back to article BT could jack up line charges to fill pensions hole

Ofcom is pondering allowing BT to jack up its line charges to allow it to lighten the £9bn pension deficit hanging round the neck of the former state-owned telco. The possible move by the regulator could see OpenReach, BT's wholesale arm, up its charges by as much as 4 per cent. This would in turn land on those companies which …

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Anonymous Coward

Quite right too

If any company needs to increase it's revenues, it increases its prices. How is BT any different?

Not that I'm biased at all.

Yours,

AC (future BT pensioner)

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Close OpenReach down and save up all

Maybe because OpenReach is a monopoly that could not wipe it's own arse. Sack 30% of the dross and maybe open up to other companies and I would be sympathetic but not when they already rip the country off with some crazy prices.

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FAIL

Nice move BT

That's right, instead of taking a hit from your own profits to fill the hole to pay for the bad management of your business we all pay for it now.

Maybe they should sell-off part of the business to raise the funds.

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shake up BT

maybe they should sell the part which maintains the line and maybe they will actually change the cheapo aluminum wires to copper which BT should have done ages ago ( and I live quite close to london city center )

crap service they provide, they should be shaken up a bit

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Anonymous Coward

They could

sell it back to the nation it was purloined from, perhaps?

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How about the government buy the local loop part of BT and nationalise it with Ofcom being the regulator??

BT should take this price from their profits not from it's consumers.

I know of BT engineers which were put into call centers and treated like dirt so they would leave and then BT would replace them with cheaper employees - I have little respect for a company which behaves like this.

Mike

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It's an Equitable Life... NOT

It's a shame Equitable didn't have such a monopoly control over some critical infrastructure that it could do the same.

Equitable had to let down it's shareholders (pensioners) because it made unsustainable promises (final salary pension scheme)

Why does BT get the chance to raid its customers to pay for the unsustainable promises it made?

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Stop

Openreach

Surely BT Wholesale would be BT's Wholesales arm, not Openreach, just a little moan.

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Silver badge

Hmmm

On the one hand, I can see why BT need to raise revenue.

BUT, it is them who should shoulder the costs, not everyone else. They could always raise their own broadband package prices.

I dont know, just smacks of "We need money, give us money" to me...

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@Dr Mouse

Dr Mouse, you appear to have little grasp of BTs structure. They probably will put up their own prices; if Openreach increase their line charges, that will be passed onto BT Retail. They're a customer of Openreach/Wholesale, just the same as TalkTalk, Sky or any other LLU provider.

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Anonymous Coward

Let's Build a New Jerusalem

screw BT, let's do the cabling ourselves, and quite frankly the cabling already belongs to the people, Maggie sold it off without a by your leave.

People need to buck up their ideas, and start to build this country back up, ignore the establishment, and just push forward.

We can fine BT for cluttering up the landscape, and put in our own modern telecommunications network in England's green and pleasant lands.

-- Last of the Britons.

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Re: Let's Build a New Jerusalem

Good idea - let's team up. I'll bring a shovel, you knock on doors and people why we're digging up their street again.

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Boffin

@ac

"-- Last of the Britons."

So that'll make you...... Welsh? (Briton is pre-anglo-saxon, or as they are now known, Welsh).

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Why not bail out the pension funds?

Not wanting anyone to think I'm a heartless bastard (not called TickTock for nothing....!)

if we can spend billions in secret to bail out banks, what's another £9billion?

As long as it goes direct to the pensioners, mind...

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Coat

Jail the Directors first

If its a choice between BT conducting mass communication surveillance, industrial espionage, copyright violation, computer misuse, and fraud... I'd gladly pay more.

But only when the current Directors are in jail.

The coat, because BT always seem to have their grubby hands in it.

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Anonymous Coward

simples

Seize the assets of the managers who were running BT when they took a "pensions holiday" in the 1980s, simples!

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Seems Reasonable

Seems quite reasonable to me for BT to increase prices if their own costs of operating have increased. It's what most other companies would do in this situation if their prices were not regulated. Unbundling will still be pretty cheap.

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This is a title...

They took a huge long holiday from pensions contributions and now it's coming back to bite them in the arse. That's why they have a pensions hole, not because of any increase in operating costs.

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oh well, if it's for the pension defecit it MUST be ok

I'm sure the increase they decide on will be just enough to cover their defecit, I mean they'd never add a bit on top just for a bit more revenue. Would they?

In the words of the Snoop sat nav 'There's a slippery slope ahead. Fo'shizzle'

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Everyone elses Pension

Why do I have to pay towards these pensions. They dont pay towards my defined contribution pension where I will retire at 70 on less than a half of what these people get retiring at 60.

The UK is utterly fucked up, seems the youth of today are seen as slaves to pay for the current generation to have pensions, houses and lives the young will never have.

If BT employees want their pension then they better pay in more to cover it.

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Way to contradict yourself....

"The UK is utterly fucked up, seems the youth of today are seen as slaves to pay for the current generation to have pensions, houses and lives the young will never have."

And

"If BT employees want their pension then they better pay in more to cover it."

So the young pay more for the old?

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WTF?

Reasonable?

"Seems quite reasonable to me for BT to increase prices if their own costs of operating have increased. "

This isn't operating costs but pensions.

The same pension fund that BT have messed around with for ages.

But now it seems that those of us who paid to have the lines installed - taxpayers - and then given away to only pay for them again - LLU - are now supposed to pay again to top up thier own pensions while those at the top piss it all away - again and again and again.

BT squandered huge amounts of money on Broadband while never really understanding the product (several years of Helldesk work at Wholesale for experience) and now expect ex-employees to fork out even more.

I just hope there's some left in 5 years time - it's when I'm supposed to be beginning to collect mine.

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The sums do not add up

Pension plans like this are the ultimate Ponzi or Pyramid scheme. They will work for a few years, but are ultimately doomed to collapse - long after the people who made the promises have departed and probably died.

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Grenade

Makes sense

If there is a proper set of measures put in place to guarantee a portion of line rental is directly put into the deficit with strict guarantees then this makes a lot of sense.

It will be cheaper to deal with this problem on a monthly basis than a government bailout.

Someone made a silly comment about BT just raising it's own BB cost and charging it's customers to bail it out. That's one sure fire way to make it worse. If more people left due to high prices, then there will be less money going into the company to pay the debt...

No matter what - you'll end up paying for it through tax or phone line rental. Get used to it.

Grenade - why ? Cause when there's a reasonable idea that if done correctly may avoid some BT pensioners keep their pensions, the haters explode.

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LB
FAIL

Dam BT

Thats it then, over to mobile and mobile broadband only.

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Anonymous Coward

blinkered

Everyone pays for everyone else's pensions, like it or not.

Big pension funds worldwide own Trillions of shares and bonds; thus some of the profits of almost every mundane purchase will find their way into someone's pension!

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Grenade

Smash and Grab

The BT Pension scheme was always tolerably well run. The final salary scheme, for instance, was closed to new BT recruits years ago.

If only James Gordon Brown hadn't carried out a smash and grab raid on pension fund income there might not be such a large shortfall to fill. It was one of Gordon's clever stealth taxes - take money from somewhere not obvious... that flapping sound you hear is pigeons (vultures?) coming home to roost.

The grenade, because nothing happens when you pull the pin... well not immediately anyway.

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Gold badge

What's changed here?

Is this company related to the "BT" that posted nine squillion pounds per second profits for a couple of decades? Is this pension related to the one that everyone signed up to thirty years ago and hasn't changed since? Why should BT be allowed to change their bet after the race is run?

This is a liability that the company has known about and evidently paid insufficient attention to for years. The shareholders should just accept that theirs is a badly run company and stump up the cash for the pension fund. If they don't like that idea, they should sell their shares to someone who does. It's called the free market. The rest of society does not owe the shareholding classes a living. If you are a direct shareholder, you have a responsibility to ensure that the company is well run. If (like most of us) you are an indirect shareholder, through pension funds, then you had better hope that your pension fund manager is doing that job.

Whichever way you cut it, this is not a situation that has "suddenly" arisen and is deserving of special treatment. Everyone else in the industry has presumably been making *their* business plans on a (reasonable) assumption that the rules *won't* suddenly change. I think that assumption deserves to be honoured.

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Anonymous Coward

Too right

Since the first shareholders were the ones who had spare cash at the time and all those without got shafted by the privatisation, so why the hell should they pay now? It isn't so very different from merchant bankers getting (away with) those bonuses, paid for by the rest of us.

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Black Helicopters

Got It

I am a BT pensioner, I joined as a civil servant yonks ago, got pissed off with management, got EVR & took my pension.

I do agree with a lot of what you say. The waste of talent in house, many get fed up & leave. I was dealing with OLO's interconnections at times. You think BT was bad the OLO's could be amazingly awful.

You know the story, cease some 2mb circuits that carry all the interconnect C7 signalling, if we refuse they cry to Ofcom. We then cut them off, they cry to Ofcom! We told you so makes no diference.

I did 13 years on Data Management/Exchange Configuration and there were major interconnect routes that I provided for an OLO, enlarged, left for years but never used but finally recovered. A massive waste of resources.

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Anonymous Coward

You don't need a shovel

just start hooking up fibre with your neighbours, run blue tooth, and WiMAX between communities as necessary. If we got rid of the BBC that would open some more bandwidth as well, with no great loss.

Over time it would all just mesh without forms of centralized control.

Though digging up the roads could be fun, pneumatic drills and all that stuff, though sewer system would be a better option.

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Pirate

Bad all around

Plenty of blame here - but imho mainly for the bozo's 'in charge' at BT.

If they've got a predicted hole in the pension pot then surely they should be asking the staff to contribute more money. And I'm not pointing fingers at others, I was in the same position with my final salary pension and was quite content to stump up a bigger slice of my salary to cover it. After all, it was either that, or go onto the much less favourable defined contribution scheme.

That said, surely if BT need more money the they've got a perfect right to ask for it from their customers - they're just yet another commercial company after all (all be it one that has a near monopoly position in their market). But as a commercial company, the Financial department surely should have been keeping a close eye on the pension fund, so if there's a hole, then they've obviously been "asleep at the wheel".

So, if they do go ahead and soak their customers to make up for incompetence at, or near, the top - then I would suggest that the BT shareholders should really be asking some uncomfortable questions of the BT board, and especially the CEO and CFO. Oh, and while they're asking uncomfortable questions, how about asking about executive pay+pension packages at a time when the rank and file are "staring into the abyss" over _their_ p+p.

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final salary pension

You realy don't get how they work if you thing that.

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BT made the problem

and its up to the shareholders to pay the price.

Many years of pension fund holidays to give more money in "profits" to shareholders seems to have been ignored by BT.

Maybe the shareholders need to feel some pain for a few years to make up for the deficit?

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Grenade

good luck to them...

My last bill was about £50. Total cost of calls about £2.50. Using cable broadband and a nice new phone I can use VOIP with a geographic number for next to nothing.

Bye bye BT. So glad not to have to put up with being a customer/victim of your crap organisation any longer.

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@ AC "Quite Right Too" (1st Post)

You asked:-

"If any company needs to increase it's revenues, it increases its prices. How is BT any different?"

Answer : BT weights its charges onto the standing charge and little on actual use. They make me pay a standing charge of over 50 quid a quarter for having a master socket that must have cost them less than a quid, and say a mile of two-core signal cable to the exchange that must cost less than a fiver Then a share in some light electronics at the exchange itself and the signal grade trunk cables. I use the line only for about an hour a day.

Call out costs? I've never called out BT in my life. YMMV.

My mother (too old to learn a mobile) had a similar standing charge and she only used the phone about five minutes a year.

Compare this with the electrical power supply system that involves heavy cables to my house, a meter to be read, the National Grid network of tens 0f thousands of pylons carrying power grade cable - at the end of which are mighty power stations that each cost billions to build. And I use power 24 hours a day.

Yet my electrical power supply company has ZERO standing charge.

On top of which BT make me pay an admin charge for paying my own bill!

BT are the jerks who send me leaflets with the "good news" that calls to Timbuctoo and Dhulali have got cheaper and by the way the line rental has been increased.

BT are the only utility that makes me angry. They are bar stewards.

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FAIL

Point blank no!

Why Openwoe should get more money because BT was decidedly generous with it's pensions has and should have absolutely no repercussion on Openwoe's charges. If BT has a pension shortfall, with or without the Openwoe branch, then it is BT Retail and other divisions that need to fork out the money to pay it.

Openwoe is by all intents and purposes nothing to do with BT, though due to Ofcom's toothless and incompetent nature, BT still maintains a monopoly on the communications world.

If Openwoe has a problem with pensions, then simply make it more efficient by replacing staff with less costly ones, and until Fibre is installed throughout the land (not just highly populated centres) with the *average* broadband speed across the nation able to confidently stream HD media (TV over IP), while simultaneously guaranteeing VoIP and low latency data services, then Openwoe isn't justified to a single penny.

Needless to say, given that the wholesale price of a line is £7.80 if we change provider away from BT, but in the process also introduce migration issues (Ofcom incompetence again), then we have to continue to pay the £11-odd and ~£3 rip off to BT for the privilege of having a voice service no one uses in order to use ADSL, which isn't good enough to support the broadband infrastructure going forward anyway.

Fail, fail, fail and no chance of extra cash for more fail. Fix the comms infrastructure first, then we might be a bit more leniest to paying you a bit more cash. In the meantime no chance.

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Pirate

@ LJ Vino

It was an act of theft originally.

The whole operation should be given back to the taxpayers who originally funded what WAS a profit making company. Giving BT back to the taxpayer should come under the legislation for seizing the assets of criminals.

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Grenade

Pensions time-bomb

Ken Hagan hit the nail on the head re: shareholder issue that should be resolved through a 'rights' issue - primiarily because the shareholders have a responsibility (ha!) to make sure the company is well run.

That's the theory, which fails in practice because unfortunately, small-shareholders (private individuals whom choose to purchase BT shares) have zero influence; and many of us are indirect shareholders through pension funds [institutional shareholders].

In the same way that we are indirect shareholders of banks through HMG (I am also a RBS shareholder for my sins - and deserve my 80% haircut for my 'investment' / ignorance. The kick in the balls is also being an indirect shareholder resulting from being a tax-payer).

Grenade icon because this has been a ticking time-bomb for many a year, and absolutely no attention has been paid to the burgeoning liability. BT is less Telco company, and more a Pension Fund (a poorly run one at that), with a tiny Telco business tacked on. The pension liability [debt] was one of the fundamental reasons why BT never appeared on my investment radar - although RBS did [idiot]!?

However, as alluded to by some posters, most of us will be indirect shareholders through Pension Funds - hence will indirectly be affected by any 'rights' issue. That said, any tax and/or attempt to plug the gap through raising prices is a losing strategy because customers will switch to another provider (where possible) - reducing revenue and adding to the burgeoning Pensions abyss.

For any affadavit, I am fortunate enough to be in a final salary scheme (not BT nor Government) - yet I'm becoming increasingly concerned whether it is sustainable and how secure the scheme will be when I reach retirement. Seriously considering pros and cons of switch to a SIPP once I leave (I'll won't be hanging on until retirement).

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Grenade

Shareholder Greed

Every shareholder past and present who has profitted from many a pension holiday, thus creating this huge deficit should be dragged through the courts for missappropriation of funds and be made to pay back their ill-gotten gains.

The long and the skinny of it is: Merely by having such a massive deficit the board and shareholders have proven they're at best negligent/imcompetent and at worse theiving bastards who should be dragged out of their ivory towers and fed to the wolves.

There's no justification for hiking up prices and stinging consumers, some of whom have deliberately gone to a LLU to avoid being bent over and mercilessly robbed by BT's GreedySquad. This isn't a reult of increased operating costs it's typical monopoly-got-fat-and-useless syndrome

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