Change how openreach charge

Like a lot of people my internet is really poor currently I get 2mbps if I'm lucky. I'm not rural and I'm surrounded by villages with both Fttc and Virgin. Fttc is supposed to be coming via connecting Cheshire but it keeps getting delayed.

I was reading some comments on bbc page and someone suggested openreach should have to charge on what the line is capable of. So have tiers based on max speed. Is this not a possible solution? it would certainly make upgrading cabs like mine a lot more attractive.

Already happens

ADSL/ADSL2+ is cheaper than the faster FTTC based products and the faster products are split into two downstream speed groups.

Reality of broadband is its not how fast you get the data that costs, but how much data you transfer.

Lots of problems on how you admin variable charging based on speed delivered, the admin needed might actually result in a real scenario where your price does NOT go down, but others that are faster go up.

It kind of does but not to a level which helps someone like me. Why should I pay the same for sub 2Mbps as someone who is getting 18Mbps?

There is no real alternitive for people on my estate so Openreach have zero incentive to upgrade it. They are getting good money for only having to provide 2Mbps.

You miss the point, ADSL2+ is ball park £5 to £10 per month, FTTC services are £15 to £30 so if the incentive to make more money by providing more speed would really work then the price differentials do exist.

LLU providers have had a big degree of freedom in pricing, but when for examples they do stuff like ADSL2+ is free how do you fit differentials into that

I guess only way is on line rental. openreach could be forced to reduce line rental when Fttc / fast adsl Indy available. Imagine if they were made to half the price for less than 10mbps capable lines all of a sudden I think some estates would see Fttc cabs popping up.

ADSL/ADSL2+ is cheaper than the faster FTTC based products and the faster products are split into two downstream speed groups.

I'm not sure that's really the point. BT for example will sell a 17Mbps service, which if you're lucky to be in a city for example you may get close to the max speed. If you live in a rural area you may be lucky to get 1 or 2Mbps. Yet we all pay the same irrespective of how much data or how fast we can download.

Reality of broadband is its not how fast you get the data that costs, but how much data you transfer.

Not sure I understand that. It would appear to me that the driver for costs - apart from the obvious ;it's what people will pay for it' is the equipment cost, overheads and profit margin BT expect. I don't understand why the amount of data would affect the cost.

Either way BT will know your speed and how much you are downloading over a period of time. BT already have capped services and know when you go over your limit. Mobile phone companies do it already.

Because the more you download the higher the 95th percentile charging for the capacity to the ISP goes up.

Some products are capped, but generally they are not the popular products

And knowing human nature, the people getting 11 Mbps would be the next to complain that they have to pay full price.

UK broadband prices are vastly lower than they were 15 years ago, even though speeds have gone up for the vast majority.

Differential pricing is a nice idea, but can foresee lots of moans and groans and admin headaches.

Also a side effect given there is not legal requirement on Openreach to provider anything more than 28 Kbps internet access is they may withdraw products from areas, LLU almost does this now by its picking and choosing of where to unbundle.

I guess my point is there is zero incentive at the minute for cabs with no competition. What's better for openreach me paying £5 more and having 40Mbps or paying what I'm currently paying and only getting 2Mbps. Probably providing me 2mbps and not having to do any work. They know I'm not going anywhere and I cost them very little as even if I had my 2Mbps line downloading every day of the week at maximum capacity it still wouldn't download a lot.

Something needs to be introduced to incentivise openreach to upgrade cabs like mine. I'm not rural it's not a big job and connecting Cheshire have it as part of the plans. But because openreach know it has no completion and they aren't going to lose me as a customer they really aren't interested in upgrading it.

Edited by kingbiscit (Tue 18-Aug-15 10:56:46)

In reply to a post by Spuriousfish:

I'm not sure that's really the point. BT for example will sell a 17Mbps service,

To whom? I'm pretty sure they sell no such thing. They will sell an up to <some value> which incompasses 17Mb/s as a possibility for some people

The problem for BT is that the costs are the same regardless of the connection speed (and do note what Mr Saffron says as well). If BT only charge by connection speed it will end up doing one of two things:

* Overcharging customers on 'short lines'.
* Losing money on customers on long lines.

Given the costs involved in 'shortening' lines BT will likely just refuse to supply a service beyond a certain line length so you'll get nothing.

And it really is the ongoing bandwidth demands that drive costs. That's why leased lines are so much more expensive per month. The 1:1 contention means that you get to see the true cost of data transportation. Heck - even looking at a business grade DSL connection shows a price jump due to the lower contention/higher priority.

Edited by Andrue (Tue 18-Aug-15 11:38:39)

Where are you in Cheshire? I can't think of anywhere in Cheshire where Virgin supply "villages"

In reply to a post by Icaras:

Where are you in Cheshire? I can't think of anywhere in Cheshire where Virgin supply "villages"

Winwick, Warrington. We are literally surrounded by Virgin.

In reply to a post by kingbiscit:

They know I'm not going anywhere and I cost them very little as even if I had my 2Mbps line downloading every day of the week at maximum capacity it still wouldn't download a lot.

Actually a 2Mb/s line running flat out 24/7 would consume nigh-on 1GB an hour or 24GB a day.

I have a 67Mb/s connection and my average is around 30GB a month. So actually you'd far, far, far outstrip me in terms of cost to your provider.

Something needs to be introduced to incentivise openreach to upgrade cabs like mine.

They have. It's called BDUK. Unfortunately no-one has infinitely deep pockets. For whatever reason it seems like the cost to upgrade your connection is just too high for BT even when your council sweetens the deal.

In reply to a post by kingbiscit:

Winwick, Warrington. We are literally surrounded by Virgin.

So have you contacted Virgin to see why they don't cover you?

And VM is expanding its network from 48% to around two thirds of the UK so might be able to influence them to arrive

An additional consideration is that lines getting 2Mb/s are most likely long lines. The longer the line the more likely it is going to fail and the more expensive it is to find a fault. The argument can be made that long lines are actually more expensive and therefore on a pure cost level would be more expensive to support.

Someone on a brand new FTTP connection to their local DP is likely for the foreseeable future to be much cheaper to support.

Finally, if charging by speed then you would also have to offer the slower speed packages to the properties that could get better speeds - otherwise why should people that just happen to be able to get 40Mb/s but only want 2Mb/s pay a premium?

Trying to charge people at a detailed level on what it actually costs to provide their service would be a nightmare that would involve many complex calculations.

It's not a cost issue. Connecting Cheshire made the estate the first phase as a priority. But openreach can do it in what order they want. So why do my estate with zero competition when other villages have Virgin.

We have tried residents have filled in the form. Hopefully Virgin will come but by that point we will have Fttc. Just annoys me how connecting Cheshire in realty have zero control of the order in which openreach do the work.

Regarding cost in the last 12 months I have lost count of engineer visits. Speaking to openreach engineers they tell, me my estate must cost openreach a fortune on engineer call outs im lucky I get 2mbit most get less than 1mbit and it is incredibly flaky.

It's possible that Openreach are having to wait on 3rd parties for wayleaves, power distribution, etc. Even if they have prioritised it at the top it makes no sense not to progress other jobs whilst waiting for things to come into line.

I can't say for certain this is the case in your instance but without being in the room when these things are discussed there are many factors that can impact the order and speed of rollouts like this.

How far are you from the PCP cabinet?

Really close. Just at bottom of road. When it does get upgraded I should get the full speed.

In reply to a post by kingbiscit:

It's not a cost issue. Connecting Cheshire made the estate the first phase as a priority. But openreach can do it in what order they want. So why do my estate with zero competition when other villages have Virgin.

Connecting Cheshire (your BDUK project) cannot subsidise any BT cabinets where Virgin have coverage.

If your cabinet is not getting upgraded yet, it is due to something other than BT choosing to spend the subsidy competing with Virgin.

Because the more you download the higher the 95th percentile charging for the capacity to the ISP goes up.

Nope don't understand that. BT operates my broadband and BT is my ISP.

The real issue with rolling out a good service to all, is the accountants. Like a good many companies BT salami slices their operating region into areas, each of which has to show profit. They have no concept of subsidizing those areas deemed less profitable from those that are. It's about time BB was deemed a Utility - although I don't know for sure what difference that would make

Finally, if charging by speed then you would also have to offer the slower speed packages to the properties that could get better speeds - otherwise why should people that just happen to be able to get 40Mb/s but only want 2Mb/s pay a premium?

This is not hard to do since the ISP can jut apply an IP Profile for a specific speed band.

In reply to a post by kingbiscit:

It's not a cost issue. Connecting Cheshire made the estate the first phase as a priority.

Ah, sorry I missed that detail. As you say BT can do things in whatever order they want and it has to be that way. Only BT knows what needs to be done and only BT can decide the most efficient way to do it. CC have no idea where BT's cables go or how best to upgrade an area. The have to leave it to openreach to plan the actual work.

Openreach may have decided to tackle another area where they can upgrade more people in a shorter time period. Or perhaps they need specialist equipment for your area and unfortunately it's tied up elsewhere. Or it could be a third party - power supply to the cabinet being a bit of a thorny issue sometimes.

Edited by Andrue (Tue 18-Aug-15 13:59:55)

it is a new estate there is also some responsiliblity on the developer tto ensure good infrastructure in provided for new homes

This is not hard to do since the ISP can jut apply an IP Profile for a specific speed band

It still doesn't equate to cost though.

If I have an FTTC line capable of 80Mb/s then I could pay for 80Mb/s, 40Mb/s or perhaps add on 20Mb/s, 10Mb/s, 2Mb/s.

The actual cost for BT OR providing me the 2Mb/s version is identical to them providing the 80Mb/s. No difference in operating costs, running costs, maintenance costs, etc, etc. The only difference is how much I use the connection and when as that drives how much backhaul that needs to be bought. A heavy user on 2Mb/s could easily cost more to run than a light user on 80Mb/s.

This is why charging by connection speed doesn't work. That is not where the differential costs are - the differential is in the backhaul.

I was reading some comments on bbc page and someone suggested openreach should have to charge on what the line is capable of. So have tiers based on max speed. Is this not a possible solution?

There are also those who feel that BT should charge based on the cost of installing and providing the service. Supplying low density and/or remote rural locations is undoubtedly more expensive than supplying more populated urban locations.

In reply to a post by Spuriousfish:

The real issue with rolling out a good service to all, is the accountants. Like a good many companies BT salami slices their operating region into areas, each of which has to show profit. They have no concept of subsidizing those areas deemed less profitable from those that are. It's about time BB was deemed a Utility - although I don't know for sure what difference that would make

You are wrong there. BT does subsidise less profitable or loss making areas. Take some of the remote locations in Scotland - every year there is likely to be a cable brought down - a cable feeding one or two properties. It may take a full day for two technicians to restore service at a cost of £1000. The line rental does not go anywhere near that. Or what of an exchange building that has maybe just 25 lines - cost effective and profitable? NIO, subsidised by those in the cities. BT cannot cross-subsidise across products but certainly does geographically.

In reply to a post by ian72:

A heavy user on 2Mb/s could easily cost more to run than a light user on 80Mb/s.

And it does happen! A friend is on an ADSL line running at around 1 to 1.5 Mbps and his combined Down + Up data volume is probably higher than mine on a connection running at 75Mbps. My downloads tend to be measured in seconds - last time I was there, he was running a data transfer that took over an hour.

You are wrong there. BT does subsidise less profitable or loss making areas. Take some of the remote locations in Scotland - every year there is likely to be a cable brought down - a cable feeding one or two properties. It may take a full day for two technicians to restore service at a cost of £1000. The line rental does not go anywhere near that. Or what of an exchange building that has maybe just 25 lines - cost effective and profitable? NIO, subsidised by those in the cities. BT cannot cross-subsidise across products but certainly does geographically.

Actually I do live in a remote area of Scotland and because we are few in number the number of faults is less than in a city area in total. All our cables are underground from the nearest large village. Faults that do occur are more often or not those caused by BT themselves as Openreach always seem to be messing around with something. Personally I think they come here to hide, since mobile coverage is sparse

But if they do subsidize less profitable areas why wont they extended the fibre service to us folks just 8-10km away from the last cabinet. Because its not profitable.

Just as another example Plusnet, who I used to be with, could not offer me the same price as a city dweller as 'we were outside their low cost area'

Just as another example Plusnet, who I used to be with, could not offer me the same price as a city dweller as 'we were outside their low cost area'

If you want to blame someone blame Ofcom who are fixing what BT can charge and this is more on Market A exchanges than those with an LLU presence with the intention of this being an incentive for others to invest and get a return.

Can I ask whereabouts in Scotland you are? I have some interests up there too and am a regular visitor to some very remote parts.

I'm on the Isle of Skye

not strictly true andrew.

Increasing a line's speed costs money, why do you think openreach refuse to do reroutes, pair swaps, replacing copper etc? It costs money.

Was the FTTC rollout free? no, burst speed costs money.

Also with a percentile billing for backhaul burst speed costs money that side also.

Of course if someone uses more data they more likely to be at their line speed for longer periods of time, so usage goes in hand with line speed.

A user pulling 100gig a month but all at midnight to 6am probably doesnt cost the isp anything extra in terms of backhaul due to the nature of percentile billing, so also the time of day has an impact on cost.

Openreach been made to bill based on line speed would break their business model, would never happen. Also would probably be too complex with line speeds changing all the time due to crosstalk etc.

Edited by Chrysalis (Wed 19-Aug-15 08:22:20)

Was the FTTC rollout free? no, burst speed costs money.

Note: If you read other posts then I have pointed out that ADSL/ADSL2+ is generally cheaper than FTTC so covers your gripe about what I said.

Yes someone pulling data overnight will not contribute to the usual 95th percentile billing.

The UK tried usage billing i.e. limits were a lot more common for a while but then largely disappeared for the reasons you mention billing complexity, believe the ones that exist still are just there so you can advertise 'product xyz from £3.99 per month' and tease people in who then sign-up to unlimited.

The ultimate way that I think some want to go is this:

1. Line installs charged per minute of engineer time with a minimal call out fee
2. You pay per Mbps of line speed available to you
3. You pay per GB of data downloaded
4. You don't use the line at all you don't pay

i.e. those who've never had a fault feel aggrieved at having to pay so much in line rental and other basic charges.

At the other end there is those that want one nationalised Telco where they will provide perfect service on an equal basis no matter whether in the Hebrides or a 20 story block of flats over looking the Thames and FTTP replace all copper within a year or two on all 27 to 30 million lines.

In reply to a post by MrSaffron:

At the other end there is those that want one nationalised Telco where they will provide perfect service on an equal basis no matter whether in the Hebrides or a 20 story block of flats over looking the Thames and FTTP replace all copper within a year or two on all 27 to 30 million lines.

It amazes me that anyone still thinks nationalisation of anything is a good idea. But nationalising our telco network after RIPA, Echelon and all the rest of it and general eGovernment incompetency seems almost unbelievably silly

But you're right - there are people around who think it's the best way forward :-/

Openreach is far from perfect, but a great many of the faults can be addressed with remedies that

a) Won't tie up time and money in the court system
b) Will allow current work to continue
c) By having a provider with its faults it gives smaller more agile operators a way to carve out niches
d) Cause a lot of confusion to public and providers.

If Openreach was nationalised then it is possible compulsory purchase orders could be made for various alt-net projects and attempts be made to integrate this into a new 'one network' and licensing might be used to stop alternatives from re-occurring. Openreach may be seen as predatory, but they have nothing like the powers a nationalised operator could deploy.

for what its worth I prefer todays situation to that what we had 5 years ago.

5 years ago we had 24mbit adsl2+ been the same price or even cheaper than a 1mbit adsl line, Made me so angry I jumped ship to VM.

At least now there is multiple tiers of FTTC and adsl below that cheaper. So no we do have some speed based premium which is how it should be.

Per gig billing is so backwards, it would take us back to the internet stoneages.

Regarding engineer billing time, per hour yeah, but per minute is silly.

The problem is an end user cannot ring up their isp and say give me a quote for a full check e.g.

junction box
nte5
all joints between home and cabinet/exchange
top of pole

Openreach offer no such service, instead they just offer a service that does an extremely basic check which (in my opinion) is designed to pass faulty lines. They only checking for sin complaince. AAISP posted a pic on a blog of a communications cabinet infested with bees showing an example of something passing sin but not in a good state.

A big part of the problem is the retail isp's, openreach are far from great, but they take all the blame instead of half of the blame. what the isp's dont tell the end users is the modules ordered for engineer visits so e.g. they may have only ordered a basic JDSU test which I assume is the cheapest callout, and then the customer is angry the engineer leaves only doing that test which unknown to them the engineer is doing what the isp asked.

Then of course we have the situation where openreach give a lot of information to the isp's about DLM etc,. and pretty much none of it is passed on to end users. Its all kept in a big shroud of secrecy. An example of how bad this is, is the recent g.inp rollout which came with no warning to end users and broke 100s of thousands of lines. (yes I consider artifically raising latency due to bad configuration a broken service). End users were left blind as all isp's gave statements the secrecy continued, and only when openreach made some comments to the press alongside unofficial leakages did end users get information.

The problem is basically openreach is too far from the "real" customers, the end users. The isp's arent openreach's customer, they just a middle man. Its an artificial business arrangement drawn up by ofcom which is failing. Its my view when an engineer visists they should have paper work with them to show to the end user what exactly has been ordered, and before leaving the end user should sign off the work, and be able to refuse to sign off if the work isnt satisfactory.

Some examples of end users been misled.

1 - isp claims they cannot reset DLM - wrong they can move a line between DLM profiles or openreach products, which will trigger an automated reset, of course this costs the isp's money hence they dont want to do it or let end users know they can do it.
2 - isp claims they have no idea when DLM will recover - wrong, plusnet posted some information (back when they had a good forum support crew still) showing that they can check DLM for individual lines and how long it has to recover, after they were pressed to show this information automatically tho they stopped giving out more info.

Openreach are far from perfect. Look at other countries to see how bad they are, in romania a home user can get the telco out to fix a line the same day without any threat of fee's. Same in belgium, same in holland, same in sweden. The service level of openreach is hideous, I had an engineer here once tell me he was amazed I had a exec escalated fault after one engineer visit in his words "usually its after a dozen or so visits", so he basically considered a dozen visits for a single fault normal, crazy stuff. Openreach also are the company who are bodging up FTTP installations again something other countries have got on top of for many years now, bodged up g.inp, and managed to rollout a ton of cabinets that dont even fit their business plan.

There is something seriously wrong with openreach, that you have to wait 2 months for a line install, wait a week or so for a fault visit and alongside that a threat of a fee if their basic SIN test passes.

The regulatory position is that Openreach prices are cost-based. If that was taken to the extreme, then it would mean that those on the more expensive to provide and support lines would actually pay more. So areas in high density population areas would pay less and those in low density areas would pay more. As it happens, the regulator has decided (for social reasons) that there will be a single wholesale charge for a line, regardless of actual costs.

So, in principle, (for the line at least), if this cost-based principle was carried through, those on longer lines would actually pay more, not less.

As far as broadband speeds go, there is really no cost difference to OR on how fast a line can run. The sole exception (just about) is the amount of fibre bandwidth required from an FTTC cabinet to the hand-over point. There is a partial recognition of this in that the GEA/FTTC product has slightly different costs according to speed.

Where there is a more significant difference if incurred costs, then that's in the realm of the back-haul, peering and other issues and is really a factor for ISPs.

It has to be borne in mind that OR (GEA/FTTC apart in the mass market area), is a provider of basic network infrastructure. That is (mostly) copper pairs plus a small amount of fibre. That (over copper) broadband is being delivered is something of a fortunate accident. If OR was regulated as a provider or BB (rather than basic network), then that would be a different thing, but that is not how it is set up and it also doesn't reflect market conditions.

It's important to remember that OR don't provide ADSL or ADLS2+ products. They are merely providing a metallic path. The idea that OR should be charging less for longer lines is probably diametrically opposite to the costs OR are incurring (a principle of cost-based price regulation). It may seem unfair that a less capable line should actually cost more to provide, but that's an accident of history. As it is, the regulator averages out different line costs for social reasons.

GEA/FTTC is, of course, a rather different matter. OR do provide much more of the "value chain", but here again I suspect the costs incurred for different speed lines are not substantially different. It's the back-haul, peering and other things which are very different, and those are in the realm of ISPs, not OR.