It is if they think they can make that much revenue based on the purchase. And anyway, wasn't football bought by retail rather than Openreach - maybe retails allergy is a little less inconveniencing.

Reading through this I am not sure that anyone has really answered your basic question.

When BT deploy an exchange for fibre most cabinets will get FTTC, some will get nothing and a few may get FTTP. So as a residential customer you will get either FTTC, FTTP or nothing depending upon what happened to the cabinet that you are attached to, but you will have no choice. Generally FTTP is priced the same as FTTC for the same speed, but of course you do get the option of greater speed for a higher price. In my case FTTC was available 3 years ago but we were destined for FTTP, which I have now been able to order but am still waiting for them to dig up my garden to actually bring the fibre to the house.

FTTPoD (Fibre to the premises on Demand) is different from native FTTP in that Openreach will deploy fibre to your premise on some FTTC exchanges and cabinets but there is a high price for the installation and the only speed option is 300/30 at a higher price then the same speed for native FTTP.

well 1.5billion for a few years of benefit doesnt seem managed to me. But I accept ian's point its a different division.

Also I am not sure if customers will like the idea of BT giving something and then taking away a few years down the line, oh we will give you this feature but if it doesnt pay back for our shareholders in a few years we drop it from the package spec. If it gets dropped churn could skyrocket on top of the churn that was caused by the policy changes on line features to subsidise BT sport.

There is a simpler answer. If a business can get FTTP then so can a residential address.

But, whilst an exchange may support FTTP that may only be available to some houses with other houses served by FTTC, ADSL or no "broadband" at all.

But, there is also the option of leased line services - these can also be bought for residential properties but tend to be outside of most people's price range.

In reply to a post by Ignitionnet:

They're like someone running on a payday loan who'll pay way more in the future to avoid having to pay now.

They've been like that for a while. About 5 years ago my POTS line went faulty, because it was passing the branches of a tree. The tree had grown and the wire was really tight, and movement had worn away the insulation.

They ended up with two normal engineer's vans and a cherry picker van to sort it. I suggested that they should also replace next door's wire, which was took exactly the same route, but the engineers couldn't get permission to do that, because there was no fault reported.

So when it did fail (soon after), the whole circus had to come out again. They wasted twenty man-hours or more to save the cost of installing 20M of wire when they were there the first time!

In reply to a post by Chrysalis:

I am sorry you have failed to understand it properly.

I think your uh, claims were pretty easy to understand at first, they were just wrong. The "senior bod at BT" stuff did seem to disappear off on a tangent though.

The self regulation part of tcp expects packetloss to dissapear when it "slows down" which it typically will do in a normal situation, of course that doesnt happen when an intermediate router is the cause.

Once again, and I can't tell if you do this on purpose or just don't understand why it matters, you've confused two separate cases. If the intermediate router is faulty and is dropping packets or inducing unrecoverable errors as a result of a fault without any congestion, slowing down won't help. Somebody has to repair/ replace the faulty equipment.

But where an intermediate router drops packets due to congestion on a link, slowing down will help, in fact it's more or less mandatory as we saw before. Everybody will have to slow down, and this allows everybody to continue to make efficient use of the link (albeit with their throughput constrained).

Check out the graphs Level 3 released when publicising deliberate congestion on major ISPs in the US (L3 said that they don't see this problem in the UK due to effective competition between ISPs). At peak times these links saw hundreds of thousands of packets dropped every five minutes, which seems like a lot, but this is 100Gbps, so a few hundred thousand packets in five minutes is a tiny fraction of all packets. That's possible because each dropped packet isn't just one less packet to be sent over that link, it's also functioning as a signal to somebody's TCP/IP stack to take its foot off the accelerator.

The other thing you'll see, or rather won't see in those L3 graphs is the real error rate. It's zero throughout the week-long period of the graphs. That's pretty typical. If your packet didn't arrive it wasn't because of an error, it was because of congestion.

In reply to a post by WWWombat:

You're probably right that they will follow these steps, and probably right that they'll pay more.

However, there is a good reason for a business to work in steps like this - it helps them secure a return on their investment in manageable steps, which stops them going bust if they make a bad investment.

John Cioffi points this out in a more US-centric way. The operators will invest a sum of money when they have a certain level of confidence that they'll get it back over a period of time. It helps immensely if they can lock you into a contract for that period.

As you point out, KC have (effectively) a vertical monopoly, and are left with the confidence to invest in something that they won't get full return on for 20 years. BT work in a more competitive environment - and they need to feel safe (or rather their investors do) that they'll get enough of their money back to warrant spending it in the first place.

Stepwise investment gives you stepwise confidence that you'll get a return... and you can stop whenever that turns out to be not as true as you thought.

There is no competitive environment to Openreach to speak of outside of cable areas.

The problem isn't that Openreach are in a competitive environment, it's that they aren't. As soon as competition shows its face BT rapidly find money, be it BT Wholesale in the early days of ADSL, or Openreach in Dolphinholme (with taxpayer help).

Openreach know they'll get paid whatever in many areas so sit on existing assets because they know people have little option but to use them.

If it were about tying people into contracts that's not an issue. Openreach are supposed to fund themselves, not be cross-subsidised by other business units. If they know people have no other viable choice they know they've a revenue stream. Why bother spending money when your CPs have no real choice but to hand you cash for copper that paid for itself decades ago? A swift bit of playful accounting and any excess profits from Openreach, of which there are plenty if stories are to be believed, soon disappear.

A proper regulatory environment to encourage Openreach towards a copper replacement programme would be good, sadly Ed Richards and Ofcom as a whole appear more interested in politics and continue to run an environment actively deterring investment. What right-minded SMP telco wouldn't happily take advantage and sit on assets?

A proper regulatory environment to encourage Openreach towards a copper replacement programme would be good

Interested in what thoughts you have as to how this could be done? They could I suppose get taxes on fibre lowered or removed but people would complain that is just helping to extend BTs monopoly.

They could force BT to install fibre but if they did that would directly impact shareholders as the finance to do it would come from BT profits and could damage the share price - which probably wouldn't be good for the country overall.

They could force low pricing for copper services making fibre more attractive but they are trying to increase competition and so making BT prices lower would actually deter competition as no-one else would be able to match it.

There is a question of how Ofcom can encourage BT to rollout fibre whilst also encouraging other companies to compete at a network level. I think that would be very difficult to achieve.

What about applying a new tax to copper based services, tax per say every 100m (so its also higher on longer lines) and regulate it cannot be passed onto the consumer via higher prices?

At the same time adjust the USO to prevent openreach from cancelling services on long lines (to avoid paying the tax).

Then watch the fireworks as BT takes the gov to court

I think ofcom got hurt by losing to sky in a protracted legal battle, I think there is no willpower to force openreach to progress.

Edited by Chrysalis (Thu 08-May-14 12:48:46)

Whatever BT does will be wrong, the only way it would not would be if a provider was to announce total UK coverage plan and they just ignored anything BT tried to do to slow them down, i.e. was a proper altnet with no use of BT Group resources. Costs prohibitive and we tried this with cable and got to 48% and largely stopped.

What I do know for sure is that there is a healthy circuit of 'what can we do' conferences that have gone on for some years, but nothing significant (i.e. equivalent to a county population) has happened. Maybe this conferences should be at a village without fibre and have a meeting in the morning and roll-out some fibre in the afternoon.

To conclude the sackcloth of poor broadband is one beloved by many, but the constant putting down that results may be having the effect of discouraging investors .

I vote for demolishing the suburbs and building mega cities with FTTP wired flats and banning commutes longer than 5 miles, so that rural areas are not full of sleeper villages.