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back to article BT slammed for FAILING to explain why its broadband investment has shrunk

BT's policy supremo was mauled this afternoon by MPs demanding to know why the telecom giant's investment in the UK's government-subsidised broadband deployment had dramatically shrunk. The company is the only telco to have won any of the taxpayer-funded Broadband Delivery UK (BDUK) contracts to roll out high-speed internet …

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Monopoly

Can we just move on from the 'if' or 'maybe' and just assume that any company that has an opportunity to exploit a monopoly will do so. Once identified, the first action should be to break the monopoly and not to wait for it to be exploited.

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Re: Monopoly

So BT and BSkyB walk hand-in-hand!

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Live in sticks

get worse services, it's not a new idea

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Meh

Re: Live in sticks

Give BT pots of cash, get worse services- it's not a new idea.

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Anonymous Coward

Re: Live in sticks

Privatise a natural monopoly (e,g, "last mile" voice + data services, ie Openreach), get worse services.

Give its parent company a free hand to knock out any upstarts who even think about competing. Yea, even unto the days of "Exchange Activate": pay us three years costs in advance (say £25k) and we might think about providing up to 30 lines of DSL for one ISP (no competition permitted) on the snotty little exchange where you live.

Give its parent company lots of taxpayer cash, wonder where it goes (hint: it's not wages for the workers).

It's really not a new idea.

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FAIL

Re: Live in sticks

If you think you are getting a worse service now from BT plc than you were from BT (GPO), then you probably weren't alive back then. I can think of no scarier prospect than BT being nationalised.

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Re: Live in sticks

I was alive back then, and I am getting worse service now. I can think of no scarier prospect than BT remaining a monopoly.

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Anonymous Coward

Re: Live in sticks

"I can think of no scarier prospect than BT being nationalised

Don't need/want to renationalise all of it, just the bits which are a natural monopoly, specifically the delivery of bits and voice over "the last mile". Same applies to gas electricity and water "last mile" distribution.

Split BT up. Then let BT Retail, BT Wholesale, BT Global Services die a natural death in the marketplace.

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Re: Live in sticks

Utter bullshit. You used to have to wait six months just to get a phone line back then, on which you could only use the piece of shit phone that you were required to rent from BT. You have no clue, or just do not remember.

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Anonymous Coward

"largest commercial holder" vs "largest commercial operator", anyone?

"Nicholas James - whose [employer] is the largest commercial holder of national radio spectrum in the UK - had told the panel of MPs that "there was no way we could join in the [BDUK] process because of the way the process was structured". He explained that part of the problem was the way in which the geographical areas had been carved up, arguing that it was harder to have a viable business case for investment in small pockets of the country."

Excuse me?

He says "largest commercial holder" because he can't say "largest commercial operator". UK Broadband (alias PCCW alias Now! Broadband) have SAT ON their fixed wireless licences since the auctions a decade or more ago, in which they bid for and won various regional licences. A couple of regions they didn't win in the auction, they bought in private in post-auction deals. Note: regions, auctions. They knew what they were bidding for, nobody forced them to bid. And now they whinge because they got nowhere in BDUK? Well it's a bit late now, it was clear right from the start that, for better or worse, BDUK was mostly between BT and Fujitsu, and once Fujitsu dropped out, who did that leave?

"geographical areas had been carved up, arguing that it was harder to have a viable business case for investment in small pockets of the country.""

YOUR EMPLOYERS HAD FIXED WIRELESS LICENCES FOR EVERY REGION IN THE UK (give or take a few dark corners). Care to tell the world what your employer is doing with them at the moment, or has done with them in the last decade?

Am I right in thinking you announced a 4G trial on Anglesey a few years back? Or am I confusing you with another ISP who promised a lot and delivered very very little?

You've had your chance, you've clearly missed it, quit whinging, hand the licences back, dissolve the company and go back wherever you came from. There were UK companies who genuinely wanted to make a serious attempt at wireless broadband with those regional licences. Your company's money stopped them getting that opportunity. Someone (maybe not you, if you weren't there at the time) should be hanging their head in shame.

I hate BT too, but when an alleged BT competitor screws it up for people who really do want to have a go at competing with BT, I have very little sympathy.

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Anonymous Coward

Not a monopoly

Any ISP who wants to lay fibre, be it to the cabinet or the premises, can. The difference is, companies like Sky and TalkTalk would rather some other massive business take the risks and sell the capacity at vanishingly thin margins instead of spending their own money.

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Re: Not a monopoly

Bloody hell! Do you work for BT? Vanishingly thin margins? That's probably why BT have only spent £365,000 of the 1B they were supposed to invest to match the 1.2B invested by the Government.

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Re: Not a monopoly

Anyone who wants to can lay it can they? In that case why the fuck aren't BT doing it?

I've been running on dodgy copper for a few years now - the conduits fill up with water when its misty and they wont fix the problem because they are waiting for someone else to give them a grant to put fibre in.

Now if the grant money was available to others I'd do it myself but it isn't and it isn't worth anyone trying to compete against a company that can get away with not even paying for its own infrastructure.

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Re: Not a monopoly

Most telco conduits in the access network are not watertight. It would be a waste of money and involve a huge amount of maintenance cost as tree roots, ground movement and so on would constantly cause leaks. It's the cable that is waterproofed, and provided the joints are made above ground, then the conduits could be filled to the top with water and it would have zero effect on the performance of copper loops.

Note that this is not true of all conduits of course - major ones near and between exchanges which require regular access may indeed be fully watertight, but for most of the network, it's the integrity of the cable that matters.

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Anonymous Coward

Re: Not a monopoly

"Any ISP who wants to lay fibre, be it to the cabinet or the premises, can."

The only people who think BT aren't a monopoly either work in BT HQ or in Ofcom.

Even since before Pipex invented mass market broadband over a decade ago (by taking a commercial gamble on BTwholesale pricing), BT have been quite happy to let other people do the demand creation. BT have even been quite happy for other companies, preferably little ones, to come along and set up a little broadband outfit

But if some brave outfit does set up a local broadband service, suddenly they might find an exchange which BT said was "not economically viable" for BT DSL finds itself getting DSL courtesy of BT. And the tiny little BT competitor ends up going out of business. What a coincidence.

Eventually even the big boys like Fujitsu realise that there's no point competing with BT. Not only do BT have the technical expertise (albeit probably not enough of it), they also have the commercial and political connections in Westmingster and around the country.

BT. Default provider of voice and data services to the naive and ill-informed.

Mind you, the less said about Sky and TalkTalk the better.

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Re: Not a monopoly

Not actually true. I can't be arsed to do the research but there are all sorts of regulatory barriers to laying stuff under roads and pavements.

Virgin Media, BT, Transco, whoever owns the water and gas pipes, that telco in Hull and thats pretty much it. There was a reason that the government sold cable franchises and it was because without one you couldn't do it.

So don't talk bollocks.

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Anonymous Coward

Re: Not a monopoly - don't talk bollocks

Oh dear Mark. Don't talk bollocks, you said.

"there are all sorts of regulatory barriers to laying stuff under roads and pavements."

Not really that many regulatory barriers, and they're not much of a barrier anyway. Any two bit outfit can apply for approval, refusal is unlikely.

"Virgin Media, BT, Transco, whoever owns the water and gas pipes, that telco in Hull and thats pretty much it."

You think so? Maybe you should have done that research?

There are MANY DOZENS of companies with what are called "code powers". The meaning of "code powers" is described at

http://stakeholders.ofcom.org.uk/telecoms/policy/electronic-comm-code/?a=0

which starts with

"The Electronic Communications Code ('the Code') enables electronic communications network providers to construct electronic communications networks. The Code enables these providers to construct infrastructure on public land (streets), to take rights over private land, either with the agreement with the landowner or applying to the County Court or the Sheriff in Scotland. It also conveys certain immunities from the Town and Country Planning legislation in the form of Permitted Development. " (continues)

That page also contains a link to a list of companies (laughably referred to as "persons") who have been granted these "code powers".

Whatever's stopping companies competing with BT in this market on a large scale, it *isn't* (in this instance) regulatory obstructiveness.

The first dozen or so names from Ofcon's alphabetically ordered list are below. By the time you get to the tenth or so name, it should be obvious who is talking bollocks, even after discounting multiple entries from related companies (e.g. three Arqivas), and entries from companies who aren't actively using their powers.

51º Limited

Airwave Solutions Limited

allpay Limited

Arqiva Communications Ltd

Arqiva Services Limited

Arqiva Limited

Anglian Water Services Ltd

AT&T Global Network Services (UK) B.V.

Atlas Communications NI Limited

Bournemouth & West Hampshire Water Plc

Bradford Cable Communications Limited

Bristol Water Plc

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Re: Not a monopoly - don't talk bollocks

> Not actually true. I can't be arsed to do the research but there are all sorts of regulatory barriers to laying stuff under roads and pavements.

The usual "regulatory" power is $$$. No company has successfully done any major underground cable laying on a national scale without going bust (effectively) in the process.

Cost of digging up roads => huge

Cost of setting up new exchanges and cabinets => huge

Margins => Low

Customer demand for broadband => mostly satisfied already unless you download a lot of porn, illegal music, etc. Willing to have if, but only at small incremental cost to existing solution.

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Re: So Not a monopoly

Many companies have "code powers" to trench in services and erect masts, cabinets etc. Vtesse have trenched fibre from Peterborough to Corby and passed within a mile of me in two directions as they build a fibre network for a bank. Rutland Telecom have a roadside cabin etc in Essendine, Rutland supplying fibre based broadband to a previous slow spot.

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Anonymous Coward

Re: Not a monopoly

"The only people who think BT aren't a monopoly either work in BT HQ or in Ofcom."

Convenient, since Sean Williams has worked for both. At Ofcom, he was in charge of deciding whether the BT monopoly should be broken up into separate companies (retail, wholesale and standalone infrastructure company) or separate divisions. We've come a long way when the revolving door doesn't even squeak.

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Re: Not a monopoly

"But if some brave outfit does set up a local broadband service, suddenly they might find an exchange which BT said was "not economically viable" for BT DSL finds itself getting DSL courtesy of BT. And the tiny little BT competitor ends up going out of business. What a coincidence."

Don't bother saying "Might" - it's happened multiple times already.

It does seem the fastest way to get BT broadband in "notspots" is to setup a sham company to sell local broadband, sign the locals onto it, then make a PR release and watch BT drop everything to get in there first.

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Anonymous Coward

Re: Not a monopoly

"the fastest way to get BT broadband in "notspots" is to setup a sham company to sell local broadband, sign the locals onto it, then make a PR release and watch BT drop everything to get in there first."

You should probably patent that.

I haven't seen anyone try the sham version yet, but I have seen some unlucky ones who tried it for real, only to be steamrollered by BT turning up. And, in the case of Penrhyndeudraeth (and quite possibly elsewhere), BT then found that their ancient infrastructure in the area was barely capable of delivering a useful DSL service.

Re-nationalise Openreach. You know it makes sense.

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Anonymous Coward

Re: Not a monopoly

"Vanishingly thin margins? That's probably why BT have only spent £365,000 of the 1B they were supposed to invest to match the 1.2B invested by the Government."

I don't understand your comment. Investment and margin aren't the same thing. Most people would say that an 8 year payback period for installing something means pretty slim margins. That slim margin would then tend to dissuade companies from installing those things unless they are pretty certain the money can be made back - else you go bust.

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Anonymous Coward

Re: Not a monopoly

"The only people who think BT aren't a monopoly either work in BT HQ or in Ofcom."

...or are one of the *third* of UK households who use Virgin's network. Or are one of the people who have a mobile phone - there's quite a lot of those around these days, none of them provided by BT.

There's lots of choice and telecoms services are amongst the cheapest in Europe, thanks to competition. The classic sign of a monopoly is high pricing and no choice. If you want to observe a monopoly, try buying your water supply from a company of your choosing.

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sisters

Well done Margaret Hodge, I watched the full hearing and she just kept coming back at them again and again but she still couldn't get answers. BT was shown up for what it really is. Let us hope she continues until its all as transparent as she wants it, and lets hope she doesn't let them class everyone as having 'superfast' unless they really do. Let us hope she can prise out of the councils the figures for the areas not covered, as I think they will be vast.

Let us hope that no more public money is wasted in this way, and government now channels it into altnets who can deliver more bang for our buck and help the people who are desperate for connectivity instead of just making a few who can already get a service go a bit faster.

Cabinets and copper are so yesterday, I know they will extend the monopoly for another decade so you can't blame BT, but what politicians can do is expose the truth. It isn't fibre broadband unless its fibre to the home. Our dial up comes from a fibre exchange... so does your fttc. a few more metres more of fibre feed doesn't make a lot of difference, its still coming through a victorian phone line to you. Ofcom should sort it.

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no body needs BT when you have 3g on tmobile at 8mbs for £5 for 30 days

theres no reason to read BT kunk mail just to give them another £30 a month

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country folk spend all their time in the pub singing with their folk band or stay home reading and probably need no more bandwidth

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"no body needs BT when you have 3g on tmobile at 8mbs for £5 for 30 days"

Try gaming with that latency and we'll see how far you get. :)

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Anonymous Coward

@Oliver Mayes

Latency is improving. pingtest.net gives my home adsl is a pretty steady 30ms, my Three mifi a fairly consistent 65-70ms and a similarly stable 45-50ms for my girlfriends EE4g mifi, although both mifis can get pretty ugly from time to time. Not spectacular, but usable.

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Hmm

So, BT gave a vague declaration that they'd provide £1bn. Did they specifically say 'towards cap-ex'? If not, they did exactly as they say.

What did the government expect? Of course BT are going to take the mickey.

I live in a town with 15k people in it, yet most of us are lucky if we get 8Mbps ADSL. But even our subsidised roll-out hasn't put us down as a priority - its doing half a dozen tiny villages first...

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I don't recall anyone ever saying they were going to provide 100% coverage of 2M broadband, let alone superfast. The UK Broadband wireless "licence holder" guy made that up, interesting negotiating / spoiling tactic. Labour's election manifesto talked of 90% coverage, to put one time marker in the ground.

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Margin squeeze or higher price ?

Dido Harding of Talk Talk wants to make superfast broadband more expensive. She charges a £10 premium for it when others charge much less (BT / EE / Plusnet to name but three). BT Openreach charge her about £7.50 for superfast on top of the copper line rental she already pays.

She already makes a decent margin on ordinary broadband, but rather than maintaining that is seeking to increase it. See http://goo.gl/SVUzM

BT may be doing a bit of loss leading and sharp pricing, but Harding's Talk Talk and Sky have the biggest margins on FTTC superfast broadband by a country mile.

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Anonymous Coward

Re: Margin squeeze or higher price ?

(BT / EE / Plusnet to name but three).

Careful with your arithmetic, Phil - though I agree with the general point.

I make that two vendors, maybe a bit less, being as Plusnet are BT Sheffield.

Plusnet are a convenient regulator-dodging arm of Big BT. If Big BT want to do something the regulator wouldn't be too keen on (e.g. suppose BT want a low cost option, which purely coincidentally would make it difficult for potential competitors to profitably enter a particular market), BT Retail aren't allowed to do it but apparently BT Sheffield can?

EE's not all that clear cut either, given their close relationship with BT (Orange's DSL network was handed over to BTwholesale).

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Re: Margin squeeze or higher price ?

PhilT, your margin squeeze spreadsheet would benefit from references to the sources of information.

Also the spreadsheet seems to show that it is Sky and not TalkTalk who are charging a premium and making the largest profit on superfast broadband.

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On past form

The gov should wait till BT has built its monopoly with our money, nationalise it, pay BT loads of our money in compensation, then flog off the newly nationalised network at a huge loss, to be bought back by BT for a pittance. Somewhat long-winded process but a very efficient way of funnelling tax-payers' money into private hand.

Cheers, old boy. Non-execs all round.

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Re: On past form

The one aspect of the BDUK project that is a little odd is that it didn't require the ownership of the entire infrastructure created by the project to be jointly owned by the community and the contracted provider/partner. This would of given the community greater say and control of how that infrastructure was developed, a slice of the revenue to re-invest in the local infrastructure and would permit delivery of broadband to the "final 10%" at significantly lower cost as these services would be able to more easily piggy back on to the infrastructure (and back office functions) deployed under BDUK.

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Re: On past form

The way things work now, sadly, community ownership is the odd option. A Big Society needs 'big telecom', it seems

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Not tough enough

'The chairwoman asked: "Where's that billion pounds?"'

She ought to have held him upside down and shaken him for a while.

Seriously folks. "Have you been abusing your monopoly to line your pockets?" No, that could never happen.

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It's not BT's fault, but the fault of the officials who allowed themselves to be lobbied...

“It's not BT's fault, but the fault of the officials who allowed themselves to be lobbied by BT”

There, I fixed it for you…

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Joke

Margaret Hodge is Amazing

She's so fierce and in our corner now she no longer has any hand in running the show.

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Re: Margaret Hodge is Amazing

Yes, Tom 38, now she hasn't got the support of anyone who matters, it's time to court the proles.

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Anonymous Coward

Sod it, if the govt are that intent on monitoring us then they may as well go the whole hog, lay fibre to every home and provide it free and charge businesses a reasonable amount to cover the maintenance and upgrade costs and then pull in money for renting access to telcos to the backbone (offer to buy back BT or make it irrelevant). We'd cry at the initial expenditure but then enjoy watching the telcos put money back in for renting access. If I'm going to be held to ransom over my internet connection it may as well be for free from my own govt than some faceless dweeb with a bottom line to protect. I for one welcome our new, 1Gps-providing overlords.

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