back to article Forced sale of Openreach division would put BT broadband investment at risk, says CEO

BT's plans to develop improved broadband infrastructure would be put at risk if Ofcom decided to force it to sell off its Openreach division, the company's chief executive has said. Gavin Patterson said that it "would be difficult to convince the board of BT to invest" in broadband infrastructure improvements if the regulator …

  1. hplasm
    Meh

    Well-

    they would say that, wouldn't they?

  2. Anonymous Coward
    Anonymous Coward

    If the board of BT plc won't invest in a demerged Openreach....

    ...there's plenty of other companies and financial investors who would be delighted. The successful private ownership under regulation, of water and sewerage networks, gas and electricity grids shows that the required results can be delivered, with both adequate returns for private investors, and adequate delivery of legal and social needs. I'd happily agree there's been some mess ups, but overall the system works very well.

    So maybe that's the problem. Not that a demerged and full regulated fixed line broadband and voice network can't operate successfully. But that, by their own CEO's admission, BT plc are the wrong owners.

    That's fine by me. A simple demerger that separates the equity of Openreach from BT would leave investors with exactly the same assets they currently own, but under separate management. If any investors don't want to own a regulated monopoly, then they can sell their shares in Openreach plc, but the fatcat roadblock that is the board of BT plc get completely bypassed.

    Make it so, number 1!

    1. Vimes

      Re: If the board of BT plc won't invest in a demerged Openreach....

      The successful private ownership under regulation, of water and sewerage networks, gas and electricity grids shows that the required results can be delivered

      Are they really such desirable results though?

      <Glances at the bills that always seem to go up, even when the prices of gas and electricity go down>

      That's not to say that this isn't the right thing to do, I'm just not so sure using the gas and electricity providers as an example is really such a good idea.

      1. Anonymous Coward
        Anonymous Coward

        Re: If the board of BT plc won't invest in a demerged Openreach....

        "Are they really such desirable results though? <Glances at the bills that always seem to go up, even when the prices of gas and electricity go down>"

        You'll need to speak to Red & Dead Ed about that example. With the mere threat or a price freeze, the energy companies had to lock in long term contracts to avoid being bankrupted if wholesale prices move upwards during the period of a price freeze. You can argue that they wouldn't go up (predicting wholesale markets is a mugs game, mind you), but the global price is set in dollars, so the companies were hedging both wholesale prices and exchange rate risk (with a Labour government the likelihood would be that sterling would fall and thus increase prices on all imports).

        So the root cause of retail energy prices not falling as wholesale prices do is traditional socialist interference in markets, even if that were prospective interference. The other driver of prices not falling is simply that years of NuLab, Condem, and EU inspired interference mean that the wholesale price of energy is an ever declining proportion of your bill, as the various explicit and hidden subsidies escalate. So, for example, coal fired generation is cheap as chips, and has a very low wholesale price. But suppliers are legally obligated to buy ever increasing proportions of expensive "renewable" power, and in response to EU diktats, some 12 GW of thermal generating capacity will have closed by the end of this year. Coal could be free, and the wholesale price of coal fired generation would fall, but we'd still struggle to see any impact on UK retail energy prices.

    2. Anonymous Coward
      Anonymous Coward

      Re: If the board of BT plc won't invest in a demerged Openreach....

      A BT insider once told me that many people in BT still believe that it's the 1970s where BT is a state-owned monopoly where procedure and red-tape ruled and profits weren't a concern.

      1. Anonymous Coward
        Anonymous Coward

        Re: If the board of BT plc won't invest in a demerged Openreach....

        I'd suggest your insider doesn't really know anything at all then.

    3. Anonymous Coward
      Anonymous Coward

      Re: If the board of BT plc won't invest in a demerged Openreach....

      Perhaps the answer is to divest the board of BT - perhaps to be put in charge of supplying coal to the Falkland Islands, which it is difficult to screw up - and replace them with one that has clues?

      1. Trigonoceps occipitalis

        Re: If the board of BT plc won't invest in a demerged Openreach....

        They use Peat.

    4. A Non e-mouse Silver badge

      Re: If the board of BT plc won't invest in a demerged Openreach....

      I think a de-merged Openreach would be fantastic. The only question I'd have is: How would you prevent the company sweating the existing assets and not investing any money? Make it a non-profit? Put a cap on the profits they can make?

    5. AndrueC Silver badge
      Unhappy

      Re: If the board of BT plc won't invest in a demerged Openreach....

      ...there's plenty of other companies and financial investors who would be delighted.

      I'm not so sure about that. The RoI on network expansion is generally poor and requires long-term thinking. How many investors do you think there are that would be willing to invest several billion pounds then wait a decade before they saw profit?

      One of the problems BT faces at the moment is access equivalance. If this still applied to BTor after it was spun off (and it would probably have to) then you have another problem with investment. You're building an expensive network then letting other companies reap most of the profits from it.

      For another example of how hard it is to get investment and make a profit look at VM. It only recently re-started network investment as the result of a take-over.

      It's very hard to make money from the provision of internet services and I'm not convinced that investors would flock to the opportunity. Not under Openreach's current conditions. Which is a shame. An independent Openreach might mean end-users will be able to talk to them. That could bring an end to the current chinese whispers situation we have with fault reporting.

      1. Roland6 Silver badge

        Re: If the board of BT plc won't invest in a demerged Openreach....

        >For another example of how hard it is to get investment and make a profit look at VM.

        If memory serves me correctly Richard Branson sold VM the year it declared it's first profit...

    6. Lamont Cranston

      Re: If the board of BT plc won't invest in a demerged Openreach....

      I can't say that the situation would be better under public ownership, but the UK's water network is crap: 22% loss through leaks, according to this.

      1. Anonymous Coward
        Anonymous Coward

        Re: If the board @Lamont Cranston

        "I can't say that the situation would be better under public ownership, but the UK's water network is crap"

        It was most certainly worse under public ownership. I worked for a water company at privatisation, and we spent billions on better quality water treatment, new pipes, water resources etc. And that was because decades of public ownership had seen inefficient working practices preserved and embedded, whilst the capital investment was whittled away by politicians of all shades so that they could pay for bread and circuses, happily ignoring the performance standards and water quality.

        The reason that 22% of water is lost is because the single most significant determinant of leakage is the age of pipes. It's technically easy to replace the pipes, but the average cost is probably £200 per metre of pipe, with a range from £50 up to £10,000, depending on pipe size and where it is. Burst pipes are sometimes easy to spot and fix, but if you're replacing entire lengths of network because of pinhole leaks and loose joints, then the costs are astronomical to save relatively small volumes of water. The industry would be delighted for the regulator to allow them to do this, but you wouldn't be, because your bills would go up. In drastically simplified terms, if your water company wanted to increase the amount of water main replaced each year by 2% of its total stock, then it'd add 20% to your bill, for no saving in operating costs. How does a 20% price increase grab you?

        1. Lamont Cranston
          Unhappy

          Re: If the board @Lamont Cranston

          Sooo, private and public ownership are equally shite? Yay!

    7. Oddius

      Re: If the board of BT plc won't invest in a demerged Openreach....

      Successful you must be joking, utilities now almost foreign owned.

      Huge tax payers subsidies to encourage them to invest in new infrastructure which ultimately we end up paying for in our bills, where is that a success?

      1. Anonymous Coward
        Anonymous Coward

        Re: If the board of BT plc @ Odius

        utilities now almost foreign owned....Huge tax payers subsidies to encourage them to invest in new infrastructure which ultimately we end up paying for in our bills, where is that a success?

        What subsidies? They get capital allowances that they can offset against profits like any other company. And the profits are limited to whatever the regulator of the day thinks is acceptable. The interesting thing is that those evil foreign investors are willing to buy the assets and invest in enhancements for returns that UK stock market owned companies won't hang around for.

        The logical conclusion is that UK investors are evil profiteers who won't invest in UK infrastructure, whereas foreign investors are willing to invest to keep your lights on.

  3. Alan Brown Silver badge

    Seen this before

    Telecom New Zealand advanced the same arguments to try and prevent its lines section being excised.

    Those arguments turned out to be completely incorrect.

    Why is this relevant?

    TNZ split out its lines section in the same way as Openreach (BT-style) to try and preempt the NZ govt taking action against it and was lobbying for a formal BT-like solution. After studying the UK and noting the market abuse(*) which had been occurring under the BT/Openreach model, it was recommended that the lines section be completely broken off into its own company. This was made a condition of continued broadband rollout funding and the companies diverged 4 years ago.

    https://br0kent3l3ph0n3.wordpress.com/2012/03/21/superslow-broadband-comes-to-surrey/

    The effect on the NZ market has been electrifying to say the least. The lines market has gone wild. The newly liberated lines company is profitable _and_ responsive, defying all the doom and gloom predictions that the parent telco had been making to try and deflect the sell off (in fact it's the parent telco which is having trouble). Chorus NZ now actively seeks out customers instead of being a hard-to-deal with outfit and not only sells lines access but also dark fibre and duct space - something that TNZ had previously utterly refused to do (and which BT utterly refuses to do in most areas of the UK outside of a few high-competition areas).

    If this can happen in a country with 1/20 the population and 1/100 the population density of the UK then it's a good indicator that splitting Openreach into its own operation is probably a good thing.

    (*) Despite LLU and lines competition in high population density areas, Openreach is a de-facto monopoly across most parts of the UK and the charging structure heavily disadvantages non-BT suppliers using Openreach lines or fibre (as an example where I work, the BT part of our lines and fibre charges would halve if there was an alternative supplier onsite. This is market abuse at its finest, showing that they're charging what they do _because they can_ and for no other reason. On top of that Openreach has been used as an anticompetitive tool in the home broadband market(**). Areas have been declared as non-economic to service resulting in alternative suppliers attempting to set up, only to have Openreach declare the areas are economic after all and BT then swooping in with heavy doorstep marketing campaigns to lock customers into contracts, followed by them dragging their heels on actually installing their services (meantime the competitors go out of business....(***))

    (**) Openreach may have "chinese walls" between itself and BT Wholesale/retail, however the head office oversees the lot and coordinates such behaviour even if the divisions themselves are notionally unaware of the anticompetitive activity.

    (***) http://www.getsurrey.co.uk/news/local-news/villagers-chip-broadband-connection-4827646

    (Note the fact that BT was trying to charge £2000/metre instead of £200/metre in this story)

    https://br0kent3l3ph0n3.wordpress.com/2012/01/04/how-bt-strangled-ewhursts-fttp-project-in-red-tape/

    https://br0kent3l3ph0n3.wordpress.com/2012/03/21/superslow-broadband-comes-to-surrey/

    http://projects.ruralbroadband.com/project/143

    1. Anonymous Coward
      Anonymous Coward

      Re: Seen this before

      Another good example is B4RN (b4rn.org.uk). They got fed up with BT's unwillingness to connect isolated farms and small rural communities on commercial grounds, even with BDUK funding.

      The Openreach model had the per-property connection costs at something like 8K to 24K. B4RN are currently running at less than £750 per property (averaged over more than 3000 connections), are giving a 1Gbps up/down unlimited fiber service (higher speeds available on demand) for £30 a month and are making money.

      Sure they're a community-owned not-for-profit (which is a major contributor to its success), but it just shows what can be done if "the old ways" are rejected.

      1. AndrueC Silver badge
        Happy

        Re: Seen this before

        Sure they're a community-owned not-for-profit (which is a major contributor to its success), but it just shows what can be done if "the old ways" are rejected.

        Indeed it does and B4RN have done a good job. But there are a couple of points worth making:

        B4RN work with landowners to get their cables across their land. If said landowner needs the service and/or is mindful of his neighbour's needs they will be receptive and may allow trenches to be dug for nothing. They may even lend the use of equipment or even help dig the trench. That model won't work outside of a few small desperate areas. Anywhere else and you have to negotiate wayleaves which can be very expensive and complicated. That's assuming you have open land to cross. In most places you're talking about digging up public roads.

        It's also worth noting that customers on those networks have no choice over which ISP they use because B4RN don't offer a wholesale service. If they had to offer a wholesale service or something like BT's GEA their profitability would take a serious hit.

        1. Anonymous Coward
          Anonymous Coward

          No wholesale

          However, B4RN aren't acting as what most would call an ISP - they provide connectivity only, no hosting, mail, phone etc.

          They did consider using BT to provide their main trunk, but went with dark fiber when it came in at 25% of the price for 160 times the bandwidth.

          1. chris 17 Silver badge

            Re: No wholesale

            do you know what dark fibre is?

        2. Alan Brown Silver badge

          Re: Seen this before

          "Anywhere else and you have to negotiate wayleaves which can be very expensive and complicated."

          We've just had to deal with wayleaves so BT could dig up 50 metres of lawn to run fibre to a new building on our campus.

          This is all on company-owned property. It's taken 2 months, being charged at over £50/metre PLUS fees for the wayleave. If we'd dug the trench the costs would have been higher.

          Then to cap it off, the BTOR duct installers have refused to follow the path set by BTOR's planning engineers, citing H&S as reason for not running along the side of a building. The fact that they can't even effectively communicate INSIDE the company is a good indication of BT's dysfunctionality and is adding another few weeks to the installation time (there are planning permission implications for variations on what's been signed off as the buildings are in an AONB area).

  4. Anonymous Coward
    Anonymous Coward

    Excellent

    As with anything in buisiness if there is money to be made someone else will step in. Presently they cannot because the market conditions "will be adjusted" to ensure that they cannot make money off it.

    There is a very long record of this happening going all the way back to Ionica. Rural broadband, Broadband in existing TPON deployments (Milton Keynes, Cambourne, etc), you name it. Every single time the monopoly position was threatened in one way or another something magical happened overnight and the tecnically impossible became a reality with Openreach taking an obvious locally loss making position to provide BT retail with profit.

    Frankly, this is the most fantastic argument _IN_ _FAVOUR_ of Openreach sell off I have ever heard.

  5. Anonymous Coward
    Anonymous Coward

    Doesn't make sense

    Why would the New Openreach board be less willing to invest in broadband infrastructure than the current BT board is? That only makes sense if the current arrangement enables BT to make profits from being able to "manage" the relationship (and pricing) between its two halves, and those profits would vanish if it had to deal with New Openreach on the same basis as its competitors. Ofcom should regard those comments as good reason to act like a real regulator, get out the anal probe and start exploring.

    1. Blitheringeejit
      FAIL

      Re: Doesn't make sense

      >> Why would the New Openreach board be less willing to invest in broadband infrastructure than the current BT board is

      Because the current BT board has decided that it's sexier and more profitable to be a pay-per-view content provider than a connectivity company. They answer a question about Openreach with a comment about their sport TV revenues, carefully avoiding any mention of their well-documented failure to deliver their promises on (taxpayer-subsidised) rural broadband rollout. (And please note that in my case, "rural" means "less than a mile outside the boundaries of a unitary authority" - we're not just talking about remote Scottish islands here.)

      Given that the money's coming out of the taxpayer's pocket anyway, I'd rather we nationalised Openreach than just forced BT to sell it to some other capitalist bastard. I realise that talk of nationalisation is pissing into the current political wind, but stop and think for a moment - how much cheaper would it be for the government to intercept all our communications if the government already owned the communications infrastructure! Think how many more nurses/tridents/ministerial Jags (delete according to your political leanings) we could buy with the money we'd save!

    2. Alan Brown Silver badge

      Re: Doesn't make sense

      "That only makes sense if the current arrangement enables BT to make profits from being able to "manage" the relationship (and pricing) between its two halves, and those profits would vanish if it had to deal with New Openreach on the same basis as its competitors."

      That is exactly what's happening in New Zealand. The old Telecom NZ (now trading as "Spark") is complaining loudly that it no longer has preferential pricing from its old Lines company ("Chorus").

      Line fees are currently set by regulation. Those regulated fees are based on TNZ's past submissions (pre-company split) on how much it cost to provide lineside services. TNZ is crying that the fees are too high (they're lower than that TNZ used to claim lines cost to run) and they can't make a profit.

      Oh dear. How sad.... Everyone else seems to be coping.

  6. msknight

    I need to borrow a microscope...

    ...to find my violin.

  7. Anonymous Coward
    Anonymous Coward

    Bullshit Telecom !

    1. Alan Brown Silver badge

      Brutish Telecon.

  8. Julian Bond

    Et Tu, Virgin

    It's always puzzled me that the UK cable industry (sorry, Virgin) was built on the back of public money and subsidies but is allowed to run a monopoly. Where's Virgin's wholesale bandwidth and LLU requirements?

    I'm sure there's a perfectly plausible answer and I'm just uninformed.

    1. hplasm
      Thumb Down

      Re: Et Tu, Virgin

      That's because it was built by many small private companies, most of which went under and were bought out.

      1. AndrueC Silver badge
        Meh

        Re: Et Tu, Virgin

        That's because it was built by many small private companies, most of which went under and were bought out.

        It's also because VM haven't achieved market dominance even within their own footprint. Consequently Ofcom don't demand that they provide access equivalence. I've never had personal experience of their service so I don't know why VM have not been able to dominate in the areas that they serve.

        Therefore they can do what they want with it, within the terms of the licence they have from OFCOM.

        But that is subject to review. Ofcom did review it a couple of years ago and decided in effect that VM still wasn't successful enough to warrant being forced to open up their network.

        1. Anonymous Coward
          Anonymous Coward

          Re: Et Tu, Virgin

          "I've never had personal experience of their service so I don't know why VM have not been able to dominate in the areas that they serve."

          The same reason people don't desert crappy accountants and crappy banks; fear of change.

    2. rhydian

      Re: Et Tu, Virgin

      The Virgin network was built, as said above, by private firms using private investment (no public money IIRC). Therefore they can do what they want with it, within the terms of the licence they have from OFCOM.

  9. Anonymous Coward
    Anonymous Coward

    Rural Britain Wake Up!

    Rural Britain wake Up!

    To keep using their copper infrastructure, BT choose FTTC, as the solution to Britain's broadband needs, because it suited BT/BTOpenreach not Britain, and it certainly doesn't suit Wales.

    With a FTTC solution, you'd need to 'carpet bomb' a new FTTC Roadside Cab every 2(km2) to cover the UK. Otherwise Not Spots are still Not Spots. That's a lot of FTTC cabinets, to give you an upto 80Mbps (not that fast either) to every part of the UK. Yes, there is G-fast, no - its not a solution here.

    Speed, like ADSL, is dependant on copper line quality/length. The land area of UK is 243,610 (km2). OK, not all of it populated, but generally most areas have a end node, there somewhere.

    Thats over 100,000 FTTC cabinets are around £15,000 each, a lot more than the current 5600 exchanges.

    Putting a piece of complex technology in between the premises and the telephone exchange in damp, windy, rural areas (Wales/telegraph poles in particular-FTTrN) isn't going to last either. (FTTrN also requires the same expensive Power requirements as a full size cab, at present)

    Expensive FTTC Cabinets with 120/240 nodes were/are fundamentally the wrong type of infrastructure to use to deliver Broadband to small rural Hamlets, sparsely populated houses/areas. It works for the Cities/Market towns, but only to the main town itself.

    A little known detail in the Superfast Cymru Project, is in order to meet longer line lengths (premises over 1km from the roadside cab) delivery thresholds, BTOpenreach are been subsidised, to rip out 0.5mm copper/aluminium lines.

    What are BT spending vast amounts of time of effort replacing them with on this Superfast 'Fibre' project? Some Future proofing technology? FTTP? No..Copper in nearly all cases.

    BT are upgrading existing 0.5mm copper, replacing with 0.9mm copper lines, to be more precise.

    Future proofing things for at least er...3-5 years, until the next massive handout. Not Spots remain Not spots, or spots that 'just' meet the current artificial 'superfast' target. It wasn't long ago, that a minimum of 2Mbps was the target.

    The devil is in the detail. Its hardly upgrading, its infrastucture planning designed to 'just' meet the contract targets, not Britain's future needs. This is what happens when BT own the local loop.

    Please Sir, can I have some more...(subsidy handouts) forever more.

    1. AndrueC Silver badge

      Re: Rural Britain Wake Up!

      Most of what you wrote is essentially correct. BT are upgrading what they have rather than rebuilding it from scratch. But the alternative would have been a much, much smaller roll-out. Or one that was nowhere near completion yet.

      If we look at the figures from the B4RN posting we see that a small, efficient, company is managing to roll out fibre to cooperating rural communities for £750 per property. Assuming that scaled out to the entire country that would be over £18 billion to cover every home (BBC says there are 25 million houses in the UK) and a bit more for business premises. The problem is that B4RN's process won't scale out. In the other 95% of the country you have to pay landowners rent for trenches. You're not going to have teams of willing volunteers - you have to pay companies to perform the ground works.

      FTTC is/was a sensible compromise. It was affordable. The next step will be G.FAST and a reinstatement of FTTPoD so we are moving toward a full fibre future.

      Are we moving fast enough? Actually I think so. Take-up of superfast services shows that there really isn't huge demand for true FTTP speeds at the moment.

      Is it good enough? Depends where you live. The truth is that economics hurt. At least BT can raise money from the private sector. If the network was government owned it'd either come from taxes (at an inflated cost) or just wouldn't come at all (which was why the old PO network got into the state it did). If you live in a BDUK area then the economics have spoken. No-one can ignore that.

      Is it cost efficient..probably not but at least some of what they've done for FTTC will be a useful launch pad for FTTP (which is why they can offer FTTPoD) so it's not all wasted money.

      The only thing that bothers me about BT's strategy is the cost of FTTPoD. I'd love to know how they came up with those figures. It smacked very much of an attempt to show willing whilst also trying to put people off.

      1. Alan Brown Silver badge

        Re: Rural Britain Wake Up!

        "Take-up of superfast services shows that there really isn't huge demand for true FTTP speeds at the moment."

        Or that there's consumer resistance to the higher prices.

        It's a royal mess anyway. FTTC providing VDSL2 services compromises and is compromised by cooper pairs going back to the exchange carrying voice and ADSL2.

        There was no technical reason why the FTTC cabinets couldn't be full concentrators/DSLAMs. The rollout was done this way to make it as hard as possible for anyone else to compete with BT.

        1. AndrueC Silver badge
          Meh

          Re: Rural Britain Wake Up!

          Or that there's consumer resistance to the higher prices.

          Isn't that the same thing though? If people want something they pay for it. They aren't paying for it so they don't want it. No doubt if there was no extra cost a lot more people would switch, but if there was no extra charge the entire roll-out would never happen.

          There was no technical reason why the FTTC cabinets couldn't be full concentrators/DSLAMs

          Could you expand on that please? An FTTC cabinet is a concentrator and DSLAM. Or are you suggesting that they should also support older versions of DSL?

          I don't dispute that it's all a bit messy. All I'm suggesting is that incrementally upgrading the local loop is a sensible compromise. If BT had gone for an entirely FTTP roll-out I very much doubt we'd be in the current situation of over 95% of people having access to double digit speeds. Instead I think we'd have a few areas with triple digit speeds (that most of them have no real need for) and a lot of people still stuck on single digit speeds struggling to juggle bandwidth amongst family members.

          It'd probably also have significantly increased the requirements for BDUK. Areas that struggle to raise a valid economic justification for FTTC would be up shit creek where FTTP is concerned. I would tentatively guess that the cost of a GPON concentrator is about the same as for an FTTC cabinet. But the big difference is that FTTP requires more groundworks. At the very least a microtrench from pavement to front door but it's also yet more underground ducting that needs cleaning or repairing. And if you're fed by overhead cable just how many more cables can a pole take?

          I'm sure we've all been in situations where ripping out the old system and replacing it with a new one was the preferred solution. Unfortunately in the real world that's rarely viable. Most of the time incremental change is the only affordable and practical solution.

          1. Alan Brown Silver badge

            Re: Rural Britain Wake Up!

            >> There was no technical reason why the FTTC cabinets couldn't be full concentrators/DSLAMs

            >Could you expand on that please? An FTTC cabinet is a concentrator and DSLAM. Or are you suggesting that they should also support older versions of DSL?

            VOICE concentrator. DSL/VDSL DSLAM - ie, all fibre back to base, no copper, no stupidly long copper tails hanging off the arse end of the VDSL circuits.

  10. A Non e-mouse Silver badge

    New Builds

    For any new build installation (e.g. new housing estate) Openreach should be made to deploy FTTP. Let's at least make a start on this.

    1. Anonymous Coward
      Anonymous Coward

      Re: New Builds

      Having an 'artificial restriction - variable length/quality copper/aluminium lines' (think of it like a valve/tap) between the customer and BT's main infrastructure, allows BT to differentiate on pricing.

      Ofcom like it, because differential products give them something to regulate. Having a program to force all new installation/local loop network upgrading to only use Fibre (FTTP) as the replacement, is not in eithers (BT or Ofcom) interest, only the customers, and what do they matter.

    2. Anonymous Coward
      Anonymous Coward

      Re: New Builds

      Indeed. Penny pinching leads to lack of ambition. To put on my rose and sepia toned specs for a mo, the railways or canals wouldn't have been built at all with this half-arsed approach. IKB or Robert Stephenson would have wanted to FTTP to everyone's house and outside dunny, making sure that the infrastructure that's laid today, is still good in 50 years.

      1. Anonymous Coward
        Anonymous Coward

        Re: New Builds

        For rural areas the BARN model is showing that the true FTTP model can be both cheaper to install per node and it will be crucially cheaper to maintain and upgrade over the longer term, fundamentally there is less technology open to the elements, to go wrong.

        Above all, look at the speed benefits / 'future proofing' in comparision to FTTC. Do you even need a regulator anymore? That's what happens when you make 'independent' decisions where you don't have to think about preserving the Copper Asset values of your existing infrastructure.

        BT's problem (quite rightly for BT) was that you can generally only borrow to invest, based on the value of their current 'Copper' Asset Infrastructure.

        BT play that card everytime, Ofcom/Gov accept that card everytime, and that's why Notspots are still Notspots. For rural areas, BT's need sidelining, its not working, every decision BT make is based on the virtual 'copper elephant' in the room.

        1. AndrueC Silver badge
          Meh

          Re: New Builds

          For rural areas the BARN model is showing that the true FTTP model can be both cheaper to install per node and it will be crucially cheaper to maintain and upgrade over the longer term, fundamentally there is less technology open to the elements, to go wrong.

          And as I pointed out in another post B4RN have two major advantages over BT:

          * They are working with the full and enthusiastic cooperation of the communities they are rolling out to. That can mean free labour, zero wayleave costs and even teams of volunteers doing the digging.

          * They don't wholesale their network. If you want to use the B4RN fibre then your ISP will be B4RN. Maybe it's a good ISP. Maybe it's a cheap ISP. But would you be happy to forgoe all choice and be forced to stick with just one ISP?

          Then you could pop round to all the home owners as they move in and explain to them why their homes cost a bit more because the developer had to comply with the national regulations you introduced.

          There have also been a couple of cases where fibre was installed exclusively and the new owners ended up stuck with an expensive and poorly performing connection. At least if you go with BT you can choose your ISP and that competition helps keep prices down and gives you some choice over the standard of service you get.

    3. Anonymous Coward
      Anonymous Coward

      Re: New Builds

      They should, but there are still new builds going up that are simply connected to the existing cabinets at the the edge of town which are already too far from the exchange to give a decent level of service.

    4. Bunbury
      Joke

      Re: New Builds

      So your plan is to force Wimpey, Redrow, etc to (a) go to one specific company for all the telecomms everywhere and (b) specify the technology used? Who decides the price? At present developers get bids in from suppliers against a specification and then decide what happens on the land that they at that point own..

      Perhaps while you're pushing that primary legislation through, you could specify the brick manufacturer (LBC?) and the dimensions (65mm) and type (Ironstone?) of brick.

      Then you could pop round to all the home owners as they move in and explain to them why their homes cost a bit more because the developer had to comply with the national regulations you introduced.

    5. SImon Hobson Bronze badge

      Re: New Builds

      Actually, I suspect you'll find that new developments are the best served - in terms of options.

      Assuming the developer actually gives a flying ****, then the whole estate will be covered by ducting (relatively cheap to install while the rest of the ground works are being done), and with ducting up to each property. For any deployment, it's that "last mile" that costs the most.

      So assuming there wasn't some penny pinching or stupidity, such new estates will be the easiest to provision. *All* OpenReach have to do is get the fibre to there - installation is then relatively cheap as all the ducting they need is already there, right up to each house.

      Of course, if OpenReach want to actually install any phone lines, they'll need to connect that new ducting to the existing network and pull new cable back to the exhange. There's no reason they couldn't pull in fibre as well, but I can't help thinking there's too much politics to allow that to happen.

      PS - I'm in agreement that BT's comments strongly suggest that the supposed "chinese wall" between BT and OpenReach isn't working as it's supposed to.

      1. Alan Brown Silver badge

        Re: New Builds

        "Assuming the developer actually gives a flying ****, then the whole estate will be covered by ducting "

        This is the kind of thing that can (should) be mandated, because all developers really care about is making as much money as possible for as little outlay as possible - even if that means putting 3/4 sized furniture into a show home to fool buyers.

  11. Kaltern

    "Sell Openreach and my huge bonuses and profits may stop, shrieks BT CEO"

    FTFY.

  12. Doctor Syntax Silver badge

    '"would be difficult to convince the board of BT to invest" in broadband infrastructure improvements if the regulator took such action'

    This is meaningless. It would be a decision for the spin-off's board, not BT's.

    1. Bunbury

      @ Doctor Syntax

      Eventually perhaps. But these corporate changes take a lot of time, during which there would perhaps be a risk of "investment blight"

      1. Doctor Syntax Silver badge

        @Bunbury

        I think you've missed the point here. The BT Chairman is speaking for the BT Board. In the event of a spin-off it would fall to the spin-off to roll out broadband. It's no business of his (literally!) as to what that board may do unless, of course, he expects to be its chairman as well. If the latter he's making a damn poor job application.

        1. Alan Brown Silver badge

          "It's no business of his (literally!) as to what that board may do unless, of course, he expects to be its chairman as well. "

          When the split was done in New Zealand it was a complete cleavage - noone was allowed to work for both companies.

          For obvious reasons allowing that would result in continued anticompetitive behaviour.

  13. Anonymous Coward
    Anonymous Coward

    Recent discussion with a senior BT person

    I asked when "proper" high speed internet would be installed and mentioned B4RN.

    "We see a lot of fly-by-nights like them. They're good when they start, but the people behind it eventually get bored and we have to pick up the pieces".

    "We will not install a true fiber option in your village until there is a demand for it" - our attitude is to get it in to encourage people to move here, rather than wait until they've all left due to the lack of modern infrastructure - "Yes, I can understand that point of view".

    I'm sure I've seen that BT are currently looking at GPON for furture fiber deployments. This is not the right technology (but it is slightly lower cost) as it's slower (contested) and a fault with an end-user can disrupt 32 (or more) other connections. B4RN are fiber ethernet and can upgrade to higher speeds very easily as the termination hardware costs fall - they currently offer 1 Gbps symmetric as that's were the best price currently is.

    1. YetAnotherLocksmith Silver badge

      Re: Recent discussion with a senior BT person

      I strongly suspect that should it go to pieces, BT would be overjoyed to 'pick up the bits', & start charging through the nose for customers to get 5Mbps.

      I'd rather have a really poor five connection running at 0.1% of it'ss capability than 'copper' pushed to 150%. Because 0.1% of a fibre is still 10+Mbps, still a full 10x faster than my current copper.

      Also, the FUD used by BT is insane. As someone else pointed it, BT simply threaten to put your area on a list for evaluation for broadband upgrade in 2 years time, & it scares off the investors! It isn't even a promise they will do anything, merely that they will look at it! But that is enough of a chilling effect that it distorts the market. Because BT will squash nearly any competitor.

    2. Alan Brown Silver badge

      Re: Recent discussion with a senior BT person

      "GPON for furture fiber deployments. "

      If you put an optical splitter in the cabinet and run individual fibers to each premises then an endpoint fault won't mess up everyone else.

      Of course BT will run 1 fibre past all the premises and put an individual optical splitter at each one. They have that mentality.

      1. AndrueC Silver badge

        Re: Recent discussion with a senior BT person

        Of course BT will run 1 fibre past all the premises and put an individual optical splitter at each one. They have that mentality.

        Just like cable companies do with coax you mean? That's another sensible cost compromise although cable companies are beginning to sweat a bit as bandwidth demands increase. Don't forget that we're talking about a consumer grade service here. Corners sometimes have to be cut to reach a price point that the average consumer is willing to pay.

        Anyway this is probably moot because BT haven't done that so far. They have been using optical aggregators and running individual fibres to properties from there.

  14. rorythompson

    Seems fair enough to me. BT is the only company wanting to put their money where their mouth is and invest the Billions needed to provide the broadband network the country needs. Everyone gives it a hard time (it's an easy target being so big), but there is no one else with the intention of making this investment - private company or government!

    1. Anonymous Coward
      Anonymous Coward

      There were, but they were all pushed out.

      As for "investment"... Our local exchange was originally scheduled for upgrade a few years ago. The upgrade was scrapped and the exchange reclassified as "uneconomic" at the same time as BDUK was announced. We have now been FTTC enabled (after the council handed over BDUK funding), but it doesn't work - all that's happened is the PCPs that would have been enabled under the original plan have been upgraded with a large chunk of taxpayers money. What is needed is investment in new PCPs to reduce the ridiculously long cable runs that exist, but this will only happen if yet more taxpayers money is added to the pot.

    2. Alan Brown Silver badge

      "BT is the only company wanting to put their money where their mouth is and invest the Billions needed to provide the broadband network the country needs."

      Other companies have attempted to do so, but BT have simply leveraged their de-facto monoplies in the market and scared investors off by threatening to move in (or killed EU funding for community projects by doing the same thing)

  15. b166er

    BT's plans would be put at risk? Perhaps that's a good thing.

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