and should be live and that the issue is at the head office.
And that it looks like it hasn't been signed off yet, my local MP and myself have been told recently that there is issues in the records for us (also maybe our area) so maybe that's the reason for the delay.

But at least BTOR apologise when something doesn't go as planned, now whether they mean it is another thing LOL.

TBH, I think all three companies have their faults along with other providers, sadly I have witnessed issues with three them.

Paul

In reply to a post by Chrysalis:

I am comparing service levels offered and performance.

Remember openreach have made the choice to use a decades old network, they shouldnt be given leeway because of their choice.

Show me where Openreach have been able to retire copper in favour of fibre and I'll see your point to an extent.

In reply to a post by TheEulerID:

Yep, and maybe they might just refer it to the CMA to kick it into the long grass for a couple of years. Ofcom are in a "no-win" position here. Sharon White is probably dreading the next few months.

They'll just provide platitudes about competition and standing up for the consumer and all will be fine. Those are an excellent substitute for investment in infrastructure.

It is as you full well know this is not a choice made by BTO,

In reply to a post by TheEulerID:

Any structural split is going to raise a huge number of complications in regulation, and it won't change the OR monopoly position i certain areas one little bit ...

And you can bet it will take a few years of backwards and forwards between the SP's large and small with OFCOM, about how those complications will be resolved in the field.

It's not Ofcom's job to invest in infrastructure or, indeed tell the government that they must (although, of course, they might point out areas of "market failure". It's Ofcom's job to regulate the market so as to get the best outcome essentially through competition regulation. As such, they went down one route (that is promoting competition as deep into the network as possible, including at the infrastructure level), but a side-effect of that approach is to undermine business cases for infrastructure development. Revenue is fragmented, prices are minimised and the regular market reviews have a similar effect on investors. The network is also heavily constrained by the way it is used by multiple SPs at the physical level.

I doubt this will change (it's in line with EU policy, albeit there are signs of a lot of change).

If the country wants some sort of revolution in provision, then it's going to take very specific action to attract the huge amount of investment that will be required (whether or not there is a structurally separated Openreach). That also applies to any USO which has to be financially sustainable.

Actually, the decision was made by Thatcher decades ago - She deemed fibre uncompetitive !
http://www.techradar.com/news/world-of-tech/how-the-...

In reply to a post by professor973:

Actually, the decision was made by Thatcher decades ago - She deemed fibre uncompetitive !
http://www.techradar.com/news/world-of-tech/how-the-...

And this is why i don't think Openreach should be broken up as we end up like USA (or 1991)

openreach has plans for G.fast and FTTP but not right now in mass FTTC first as its money sound as one cab can give a lot of people fast data with out having to mess with last mile of phone cables witch is the highest cost and time the last 10% will ahve to wait for FTTP or g.fast (seems if your going to do g.fast still seems you can just go FTTP, but that means fiber has to be fitted to the house it self where as g.fast does not need a person to enter the house to loop you phone cable into the g.fast)

G.fast and FTTP have an higher cost, more so if your not been serviced by a telephone pole the costs can be a lot higher (underground work is costly)