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back to article Ofcom proposes fall in BT Openreach charges to rivals

BT will be forced to cut the prices of the access charges it applies to the company's broadband and telephone lines when leasing them out to other providers, Ofcom said today. The communications watchdog, which regulates BT's Openreach division because the business has a dominant market position in Blighty, submitted its " …

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Facepalm

Who wins?

So that's a miraculous saving of 30 odd pence per month for a year of unbundled phone and broadband!

Will we see that translated to lower cost for the consumer? Of course not! That's just a tidy little profit boost for all the other companies...

What's that BT? Your increasing charges elsewhere to compensate. Who's paying those charges? Oh yeah it's the lowly consumer again!

As always, at the end of the day it's just us getting screwed.

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Not only that, but Openreach will use this as yet more justification for the poor maintenance and lack of upgrades on the network as a whole. Ofcom, as usual, are after headlines (look they got them) but will probably make things worse rather than better.

I've been saying it for years, but Openreach should be an entirely separate company not part of the BT group. It would always have made sense to keep that part of BT nationalized.

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Anonymous Coward

Did it really take them so long as realise that about BT? they have been dominant for decades. All of the competitors to BT have fallen by the wayside. Mercury and countless others.

While there is local loop unbundling it's not at every single exchange in the UK as it should be so you're often forced to sign up to their lousy service and the scam that is BT line rental.

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because...

It's not at every exchange in the country because other suppliers choose not to be there... BT have a liability to provision, other don't.

NOt always BT fault... I myself am on one of those exchanges where no other suppliers exist. It's the back of no where, and I'm grateful I even get BB!!

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>All of the competitors to BT have fallen by the wayside. Mercury and countless others.

That would be because they were crap. The LLU brigade still don't have the footprint that BT does. It's pretty obvious that there are some exchanges (about a third perhaps) where no-one but BT is prepared to go. They might be the devil incarnate but at least you can always get a service of some kind from BT.

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"It's pretty obvious that there are some exchanges (about a third perhaps) where no-one but BT is prepared to go. "

And why are they unprepared to go there? Lack of profit that's what. If companies want to set up as LLU providers Ofcom should place a simple condition upon them: Their charges should be the same for every customer, no matter what exchange they are on.

At the moment LLU providers advertise a nice low headline rate and then stick a huge markup of £15 or more on you the moment it turns out you're not on an exchange where they have their own kit and network connection. Yes I know that means they have to resell you a BT Wholesale package, but they should have to factor that into their overall pricing. BT wouldn't get away with charging you more because you were on a remote little exchange with very few customers so why should the LLU providers get away with doing what is basically the same thing?

OK so it's not going to happen overnight, but why don't those toothless twats at Ofcon put some sort of sliding scale in place over the next five years? So they have to bring in uniform pricing gradually to ease the shock on customers who's prices will inevitably go up.

And don't give me that crap about their being no room in the exchanges for any other kit. Our local rural exchange used to be crammed with hefty kit, but in the last few years much of it has been replaced with a handful of 19" racks. There's acres of space in there for other providers to stick their kit.

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For the record I don't disagree with anything you wrote. BT is forced to provide telephony services everywhere. They probably provide broadband at every exchange to protect the value in their local loop against the encroaching of mobiles. That third of exchanges is probably running at a loss.

But 'solving' it is tricky. It comes down to RoI and the basic fact that these are exchanges where the RoI is bad or even negative. That means they need the rest of the country to bail them out. And therein lies the rub - everyone already wants cheap as chips broadband so how are they prepared to go in helping out the final third?

Whatever way you slice it - people who already have a good connection will have to help pay for those who don't.

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"hey probably provide broadband at every exchange to protect the value in their local loop against the encroaching of mobiles"

That makes less than no sense. I live in a rural area and BT provide broadband on our exchange. OTOH we have absolutely no 3G coverage and even GPRS is weak. This is pretty much reflected across the whole of rural Britain. IOW there is no threat of mobile broadband affecting the market.

BT are not "forced to provide telephony services everywhere" in the way that you suggest. If it is impractical to provide any utility to a property then the utility companies do not have to provide it. If you build a remote property and ask BT to provide telephony you will be in for a nasty shock if you expect to pay the same installation cost as everybody else. Openreach will charge the cost of providing the connection, plus of course their profit margin. The last time I was billed for a single telegraph pole it was £950. Imagine paying for a mile or two of those.

The utilities are all the same. I know of some houses who actually get telephony and mains electricity (both dire), but don't even get mains water. It was easier and cheaper to use a bore hole than it was to pay for mains water installation. At least telephony and electricity could be run overhead. The civils involved in laying the water main would have cost a fortune.

The thing about the LLU providers is that they install kit in the exchange and either lay in a fibre or use radio. Obviously laying in a fibre to the exchange is not a ridiculous cost as the duct back upstream already exists. It's not as if they are having to build an exchange from scratch and run cable to properties. That stuff is already there.

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Am I missing something?

Feel free to point it out if I am, but why shouldn't BT charge what it wants for the FTTC BB?

Talk Talk moaning about BT trying to re-establish its 'monopoly' position of a few years back... it WAS a monopoly then... theres nothing at all to stop talk talk laying its own fibres is there?

Don't they all have access to the cabs etc now?

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Boffin

>Don't they all have access to the cabs etc now?

Not physically, no. They have virtual access through something called GEA but that's in the exchange. BT are the only ones allowed to send engineers to the cabinets and only BT is responsible for getting the data from cabinet to exchange. Ofcom discussed all that a couple of years ago but the LLU champions said they weren't interested in installing their own cabinets.

Kind of inevitable, really. Only BT has the resources to install that many cabs. It also helps that FTTC is prolonging the value of BT's local loop. No I think the LLU brigade will wait until FTTP and even then it'll probably be the same. The only thing that'll distinguish them is backhaul and transit provision..and cost of course.

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Anonymous Coward

Problem is the ducts etc

BT got their infrastructure at literally a bargain basement price, the pole network and the ducting is what is worth the cash to BT, the costs of laying new ducts alongside those BT got for a pittance would likely be astronomical, ergo BT has a massive advantage over every other company.

The infrastructure should have been fully spun off from BT into a not for profit company.

Said NFP would then have been able to impartially charge every telco for access to the duct and pole network, without conflicting interests (ergo the need to protect BT Wholesale and BT retail from competition to maintain the value of certain peoples share portfolios)

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Meh

When are people going to stop bleating on about how cheaply BT got their infrastructure? THAT WAS THIRTY BLOODY GODDAMN YEARS AGO and it was a pile of excrement.

Since then they have invested large sums of money building one of the most up to date fibre-based networks in the world. They have replaced crappy ageing mechanical switches with new digital switches. They have extended the local loop into all the new housing estates that have been built since the early 1980s and probably connected a lot more remote properties. They have probably replaced countless miles of failed cable, fallen poles and collapsed ducting. They have rolled out broadband to every exchange in the country and made it available to a greater %ge of the population than possibly any other country in the world.

What's left of the original network that they were 'gifted' (assuming you ignore the money that shareholders paid for it) is probably a small proportion of what BT now has. For damn sure what we've now got is worth a lot more and is a damn sight more fit for purpose.

But:Having had a rant at you I have to say that I agree with your suggestion. I've often suggested that floating Openreach as a completely independent company would be a good move. I'm not sure about NFP however. Rolling out network infrastructure isn't cheap or easy and I'm not sure that an NFP could ever get the kind of funding needed.

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>BT, for its part, has warned the City that its wholesale business was being hampered by too much regulatory meddling.

I for my part would like to warn anyone that cares that the entire telecoms industry is being hampered by too much Ofcom.

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Angel

Cable Unbundling

How much longer are Virgin going to be allowed to monopolise the cable infrastructure?

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Happy

Especially as they got the infrastructure at a pittance...

Especially as they got the infrastructure at a pittance...

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Not only did they get it at a pittance. Remember the initial cable infrastructure deployment was heavily subsidized by Joe Taxpayer.

The original plan I recall being bandied about back in the days of small regional suppliers was they the initial rollout would be heavily subsidized. Then the cable companies would roll out cable to a wider audience using the profits from the early customers to fund the expansion. Of course this might have worked with all those small regional companies bidding against each other for the new markets, but once it was down to just one company where was the incentive? There is none at all.

But then you have to ask why Virgin were allowed to buy it all up in the first place. And why, now there is a single company, why Virgin are not subject to the same rulings as BT.

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Stop

Yeah, good point. I think Ofcom should have stepped in (not often I suggest that, lol) and told BT and VM to work together. Force VM to provide a wholesale service in exchange for BT promising not to compete on broadband. The devil would be in the detail but the current situation seems daft - especially when VM can't even get market dominance in the areas that it does provide a service.

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Facepalm

>why Virgin are not subject to the same rulings as BT

Because they are so inept that don't even have market dominance in their own areas and have to be protected from competitors.

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Anonymous Coward

@AndrueC

"BT are the only ones allowed to send engineers to the cabinets and only BT is responsible for getting the data from cabinet to exchange."

Maybe.

Please refer to "sub loop unbundling", where the BT competitor (usually an ISP) typically parks their own cab adjacent to a BT cab some distance from the exchange, and the handover between BT Openreach and the ISP occurs between the two cabs rather than in the exchange. The ISP then has to get their data from the cabinet to their core network, but that's another story.

Advantage: higher speeds due to shorter cables between DSLAM (or equivalent) and end user.

Current live example: Rutland Telecom in Lyddington (not to be confused with Rutland Weekend Television).

Ancient example: some brave outfit in Gloucestershire tried to provision a voice offering using SLU several years ago (I forget the details).

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Happy

You're right that sub-loop unbundling is available but those are very much corner cases. They occur when BT has declined to do anything at all and a small supplier comes in and installs FTTC. They are somewhat contentious because customers have no choice of supplier - that's the only way the money probably makes sense. That will never happen on a large scale because Ofcom doesn't like monopolies and as soon as you open up such developments to wholesale markets the figures fall apart.

The LLUOs made it very clear that no-one is going to do that in an area where BT is already (or likely to) roll out FTTC. Since LLUOs don't go anywhere that FTTC isn't likely to appear it is true to say that LLU is reliant on BT cabinets.

So yes, it is possible to install your own cabinet but outside of a few niche areas no-one is going to bother. Probably wise given that FTTC is presumably only a stop-gap for fibre.

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Anonymous Coward

Pity the energy company regulators have not got any balls to do the same about the price of electric and gas.

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Anonymous Coward

I'm against splitting the infrastructure from the customer-facing side

An extra layer of middlemen with no power to make significant change? Twenty brands of polish, always the same turd?

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rip off

I gave BT the elbow almost two years ago and never looked back,why pay £52 per

quarter including vat for line rental,what good is a fixed line nowadays when I want to speak to someone I don't bother ringing fixed lines if know

the person I am ringing has a mobile. It cost me a straight 4P PER MIN with no line rental and all that rubbish.

Did you know the first minute when you ring from fixed line cost 23P,this is how it pans out.

11.2 connection fee+6.9p per minute+your line rental spread out across your calls,so a three minute call cost you ,11.2+6.9+6.9+6.9+vat+line rental fee=around £40p+a proportion of your line rental,and if you pay by paper bill you have ad a portion of the £4.75 to this.

They all charge line rental and connection fee,it's their way of stealing from you because your British and you will put up with what ever they throw at you,that’s why all the foreign company’s

come here,they can't get away with this kind of rip off behaviour in their own country's.

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Anonymous Coward

"They all charge line rental and connection fee"

Not to the same extent.

If you tell BT you're looking at leaving, you'll get a discount. Don't go for a complete calls bundle though, have a look at some of the Finarea packages (eg 1899). 5p a call for up to an hour, with line rental and a minimal package being what BT get.

Maybe one day BT will work it out.

Maybe one day Ofcom will work out that BT are using Plusnet as a scam to make sure that BT Retail are the default supplier of overpriced and poorly supported broadband to the naive and ill-informed,and at the opposite end of the price range are using Plusnet 's bargain-basement pricing to ensure others have a hard time in that end of the market.

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FAIL

Terrible lack of investment

Sadly no doubt this will give them even more excuse to not invest in their network. The lines around here are always breaking and all they do is patch them up. Last year Openreach were up the pole outside our house fixing our neighbours line. Just as they were packing away and about to leave I realised they'd cut our line in the process of repairing our neighbours. I ran outside and the engineer seriously suggested i call customer service to report it so they could send an engineer out even though the line had been working when he arrived!

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A couple of years ago we had a line fault. BT were not willing to accept there was a fault, even when they couldn't actually call the line. I asked them to send out a PTO to check the line, which threw them for a while as the woman on the phone had never heard of a PTO. Anyway the PTO found the fault and marked out the fault point with yellow paint on the street.

He also issued strict instructions to the engineers to repair the fault, not to replace the connection with one to a nearby pole. The reason he gave for this was that we had a direct line to the exchange. Some neighbours with connections via the pole were only getting about 3-4Mb/s broadband in comparison to our 8Mb/s. He said the run via the pole was much longer and the cabling was crap in places. He reckoned that our cable had been laid in when the houses were built in the early seventies - shortly after the new exchange was built. The poles and their cabling predates the current exchange so while there would be new cable from the pole to our house the rest of the run is ancient and there's also a nasty link from a cabinet where the old exchange stood to the current exchange next door.

IOW some of the Openreach engineers do know what they are doing while some don't. The blokes working on repairs are just cable monkeys, the PTOs know the network.

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