back to article BT agrees to legal separation of Openreach

Former UK state monopoly BT has finally agreed to regulator Ofcom's plans for a legal separation of its broadband division Openreach. Under the agreement 32,000 staff will be transferred from BT to work directly for Openreach, with all BT brands to be removed from the network provider. The decision follows a year-long dispute …

  1. IHateWearingATie
    Thumb Up

    Cautious optimism

    Given the legal and financial nightmare of breaking off OpenReach properly, it seems to me that this is the most practical option OFCOM could have gone for. Its been a few years since I was involved in Broadband stuff, but this could be a good thing. Cautious optimism I think.

    Of course, nothing will satisfy the fibre-everywhere zealots except the public flogging of every BT manager in Trafalgar Square, but there's always a few who are never happy.

    1. Martin Summers Silver badge

      Re: Cautious optimism

      Separation would be easy, it would be a successful completely independent entity and that will be the next thing to happen. BT have finally realised that its customers are not going to shut up about the massive conflict of interest (and why should they). Now they can easily sell Openreach to the highest bidder and get rid of the headache. BT have not made this decision out of the goodness of their hearts. Only when they are truly independent will Openreach be what it should be and we might see some better investment in infrastructure.

      1. Doctor Syntax Silver badge

        Re: Cautious optimism

        "Now they can easily sell Openreach to the highest bidder and get rid of the headache."

        Presumably by headache you mean the pension liability.

        Or do you mean the necessity to find the money for those infrastructure investments?

        In either case the headache would remain, it would just have been moved elsewhere and all the existing moaners would also just move their moaning elsewhere.

        1. Steven Jones

          Re: Cautious optimism

          What everybody fails to mention, and possibly the most important point of all, is that the new Openreach will not legally own the network it operates, or any IPRs and any future network investment it makes will be on behalf of BT Group. This is explicit in the commitments if anyone cares to read it. However, as people these days appear to be happy to comment on anything and everything without actually bothering to read the documents or deal with facts, then why should this be any different?

          It looks like the new OR is going to be set-up as a management/operation company for the network owned by BT group. It will make investment decisions, within a financial model agree with BT group, but it will be on behalf of BT Groups with respect to the assets.

          If anybody doubts this, I invite them to read the undertakings which can be found here. Section 9 is interesting with regard to assets.

          http://www.btplc.com/UKDigitalFuture/Agreed/CommitmentsofBTPlcandOpenreachLimitedtoOfcom.pdf

          I anything, it would appear to make the floating off of OR as a truly independent company even further away if it is not to own the network assets it operates. It just becomes a network services company with an investment advice arm...

          1. IHateWearingATie
            Boffin

            Re: Cautious optimism

            It's only important if you think that BT Group are going to be able to materially influence the detail of network strategy through blunt levers like cost of capital and expected ROI without giving the game away to OFCOM Given the regulator would be looking for different financial expectations being applied to different parts of the business, and these kinds of things will be obvious in the technical sections of the accounts as a pretty obvious giveaway, I retain my note of cautious optimism.

            Unless your ultimate goal is full separation as an end in and of itself, and in fact I wouldn't see this as making it any harder than it is now - the pension liability and access to capital markets using the wider BT Group balance sheet are the key blockers, not ownership of IPR.

            1. Anonymous Coward
              Anonymous Coward

              Re: Cautious optimism@ IHateWearingATie

              I wouldn't see this as making it any harder than it is now

              With all due respect sir, you are wrong. Full legal separation INCLUDING assets is essential, and Steven Jones is right. It looks like OFCOM have fucked up again, as the sceptical amongst us expected. I've worked for a few regulated businesses, and for holding companies that have owned ring-fenced, legally separated operations. Done properly it works well (surprisingly, for both consumers and investors), but OFCOM have yet again snatched defeat from the jaws of victory.

              Earth to Sharon White! How much are you paid for being as totally ineffectual as your lacklustre predecessors? Never mind, eh? When you retire you'll get a gong on the honours list for "services to diversity". I wish I was a public sector Gravy Trainer.

              1. IHateWearingATie

                Re: Cautious optimism@ IHateWearingATie

                "Full legal separation INCLUDING assets is essential"

                Two things - to what end is full legal separation essential, and how has what OFCOM agreed with BT now made this harder to achieve than from the the current position?

      2. John Brown (no body) Silver badge

        Re: Cautious optimism

        "sell Openreach to the highest bidder ...truly independent"

        Somehow, that just doesn't sound quite right.

        As I understand it, Openreach will continue to be a subsidiary of BT, just an arms length one. Selling it off as a separate entity would probably see yet another foreign take over and politically that's not going to go down well, especially in light of Brexit and UK sovereignty etc etc etc that is being spouted a lot lately.

  2. itzman
    Big Brother

    What about BT wholesale though?

    Currently openreach products and services are supplied by BT wholesale IIRC.

    1. Tom 7 Silver badge

      Re: What about BT wholesale though?

      You didnt expect any improvement here - this is just another smokescreen from BT via offcourse. BT shares are up 4% already so the market can spot the uselessness of the move. Its a clever move by BT - offering nothing but keeping offcourse 'happy'. This may even fend of Murdoch in mid 2020, but I doubt it.

    2. AndrueC Silver badge
      Go

      Re: What about BT wholesale though?

      BT wholesale can continue to do that. The agreement is not saying there will be no further contact with the rest of the BT group. In fact it makes that situation better as BTw might be free to resell products from other suppliers. Maybe even the altnets, once they become mature enough to tolerate losing some of their margin to BTw.

  3. AndrueC Silver badge
    Thumb Up

    A good decision, I feel. It avoids the legal and financial difficulty of a full separation. It also means that openreach retains the backing of the BT group which help them get investment funds from the markets.

  4. Commswonk Silver badge

    Uh Oh...

    Under the agreement 32,000 staff will be transferred from BT to work directly for Openreach, with all BT brands to be removed from the network provider.

    On the face of it this means that all Openreach vehicles will have to be reliveried to get rid of anything that looks like "BT".

    Guess who'll finish up paying for that... and how.

    1. paulf Silver badge
      Go

      Re: Uh Oh...

      IME Openreach vans have Openreach text and multi-colour cable branding with a note saying "A BT Group business" and the BT globe logo. The text referencing BT and the globe logo are sufficiently segregated from the other parts that all they'd need to do is put a white vinyl wrap over the BT text and logo.

      1. Anonymous Coward
        Anonymous Coward

        "A BT Group business" and the BT globe logo

        Since they will be 100% owned by BT, what's different anyway? Isn't a "group" of companies where a holding company owns the others?

    2. wyatt

      Re: Uh Oh...

      I'd expect there to be a natural churn of vehicles and stock so removing the logo shouldn't be difficult. What will cost is the money they sink into designing a new logo and we all know how stupid that can get.

    3. Steven Jones

      Re: Uh Oh...

      Changing the branding on vans is trivial It's just giant decals printed on film. Peak off the old one and apply another. With companies with fleets the size of BT then it can be done for a few tens of pounds each time. They do it often enough for advertising purposes, and it will just be fitted into the schedule.

      The real costs are not going to be the visible ones.

      1. TheVogon Silver badge

        Re: Uh Oh...

        "The real costs are not going to be the visible ones."

        Apart from presumably a new and likely very well remunerated board of directors...

    4. Dan 55 Silver badge
      Meh

      Re: Uh Oh...

      Screw the vans, shouldn't you be worrying more about the work contract and pensions shenanigans they can get up to with the staff transfer?

    5. Anonymous Coward
      Anonymous Coward

      Re: Uh Oh...

      {Face palm} Discussion transgresses quickly to the most important thing: Logo Livery.

  5. This post has been deleted by its author

  6. wolfetone Silver badge

    Legal separation

    So what does that mean? Legally separated but they live together for the sake of the kids?

    They're not divorced. So nothing will change.

  7. Anonymous Coward
    Anonymous Coward

    What crap, doesn't go far enough and Openreach should be split completely from BT. £1.2bn frittered away on CL football rights should have been spent on laying fibre. Excuse me but BT became bigger and more market dominant by swallowing EE.

    A bullshit fudge Sir Humphrey Appleby would be proud of.

    1. Doctor Syntax Silver badge

      "Excuse me but BT became bigger and more market dominant by swallowing EE."

      That was just the current management undoing their predecessor's idiocy of losing their original place in the mobile market.

      1. SW10

        That was just the current management undoing their predecessor's idiocy of losing their original place in the mobile market.

        It's easy to forget how disastrous things looked back then; BT had monstrous debt following the mobile auctions and its peak valuation was just prior to the dotcom crash. Creating and divesting mmO2 was to essential to keep things afloat.

        You could argue it worked - shares were worth a shade under 83p when mmO2 was spun off and Telefonica later bought it for £2. By comparison, Vodafone's price was (about) 220p when mmO2 was spun off and (about) 175p in Oct 2005 when Telefonica's buy-out was agreed.

        1. Doctor Syntax Silver badge

          "You could argue it worked"

          In the short term.

          Look at the long term consequences. BT is now 12% owned by Deutsch Telekom and a complete take-over is a possibility. Ultimately the fixed line thinking dominated BT management's approach and they failed to see staying in mobile as a strategic necessity.

          From O2's point of view it may have been welcome; the expression "Big BT" was a term of abuse around the Arlington.

      2. Anonymous Coward
        Anonymous Coward

        "A bullshit fudge Sir Humphrey Appleby would be proud of"

        Err - . "of which Sir Humphrey Appleby would be proud."

        Also, I think he would have separated the two entities but created a completely new third both to co-ordinate their activities where they interact and to prevent that happening if it could result in "change."

      3. Steven Jones

        The selling of off of O2/Cellnet was forced on BT by the money men after they got overextended and caught out be the telecoms market crash that followed all those overprice 3G mobile phone licence auctions back at the turn of the millennium. A lot of network companies got wiped out or had to be restructured.

        All the telcos had been banking on the market price of the assets they had owned/bought into. When the share prices collapsed, then they got left with the debts. Inept management, but it was a cross-industry madness at the time. A bit like a mini banking crisis.

  8. Anonymous Coward
    Anonymous Coward

    Smart move

    Openreach completely hived off with a pension guarantee ... I wonder what that means for the much trailed Deutsche Telekom takeover of the BT Group in 2019?

    1. Doc Ock

      Re: Smart move

      If going German means this then I'm happy for it to happen:

      Germany to roll out €100bn gigabit internet network

      1. Steven Jones

        Re: Smart move

        I really doubt that the German government is going to bankroll many tens of billions of investment into a UK network.

        1. Anonymous Coward
          Anonymous Coward

          Re: Smart move

          "I really doubt that the German government is going to bankroll many tens of billions of investment into a UK network."

          Maybe, maybe not. Surely the argument was that opening stuff up to "the markets" would enable *exactly* that kind of investment, e.g. by getting borrowing off the public sector books and introducing the competition element, and [whatever].

          How well has that argument worked for the electriity supply network? Or for the rail network? In both of those cases, the Germans (and others overseas) do already own signicant chunks. What parallels could there be for telecoms networks? Would DTnotBT waste a million pounds a week on football rights like useless BT just did?

  9. Anonymous Coward
    Anonymous Coward

    legally separated. means F**K all as ......

    From the BBC "The BT board will set the annual budget. As the 100% shareholder, the owner of the company that's not unreasonable."

    as BT can control the budget they effectively control what openreach are able to invest in and can hive off a % of the openreach profits for their own use.

    we will only give you £X so you can only supply Gfast as you dont have the money to roll out FTTP.

    If Open rach was "truly" separate and independent of BT we the consumer and other network providers could be sure the line rental charges are used for the running of openreach and the network and NOT invested in F**King Football TV rights

    1. Anonymous Coward
      Anonymous Coward

      Re: legally separated. means F**K all as ......

      If Openreach was "truly" separate and independent of BT we the consumer and other network providers could be sure the line rental charges are NOT used for the running of openreach and the network but invested in F**King Football TV rights.... because Sky would swoop in and buy it.

      1. paulf Silver badge
        Meh

        Re: legally separated. means F**K all as ......

        Exactly - if Openreach was completely sold off by BT it would just be snapped up by a former state telecoms monopoly from another country which would milk it harder to subsidise their home market. Or some private equity fund that would load it up with debt, sweat the assets harder by turning off all but the bare minimum investment, give themselves a massive one off dividend then vanish into the night, letting it go bust and leaving HMG to pick up the pieces.

        Or to put it another way, "Just because the current situation is shit, doesn't mean the proposed alternative is any less shit".

      2. Soruk
        Facepalm

        Re: legally separated. means F**K all as ......

        I'm probably going to sound like a communist here, but it would probably be the best for the country as a whole for Openreach to go into 100% public ownership, owned by the government but operated as a separate commercial entity (a bit like Channel 4 is owned by the government).

        1. Doctor Syntax Silver badge

          Re: legally separated. means F**K all as ......

          "I'm probably going to sound like a communist here, but it would probably be the best for the country as a whole for Openreach to go into 100% public ownership, owned by the government but operated as a separate commercial entity"

          Some of us remember the mess that was from the first time round.

          1. Anonymous Coward
            Anonymous Coward

            Re: legally separated. means F**K all as ......

            Yes I remember BT before privatisation, it was cheaper and any profits went to the government offsetting taxes

            It provided employment for thousands of UK citizens including lots of technicials and Engineers who now have to look elsewhere for jobs.

            So now taxes are higher and the privitised industries still have monopolies on essential services so are able to charge whatever they like. BT used to pay for itself not only in terms of modern infrastructure for business and consumer alike. Public BT was much less of a burden upon the general public simply because the general public were the shareholders unlike now where after the running costs there is always the private share holders to pay.

            Like all the privatised industries if they weren't making money then no one would have bought them.

            Privisation in the UK just added additional layers of useless management and profiteers who have been wringing the UK citizens dry ever since without investing back into the infrastructure the people in this country depend upon.

            Until everyone can have a IP only connection for the price of the line rental then nothing has changed and this move is just more jobs for the boys

      3. Anonymous Coward
        Anonymous Coward

        Re: legally separated. means F**K all as ......

        Make it so that Ofcom have control and regulate the organisation.

        Regulate that No network operator can own more than X% of Openreach. no foreign investor can own more than Y% etc. make it so a minimum % (90%) of annual profits after costs depreciation etc etc HAVE to be reinvested in the network which would make it unattractive for takeover.

        possible idea: Ofcom or Govt have a "Golden" veto share.

        I would also give an independent Openreach control of Mobile and TV spectrum as well. so all operators fixed line and Mobile and TV will have to purchase connectivity through the one body who would manage and invest in the future of the combined network with a universal service obligation.

    2. Tom 7 Silver badge

      Re: legally separated. means F**K all as ......

      Both entities will be owned and controlled by exactly the same shareholders. Openretch will obviously want to do the best for their shareholders and the remaining BT will want to do the same and I cant see it making one iota of difference - other than the vans paintwork of course.

    3. SW10
      Go

      Re: legally separated. means EVERYTHING

      Legally separated means everything—this is just an intermediate step and the market will love it.

      The value of each organization will become clearer for the market over time and within 2-3 years BT will spin Openreach off. In the current environment, pension funds are desperate to get their hands on anything that churns out stable dividends, and Openreach will be just that.

      1. Anonymous Coward
        Anonymous Coward

        Re: legally separated. means EVERYTHING

        The only reasons BT have agreed to what they have are

        the fact that the fixed line market is only being kept alive as people need the line for Internet connection the actual use for phone calls has gone through the floor. the fixed line market will tank when 5G offers people a fast alternative over fixed line for data delivery.

        The fact that they can see a way out of the pension Black hole that they have gotten themselves it to if they can flog off openreach when they have bled it dry

        1. Anonymous Coward
          Anonymous Coward

          Re: "the actual use for phone calls has gone through the floor."

          "the actual use for phone calls has gone through the floor."

          Maybe that's because the price of calls made via The Cartel have gone through the ceiling, especially so for out-of-bundle calls (20p setup charge?)

          Maybe if the price of landline calls via The Cartel was actually based in reality (big thank you to Finarea, 1899, etc - UK landline calls at 1.2p/minute) people would go back to using the landline when it's convenient.

          Maybe some people who want to be able to clearly and reliably hear both ends of a conversation still use landlines, and those who have a well-informed choice use a call provider other than BT (even if they use BT for overpriced line rental).

  10. Andy Livingstone

    One question to decide whether it i has any merit at all. Will end users have the ability, at last, to contact OpenReach to get answers?

    1. AndrueC Silver badge
      1. Anonymous Coward
        Anonymous Coward

        Openreach accountability.

        AndrewC, you sound like a BT apologist.

        What a mix of interns/£18,000 a year admin staffer, thinking up witty responses and replying to tweets, yet ultimately with one goal - to bat you away.

  11. Anonymous Coward
    Anonymous Coward

    Given how badly BT fucked up with regards to my broadband last year I'm cautiously not optimistic.

    I had to rely on a friendly next door neighbour (on TalkTalk no less) for internet access for a couple of weeks whilst BT got their poor excuse of an act together. Going from a sustained 74mbit to less than 1.5mbit felt like a proverbial kick to the bollocks.

    1. Cardinal

      "felt like a proverbial kick to the bollocks."

      There speaks a man who has obviously NEVER had a kick in the bollocks!

  12. Smegite

    talking about openreach's lack of investment.

    I live on a new build estate (Dec 2015)

    we have standard DSL (5mb),but as the last phase of 900 houses, we are on a different street cab from the majority of the estate.

    BT Open Reach have stated there is no plans for any upgrade to FTTC (what happened to the gov agreement to enable best available on new estates!)

    this is despite living 90 secs from the A11, 2 miles from norwich city centre, and in the shadow of the UEA, Norfolk and norwich hospital and a new science park.......

    1. Korev Silver badge

      Virgin are in Norwich, do they cover your street?

      1. Anonymous Coward
        Anonymous Coward

        I remember when cable first came to Norwich - late 90s.

        You reckon Virgin added to cable network in the area since then?

      2. Smegite

        nope, its a new build estate, VM havent ruined any new paths around norwich in years.

    2. AndrueC Silver badge
      Meh

      I live on a new build estate (Dec 2015

      Your builder might be at least as much to blame there. FTTP has been an option for new builds for a while now. Sadly it sounds like yours went with the cheaper copper option :-/

      For anyone currently buying a new build you might want to look at openreach's current offering.

      1. Smegite

        apparently they (bovis & Kier) are as much in the dark as the rest of us, the sales agents have said they have lost sales due to the lack of SFBB

      2. Smegite

        also its, a BRAND NEW CAB, and they still dont have an plans to install a DSLAM

      3. John Brown (no body) Silver badge

        "Your builder might be at least as much to blame there. FTTP has been an option for new builds for a while now. Sadly it sounds like yours went with the cheaper copper option :-/"

        Serious question. What's it got to do with the builder? Surely all they do is provide access? At most they may provide the ducts. What would a builder need to provide that's different for openreach to install fibre instead of copper?

        1. AndrueC Silver badge
          Boffin

          Good question. All I know is that it's always up to the builder to contact openreach and ask them to extend their network to cover the new properties. They have a choice of technologies. FTTP is not just a matter of 'fibre instead of copper'. There's more to it than that.

        2. Anonymous Coward
          Anonymous Coward

          "Serious question. What's it got to do with the builder?"

          It's the builder's responsibility to arrange and pay for for telecoms provision to new builds, along with gas, water and electricity. Sometimes they'll ask Openreach to do it, sometimes they'll use someone else. Once it's built, the builder then invites a telco, usually Openreach, to take ownership of it. It's similar to the process whereby councils 'adopt' new roads in developments for maintenance and all that stuff.

          If the developer just pays for basic telephony capable infrastructure, that's what gets built.

  13. Anonymous Coward
    Anonymous Coward

    It's a bit like me legally separating from my dog.

    I still own the dog, the dog still does as it's told by me and I feed the dog as before.

    Though now when the dog shits on the neighbours lawn I can say it's not my fault.

    Who thinks this shit up?

  14. inmypjs Silver badge

    Ofcom continures to be utterly useless.

    The shit and expensive service from openreach was never anything to do with who owns/manages them. The problem is their monopoly and Ofcom being completely fucking useless at limiting openreach's abuse of that monopoly.

    "The new Openreach will be built to serve all its customers equally"

    Yes equally badly because their customers have nowhere else to go.

    1. Anonymous Coward
      Anonymous Coward

      Re: Ofcom continures to be utterly useless.

      Openreach's line rental charge to ISPs and telcos is about £7 a month. How much cheaper should it be? Ofcom set that rate, so it's entirely in Ofcom's power to manage.

      It's also not much of a monopoly when Virgin reach half of British homes and there are three mobile networks not owned by BT. It's only a monopoly in the same way that Ford have a monopoly on selling fiestas.

    2. Alan Brown Silver badge

      Re: Ofcom continures to be utterly useless.

      "The shit and expensive service from openreach was never anything to do with who owns/manages them."

      Actually, it has everything to do with that.

      An Openreach which is dependent on its customers vs having the dead hand of head office holding things back will be quite the different beast to the Openreach of today.

      As long as BT headoffice can pull the strings, Openreach will continue to be anticompetitive.

      1. inmypjs Silver badge

        Re: Ofcom continures to be utterly useless.

        "An Openreach which is dependent on its customers"

        Seriously? Openreach's customers re-sell broadband and landline telephone services. Where else are they going to buy those services to re-sell? Openreach's customers are totally dependant on Openreach and have no option but to take whatever Openreach offers. As long as their competitors (the other Openreach customers) get the same same deal they don't even care because their customers are going to have the same shitty service from Openreach regardless of which re-seller they choose. The only thing the re-sellers have ever complained about is BT getting preferential treatment from Openreach.

        All Openreach has to worry about is a bit of competition from Virgin in less than 1/3rd of the country and Ofcom.

        1. Alan Brown Silver badge

          Re: Ofcom continures to be utterly useless.

          "All Openreach has to worry about is a bit of competition from Virgin"

          You are blurring BT wholesale/retail and Openreach (lines and ducts), either deliberately or naively.

          Virgin is an ideal Openreach CUSTOMER, not competitor - as are all telcos with in-ground infrastructure.

          The day Openreach is fully independent is the day you'll see Openreach salespeople actively approaching outfits like Virgin offering to lease out duct space so Virgin doesn't have to spend 50k/mile to dig up roads - which is the primary barrier to rolling out CATV to every cul-de-sac in the country and can simply run them down openreach trenches instead.

          They'd also be offering to maintain Virgin (or other telco) outside plant for XYZ facilities management fees and leasing space in that 3rd party ducting.

          They'd ALSO be providing leased lines WITHOUT demanding that BT wholesale NTUs be attached to each end of the pair (this is one of the classic incumbent telco rent-seeking behaviours that dramatically drives up costs for 3rd parties) and actively seeking dark fibre customers.

          Why do I say this? Because this is exactly what's happened in New Zealand, where Chorus was entirely split off from Telecom New Zealand (now Spark) - and it turned out that the pensions liabilities were a fiction, along with the high costs that TCNZ (and BT) claimed are incurred for operating the outside plant network (When the company is part of the group, you can use creative accounting to siphon out money)

          An entirely independent Openreach (independent headquarters, board, shares and management) with regulated line charges to all and restrictions on shareholding to prevent any kind of predatory aquisition (as a Strategic National Interest, this is justifiable and legal) has the potential to have the same galvanising effect on the market on the UK's comfortable triopoly as it had in New Zealand's comfortable duopoly.

          Interestingly, 6 years on from the split, the old NZ dialtone company is in trouble, having had its credit rating slashed not long after the split, whilst the lines company had its one upgraded (the exact opposite of the FUD scenario it and BT put out). As with New Zealand, in the event of a fully independent Openreach, I wouldn't be at all surprised to see BT crying "poor us" a couple of years down the track, demanding special concession rates because the Openreach charges are "far too high", despite all the other companies being happy with them.

          I'm not saying the NZ model is perfect - Chorus' regulated copper rates have been set too low recently and the company is stinging a bit as a result - what isn't helping is that the low rates are discouraging the stated objective of getting all clients migrated off copper and onto fibre.

          1. Anonymous Coward
            Anonymous Coward

            Re: Ofcom continures to be utterly useless.

            "Virgin is an ideal Openreach CUSTOMER, not competitor - as are all telcos with in-ground infrastructure."

            That's not what Virgin say though, they're against any split.

            The reasons for that being that Openreach will want a profit from whatever infrastructure they lease to Virgin, whereas Virgin will be managing the cost of their own network to provide a competitive advantage. If Virgin are forced to buy the same last miles as everyone else they lose cost advantage and service differentiation - they just become 'me too' in the broadband space.

            New Zealand broadband costs more, had a humungous state handout to make it work and has a lower average speed than the UK*, so I'm not sure what lessons there are to take from that experience, other than maybe 'don't do it'.

            *Akamai State of the Internet - New Zealand - ave speed 11.3Mbps, Global Rank 40th

            United Kingdom - ave speed 14.9Mbps, Global Rank 20th

  15. Andy The Hat Silver badge

    Spin it off ...

    Spin it off completely, let the Germans buy it, asset strip then sell it to a Chinese 'investment company' then you'll see what crap really is ...

    I'm with the proper Communists ... nationalise the infrastructure.

  16. Mystic Megabyte Silver badge
    WTF?

    More split needed

    BT landline should be split from BT entertainment. Why should my phone bill increase to pay for BT sport in which I have no interest. I'm still stuck on a BT Wholesale only exchange but I pay more to avoid using BT as my ISP. Bastards!

  17. Alan Brown Silver badge

    You'll know Openreach is fully separated

    When they're leasing duct space access to Virgin and other BT "competitors"

    This is what happened in New Zealand when the incumbent there tried to sell the BT/Openreach to the regulators there in order to stave off government intervention.

    What also happened in New Zealand is that the equivalent to BT had its credit ratings downgraded, whilst the equivalent to Openreach had them upgraded - and those "pension liablities" as well as "staggering losses" turned out to be accounting fictions cooked up to try and scare off regulators.

    Incidentally the easiest way to force the split is simply to say "No more money for broadband rollouts unless you split". It short circuits any court cases because you can't force someone to hand over cash on contracts that haven't been signed yet.

    1. Anonymous Coward
      Anonymous Coward

      Re: You'll know Openreach is fully separated

      All I can say is NZ's Politicians/Regulators must be more forceful, more honest, less technically incompetent, and less 'buyable' than the UK equivalent.

      G.fast is a fcuking nonsense. Any UK Politician/Regulator promoting this for BT, is basically corrupt. And, the new way of promoting G.fast is 'not promoting' it, by saying the plans should be "underlying technology neutral", which 'is' basically promoting G.fast in all but name.

      Because no one in the right mind (who didn't work for BT/large copper biased carrier) would start a new 'green field' network using Pointless G.fast Technology, so why the fcuk is the UK continuing to invest in BT's copper?

    2. Anonymous Coward
      Anonymous Coward

      Re: You'll know Openreach is fully separated

      "those "pension liablities" as well as "staggering losses" turned out to be accounting fictions cooked up to try and scare off regulators."

      Unbelievable. Next thing you'll be suggesting that an accountancy company's preferred answer to "what's 2 + 2" isn't 4, or even 5 (respectful tip of the hat to user "2 + 2 = 5" here), the preferred answer is "who wants to know?" and (ideally) "what's it worth for us?".

      I mean this is the kind of company the world trusts to open the correct envelope on Oscars night, right?

      Check this out (via Google if necessary):

      https://www.ft.com/content/80548842-e3c6-11e6-9645-c9357a75844a 26 Jan 2017

      or various equivalents at less definitive sources elsewhere.

      "BT is to bring forward a review of its auditors in the wake of a damaging accounting scandal in Italy that will end a relationship with PwC that dates back more than 30 years. [...]

      BT will now accelerate that following the accounting scandal that has engulfed BT Italia and triggered a £530m write-off."

      See also, from as recently as 2010 (but same names in the frame):

      https://www.accountancyage.com/aa/news/1809385/bt-pwc-change-audit-staff

      "BT asked PwC to move members of the firm’s audit team serving the telecommunications giant after the company was forced to writedown £1.6bn following a wrangle over profit assumptions.

      The Financial Times reports that news of the reshuffle in the audit team was revealed by Sir Mike Rake, BT chairman and former head of KPMG International, during the company’s annual general meeting this week.

      Though auditors are rotated it is rare for news of a client demanding staff changes to emerge in public.

      The difficulties arose for BT in the accounts for the Global Services Division during 2008-09. The FT quotes Sir Mike saying that a complete review has been undertaken and that BT’s internal audit service has been strengthened.

      PwC declined to comment to Accountancy Age. It remains unclear which staff may have been moved or whether changes involved the engagement partner on the BT audit."

      Read this bit again: "BT's internal audit service has been strengthened".

      May or may not have been true, but it was about as believable as "the cheque's in the post", and the auditors (internal and external) seem to have been rather less useful than a chocolate teapot.

  18. orangehand

    Out of interest is there a chart of different countries line rentals anywhere?

    1. Anonymous Coward
      Anonymous Coward

      Does it matter?

      Do other Countries matter? Just look at the Ofcom regulated wholesale line rental cost v the BT Retail line rental cost over the same period. Everyone else (pretty much) copies BT Retail's line rental charges for bundled services. Retail line rental prices are operating as an Ofcom approved Cartel.

  19. David Woodhead

    Great staff: crap organisation

    In my experience, the OpenReach field operatives are excellent: they know what they're doing, and they're prepared to work outside their remit to fix people's problems when the limits of their remit are obviously stupid.

    It's the infrastructure within which they have to work which is a complete pile of pants.

    1. Anonymous Coward
      Anonymous Coward

      Re: Great staff: crap organisation

      "In my experience, the OpenReach field operatives are excellent"

      Ditto. Their productivity would be better if (a) they didn't have to spend time re-doing what Murphy and friends didn't get right the first time and (b) their 'management' systems and processes allowed the use of a certain amount of engineering common sense rather than ridiculous process+metrics-driven insanity,

      See e.g. this sad tale first posted three months ago, with a more recent update at the end.

      A recent fault in a VDSL cab near here affected dozens of people who were mostly, but not exclusively, customers of BT. After a few days, and aided by customers, the smarter Openreach guys started to work out that they were getting lots of faults downstream from this cab, and that for certain classes of fault report and remote diagnostic symptom there was little point in an engineer visit to customer site, because the symptoms were down to the broken VDSL cab. But they had to do it, because that's what the process says you have to do.

      At one point there were three BT Openreach bods attending three separate fault reports in a block of 40 flats I'm familiar with. All wasting their time because the symptoms were due to the fsult in the VDSL cab. Also wasting their customers time. All could have been doing useful (rather than pointless) work elsewhere. All because BT Retail (and BT Business) processes said the engineer visit had to be done, even though the cause had been already identified, and was not rectifiable by a customer site visit.

      To make matters worse, the only method of getting an update on when the VDSL cab might perhaps be fixed seemed to involve opening yet another fault with BT (the previous one having been mysteriously closed) and thus incurring the cost and inconvenience (to all concerned) of yet another unnecessary engineer visit to customer site."

      February update: One small business affected by this month and a half outage was in due course billed £500 for unwanted and unnecessary Openreach engineer visits, which only occurred because of the mysterious and unwarranted closure of an unfixed fault on the (VDSL) line.

      Phone calls to BT Business eventully had the charge refunded, but many others many not have been so lucky. Formal complaints to BT Business disappeared without trace.

    2. Alan Brown Silver badge

      Re: Great staff: crap organisation

      "It's the infrastructure within which they have to work which is a complete pile of pants."

      Yes, and that infrastructure is _deliberately_ setup by BT head office to be as difficult to penetrate and as expensive to operate as possible.

      The first thing a separated entity will do is ensure it's efficient.

  20. Homeboy

    He who pays the piper

    The BT Openreach decision has created all sorts of comment about what it will do to improve the independence of the company. Basically, it'll do nothing.

    The key thing isn't where the lines on the corpration's org chart go and whether they're solid or dotted. After this proposed change BT Openreach will still be part of BT Group no matter how everyone tries to spin it. If its owned by BT it will still continue to favour BT no matter what internal rules are put in place. He who pays the piper will inevitably continue to call the tune.

    The only way to get separation and independence is for the shares to be sold off so BT Group is no longer the owner (BTW, no other telco should be able to have a significant share either). It's got to be owned by shareholders who aren't part of the industry Openreach is providing services to otherwise nothing will change.

    1. Alan Brown Silver badge

      Re: He who pays the piper

      "It's got to be owned by shareholders who aren't part of the industry Openreach is providing services to otherwise nothing will change."

      Actually there's a lot of mileage in allowing all comers (including telcos) to own shares up to 5% maximum for any entity, but prohibiting any preferential voting stock and making submarining (ownership of more than the limit by stealth) a criminal matter(*) with any shares discovered to be held this way immediately forfeitable to the crown.

      (*) In the case of mergers, any shares which would take the combined entity over the limit must be disposed of on the day the merger is announced - even if that means taking a bath on the value.

      1. Anonymous Coward
        Anonymous Coward

        Re: He who pays the piper

        "Actually there's a lot of mileage in allowing all comers (including telcos) to own shares up to 5% maximum for any entity, "

        Doesn't that just result in Virgin and Gigaclear and FibreCity having to compete against a cartel? There's every chance things could get worse under your model as game theory tells us that it would be easier and quicker to try and put the competition out of business than it would be to improve service.

        Solutions that would work in a monopoly situation won't work so well where there is established competition and challengers. It could tip the balance back in favour of monopoly.

        1. Anonymous Coward
          Anonymous Coward

          Re: He who plays the fiber

          "Doesn't that just result in Virgin and Gigaclear and FibreCity having to compete against a cartel?"

          Fwiw, I think you may mean CityFibre, not FibreCity. But the confusion is understandable, it is all a bit interesting.

          Many/most FibreCity companies effectively went bust several years ago, having largely failed to deliver on their promises in the UK (Bournemouth, Dundee, etc) and elsewhere (e.g. Australia's NBN?).

          The main FibreCity company's remains were purchased in 2011 by the company now known as CityFibre. CityFibre also features some senior staff who were at FibreCity.

          http://www.thinkbroadband.com/news/4692-cityfibre-holdings-announce-work-to-continue-on-fibre-in-bournemouth.html

          Some FibreCity companies just changed name into CityFibre companies e.g. CityFibre Metro Networks Ltd was previously FibreCity Scotland Ltd:

          https://beta.companieshouse.gov.uk/company/06586002

          Other companies just hang around as though nothing went wrong at FibreCity (e.g. Bournemouth):

          https://beta.companieshouse.gov.uk/company/06585858/officers

          See also e.g. Gigler Limited (formerly FibreCity Wessex):

          https://beta.companieshouse.gov.uk/company/06555306/officers

          See also i3 Group (connections too numerous to mention).

    2. Anonymous Coward
      Anonymous Coward

      Re: He who pays the piper

      "If its owned by BT it will still continue to favour BT"

      Even if it wasn't owned by BT, BT would be its biggest customer. If the biggest customer demands more VDSL and G.Fast, that's what will be supplied. In turn, those demands will be market led - if the choice is something copper based for £20 a month of something fibre based for £50, most customers choose the former. I don't think ownership or incentives are the problem for Openreach, it's market demand - the market wants cheap as possible broadband, not fast as possible broadband.

      "The only way to get separation and independence is for the shares to be sold off so BT Group is no longer the owner"

      Shareholders are the owners - and they'd need compensating if Openreach was taken away from them. I'm not sure though how you'd ensure that no BT shareholder is also an Openreach shareholder.

  21. Jove Bronze badge

    Regressive

    So the generation of fluff-balls undermine another national champion in the interests of aggrandisement of their superficial egos exposing BT to take-over by a foreign party such as France Telecom in the coming years and which not give tuppence to Ofcom's self-serving red-tape.

  22. William Old

    Six months later, and "Openreach Limited", company number 10690039, with its registered office at 81 Newgate Street, London, EC1A 7AJ (same as BT), still carries BT branding, claims to be "copyright British Telecommunications PLC, and doesn't carry display the information required by the Companies Act 2006 on either its Web site or its business e-mails.

    Unfortunately, this is a criminal offence contrary to Regulation 28 of The Company, Limited Liability Partnership and Business (Names and Trading Disclosures) Regulations 2015, made under Sections 82 to 85 of the Companies Act 2006, and this offence is committed by the company and by each of its officers in default. BT is listed on Companies House records as a "person with significant control", and Companies House warned BT about its legal obligations in respect of trading disclosures in May - it (almost) beggars belief that BT and Openreach have simply ignored Companies House and continue to commit this offence. BT's bullying and arrogant belief that it's so big, it doesn't need to comply with the law is at least consistent - The Register has carried a number of sorry tales about its corporate offending.

    Is it any surprise that its share price has almost halved?

    1. Anonymous Coward
      Anonymous Coward

      See also:

      Companies House legal adminsitrivia and how BT and its associated companies and subsidiaries think they're above the law, as reported by the boss at UK boutique ISP AAISP (Andrews+Arnold):

      http://www.revk.uk/2017/08/why-do-openreach-lie.html

      http://www.revk.uk/2017/08/dear-ofcom-can-we-play-this-game-too.html

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