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back to article Sky in surprise duct-and-pole-sharing trial with BT

Sky has become the first major ISP to sign up to a duct-and-pole-sharing trial with telecoms giant BT. The move appears to signal Sky's plans to deploy its own fibre atop BT's existing network of ducts and poles, access to which was made available following an agreement with UK communications watchdog Ofcom in March 2010. BT …

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Virgin

Virgin paid for their own network: BT was handed there, previously publically funded, network to them.

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Virgin paid for their own network?

Erm, surely NTL and Telewest paid for the network, and lost billions in the process, which Virgin then picked up for less than the original cost?

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@Ol'Peculier

To be fair, BT's shareholders bought the publicly funded network from the government.

Whether they paid a fair price for it is up for argument though.

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FAIL

Re: Virgin paid for their own network?

Erm, surely NTL and Telewest paid for the network, and lost billions in the process, which Virgin then picked up for less than the original cost?

Gawd, when will people learn. NTL:Telewest trade as VirginMedia. They paid Virgin Holdings £10million for the right to trade under the Virgin brand name. Other than that, they are not Virgin and have nothing to do with Virgin.

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Bought not "given"

The BT network was bought by the shareholders. Adjusted for inflation the government received £25bn for the company in the three tranches of share sales. Those shareholders had a right to expect the rights to the assets they bought to be respected.

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@Tom 28

A whilst ago I worked out how much BT shareholders paid for the company adjusted for inflation using the three tranches. Note that the price per share went up in all three tranches - £1.30 for the first, £4.00 for the last.

Year £m Index 2010 £m

1984 3,916 2.4 9,397

1991 5,000 1.6 8,000

1993 5,000 1.5 7,500

total (in 2010 £m) 24,897

Note, index is RPI relative to 2010 pounds.

Current BT Market cap is around £24bn

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Less than that though

For that £25bn, they got BT and O2 shares - when BT demerged Cellnet, they gave everyone an O2 share for every BT share they held. O2 was subsequently taken over by Telefonica and the O2 shareholders got cash. The demerged BT shares are treated as being 77.544% of the old shares, and the O2 shares are treated as being the remainder. That means the shareholders paid £19306m in 2010 money for the BT network and £5591m for the Cellnet (now O2) network.

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O2 (or rather Cellnet) did not exist in 1984

The O2 (or Cellnet) as it was network did not exist at the time BT was privatised and the first tranche of shares was sold. It was created as a partnership in 1985 with Securicor owning 40% (although the latter was essentially a sleeping partner). So there isn't really any sense in which the O2 network was built by the state and bought by shareholders. The state had no role in the funding of the Cellnet network.

Of course there's an argument that the bandwidth was "gifted" to Cellnet, but that also applied to Vodafone too.

Of course the other things that has to be taken account of in the capitalisation is the rights issue in 2001 when almost £6bn was raised from shareholders (probably the equivalent of £8bn or more now).

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Anonymous Coward

I don't get it

"In today's statement BT was quick to point out that ISPs that want to build their own broadband network by paying the company licence fees in order to deploy their own cables would be burdened with "significant capital costs"."

Not sure I understand this BT quote. What are they suggesting? That companies do not, in fact, sign up to the duct and pole sharing scheme? Which the goverment mandated? So what's the point?

To me this means "We're covering our backsides by going along with what the goverment requires of us but we will make it so difficult for you to make money you won't want to use it"

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Duh-huh!

sticking extra wires on poles increases the loads on the supports enormously (srsly). Only bt really know how knackered their oh support equipment is. There is bound to be some small print in the agreement along the lines that anyone wanting to up the load on bt's infrastructure must foot the bill for feasability studies and upgrades/replacements. This is costly - very costly.

Ducts is even harder!

I know from experience that you can forget about sharing fibres in the same cable with anyone - the commercial risk is untenable. and blowing new fibre into existing ducts is a nightmare/impossible.

so yes you can legally do it, but practically... no, or at least prohibitively expensive.

everybody wins :D

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Battle of the White Vans

"assess "real costs" connected with ISPs deploying their own broadband network via the company's wholesale Openreach infrastructure"

Like bribing the Openreach engineer who knows which brick the cabinet key is hidden under with a nice cup of tea?

(and would his counterpart from Sky recognise a hole in the ground when he sees one? Should be OK with the ladder part, though.)

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Anonymous Coward

"Sky has previously criticised BT rival Virgin Media for failing to open its network to ISPs"

And when Sky opens up IT'S network of TV channels for Virgin to use I'm sure Virgin will respond in kind with it's infrastructure*. Ever since Sky1gate I've really not been happy with the deals that are done between the two companies, and we still don't get the full range of channels even if Virgin are willing to pay Sky a reasonable fee for them.

*it's more likely that neither will happen.

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Well...

A good deal of the sky platform isn't owned by sky - hence why the same satelite and same unecypted channels are used through Freesat and Sky.

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Openreach

Presumably this is being done in partnership with Openreach.

Openreach exists to allow rival operators access to BT's infrastructure as part of an agreement with Ofcom. I would not be at all surprised if BT eventually spins Openreach off as a separate company (think National Grid for telecommunications).

On the subject of Virgin Media, I've held for a while that it too should spin out it's infrastructure arm (perhaps a rebirth for National Transcommunications Ltd aka NTL) which would produce a model a little closer to the more successful BSkyB one.

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@Conrad Longmore

"Openreach exists to allow rival operators access to BT's infrastructure as part of an agreement with Ofcom. I would not be at all surprised if BT eventually spins Openreach off as a separate company (think National Grid for telecommunications)."

That should happened *long* ago.

As a division the sense that BT gets just that *little* bit better service when it's got its ISP hat on is hard to get rid of.

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What's the betting

That all the areas they do this first are ones already covered by virginmedia cable, rather than bringing nice fast broadband to those who need an alternative to BT's wires.

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WTF?

Eh? What? Which bit?

"While BT's network and Sky's satellite platform are open to other service providers on fair, reasonable and non-discriminatory terms, it is increasingly anomalous that Virgin Media's cable network remains closed," Sky claimed in its March 2009 'Digital Britain' interim report.

Erm , which bit of the Astra satellite constellation do Sky own and which bits do they sell or rent out to competitors then? And do SES Astra know about it?

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Grenade

The EPG

Sky are legally required to offer space on the EPG (which as far as most consumers see *is* the platform,) and access to the conditional access functionality, to any channel which meets basic OFCOM requirements, on fair and non discriminatory terms.

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IT Angle

Sky and British Telecom

A while ago, BSB lost out to a cosy chat between Telecom, Sky and Thatcher.

The result ended up in the creation of BT and Sky getting dominance of UK satellite broadcasting.

Later on there was a mad scramble when world+dog jumped on the cable bandwagon and most were eaten up by a few.

This incest continues and Mordoch gets richer

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WTF?

Sky? Open? Since when?

I don't think the Sky satellite platform is at all open...

The channels are broadcast from satellites operated by a third party (SES Astra), which is how Freesat is able to operate... But when it comes to the channels which are actually owned by Sky it's a whole different game.

The channels are encrypted using a proprietary scheme, and you are forced to use the (rather lousy, big, noisy and power hungry) hardware that they supply in order to view them. And some of the channels are only available via the satellite platform...

If sky want to talk openness, how about they offer ALL of their channels for broadcast on cable, and allow users to view their channels on any hardware they want.

I don't want to have a large, noisy, overheating, intentionally crippled, sky box when i can get a massively superior third party box.

Some people are unable to get a satellite dish (flats, obstructions to line of site etc), so the channels should be available via other means.

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@ Joe

Sky payed for the ball (and their content), that's why they decide who gets to play with it. Why should sky assist their competitors?

VM et al are welcome to setup their own channels and buy their own content, but they dont seem to want to, hence the sale of living to sky.

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Note that Skye has *no* ducts of it's own.

So this is a win win for them.

Sink a bit of money in this "trial" (while BT prices real landline based competitors out, which seem to be the thrust of their competitors argument about access charges).

Get browny points off BT.

Stuff Virginmedia. Interesting point that in fact this is "Virgin" in name only, like their mobile service someone else does the *actual* work.

Competition.

They've heard of it.

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WTF?

Sky - pot - kettle - black

Sky - pot - kettle - black

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BTW is'nt access to Sky's EPG the same issue as access to BBC Canvas EPG?

I think they might be related.

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