back to article UK's BT: Ofcom's wholesale superfast broadband price slash will hurt bottom line

Ofcom has slashed the price BT’s Openreach can charge operators for superfast broadband, in a package of measures BT said will hit its bottom line to the tune of £120m next year. The proposals are part of broader measures intended to boost broadband investment in the UK, including plans to increase current full-fibre …

  1. Carl Thomas

    TalkTalk

    It might go a bit of the way to helping TalkTalk out of the financial hole they are in, mind.

    The public like paying less for things. The politicians in government like it when Ofcom do popular things, it makes for more votes for them. Longer term planning be damned, naturally.

    1. J. R. Hartley Silver badge

      Re: TalkTalk

      Lol. The public won't pay less, you delicate summer flower.

      1. AndrueC Silver badge
        1. Carl Thomas

          Re: TalkTalk

          The price reductions on line rental have been what's kept broadband prices down while usage has had a CAGR of 40-60%.

          Obviously not so good for those that don't have broadband, they've been subsidising those that do via their line rental.

      2. Carl Thomas

        Re: TalkTalk

        23rd February: Ofcom confirm wholesale price cut on 40/10 FTTC.

        23rd February: TalkTalk announce temporary price cut.

        I didn't say prices would go down, I said that people like paying less, Captain Patronising. Ofcom's policies have long been to ensure broadband is as cheap as possible at the low end, see LLU, and they've done it again with the 40/10 price cut.

        Why would companies bother risking their own cash when they can count on Ofcom to ensure access to anything Openreach build on the cheap?

        Ofcom's CEO loves to point to Spain and Portugal but completely forgets that the incumbent didn't have to wholesale FTTP there for a while when they built it, forcing competitors to build to compete.

      3. Anonymous Coward
        Anonymous Coward

        Re: TalkTalk

        I don’t know, I’ve just been able to sign up with Vodafone for £24 a month including line rental for 80 down 20 up fibre (which so far I get consistently) which is significantly cheaper than the competition, so perhaps market forces are starting to do what they’re meant to

        1. Roland6 Silver badge

          Re: TalkTalk

          >I’ve just been able to sign up with Vodafone for £24 a month including line rental for 80 down 20 up fibre

          And the actual monthly cost when your teaser rate expires?....

        2. Anonymous Coward
          Anonymous Coward

          Re: perhaps market forces are starting to do what they’re meant to

          In the UK, market forces are apparently meant to introduce yet more layers of data-slurping commission-seeking intermediaries between suppliers and their potential customers (y'know, UCompare, GoSwitch, etc).

          Personally I'd rather see clear fair consistent prices for all. But the Big Boys don't seem to want that to be an option - and that applies not just to telecons, or energy, or finance... so much for 'meerkat forces'.

  2. J. R. Hartley Silver badge

    Bad move

    Shitty contractors shouldn't be allowed near our ducts and poles. Faults are gonna go through the roof.

    1. A Non e-mouse Silver badge

      Re: Bad move

      Your comment implies that BT's engineers only do top quality professional work.

      Two problems here: Firstly, it assumes BT's engineers are actually doing the work. Around here, I usually see sub contractors working for BT (& Virgin). Secondly, assuming it is a BT engineer and not a subbie, you're assuming the engineer is actually interested in doing a good job, rather than just doing enough not to get fired.

      There may be quality BT engineers, but there aren't many of them.

    2. Anonymous Coward
      Anonymous Coward

      Re: Bad move

      >Faults are gonna go through the roof.

      Well they are pretty shit already thanks to BT's ancient copper/aluminium network that is unfit for purpose. On my second lift and shift in 3 years thanks to BT's rotting bell wire that isn't designed for 17MHz let alone 30MHz.

      Full fibre is the only way forward for reliable interference free fast broadband. I applaud OFCOM's decision to make use of the existing resource that will cause minimum disruption in delivery of this goal.

      1. Jellied Eel Silver badge

        Re: Bad move

        It's mostly technofetishism. Woo! Fibre!

        I get 80Mbps download via BT over good'ol copper. For me, this is fine. If there were 5-6 of me, all wanting to watch different stuff in 4K, maybe it wouldn't be. But I suspect in that scenario, the bottleneck wouldn't be the local loop. But then I also live <200m from one of my town's main digital exchanges.

        So with this proposal, to compete the carrier would need to:-

        *get into that exchange and collocate their kit

        *run sufficient fibre caternary (ie along BT poles) or in BT's ducts

        *find (rent) space in BT's chambers at the bottom of those poles to install filter cassettes (asuming PON)

        *install their own street cab & power if they're not

        *fan out to end customers via more caternary fibre, or BT's ducts

        All without disturbing any existing infrastructure, rotting, corroding or just collapsed and full of roots. This will be FUN, in the best Dwarf Fortress sense. It might make it slightly easier to use inter-exchange ducts, or rural customers.. But then there's an elephant that Ofcom doesn't appear to want to overcome, ie the VOA and the rateable value of any competitor's fibre. BT & VM have special deals on that, competitors do not.

        1. Lee D Silver badge

          Re: Bad move

          My new place near a large city inside the M25... I get 3Mbps on standard ADSL2, "up to" 10Mbps if I go VDSL. And because nothing else covers my cul-de-sac, there's nothing I can do about it. Sorry, but BT's network is a mess. I use 4G and get 35+Mbps instead.

          And BT will just have to provide for people to use their facilities... if they break it, you charge them for it and fix it. That's how it works already. Because aren't Openreach mostly subcontractors anyway?

          P.S. Last time I asked for a leased line from BT, they took FOUR YEARS and did nothing. After the last six months of constant yelling, we ended up with three empty, incomplete, different and not-joined bits of empty plastic tubing, and then we were told there was "no room at the exchange". Not one fibre every made it even to the site, let alone just jointed together.

          This is the same site that gets 25Mbps "at the boundary" on two seperate VDSL lines, which drops to less than 1 if it rains (and our analogue phone lines all cut out). The six ISDN lines regularly failed (to the point of cables dangling in the street despite no hurricane, etc.).

          But once Virgin put in a proper fibre line, we moved all the ISDN and analogue lines to SIP, all the ADSL/VDSL to the leased line, and have not had a single outage in three years.

          Sorry, BT, but if you want the custom and you're forced to "allow subcontractors" by the people controlling you, that can ONLY be an improvement. It might mean more outages, but I can't imagine it, and at least then there will be a backup of some kind when you don't ever resolve the issues. I'd rather than 20 lines from different companies, one of whom might hire dodgy subcontractors who somehow damage all the other lines occasionally and have to pay to fix it, than being stuck with BT / Openreach as the only (atrocious) option where they don't care if it's broken for years, nothing happens to fix it.

          1. Anonymous Coward
            Anonymous Coward

            Re: Bad move

            Because aren't Openreach mostly subcontractors anyway?

            Technically, Openreach ARE a subcontractor who maintain and operate the network owned by BT Group, although OR are of course owned by BT, just a separate regulatory and legal entity. Openreach in turn use an army of subcontractors themselves.

      2. Blotto Bronze badge
        Paris Hilton

        Re: Bad move

        off you go then AC, go buy some fibre and run it from your house to the exchange, and see how easy it is.

        snow flakes etc

    3. DaveTheForensicAnalyst
      Mushroom

      Re: Bad move

      Laughed so much when I read this, I thought I'd popped a rib!

      Let's face reality, as an IT person, if you see an OpenRetch (spelling is not a mistake!) van within a 10 mile radius of your office on the way in to work, you immediately pull over get out the mobile and phone your nearest and dearest with the line "It'll probably be a late one tonight love, I've seen an OpenRetch van!)".

      1. Anonymous Coward
        Anonymous Coward

        Re: Bad move

        @DaveTheForensicAnalyst

        Jeez you just brought back memories.. There was a cab 200 yards up the road from my old office, and my stomach used to sink every time I saw the Van near it...

        It was even worse at home though, where I would get a fault at least once a month... after a year of this I ended up paying for a business line with 6hr fix support. I'd monitor the connection remotely from work, then I'd ring it in as soon as I saw anything.

      2. Wensleydale Cheese Silver badge

        Re: Bad move

        "It'll probably be a late one tonight love, I've seen an OpenRetch van!)".

        Haha. Memories of a certain room full of network gear. If you saw an engineer working in there, you told your colleagues to save their work at regular intervals because the network would probably fail within the next hour or two.

  3. Commswonk Silver badge

    Whaaat...

    If BT can wholesale at (currently) between £88 & £89 per annum, WFT do they provide by way of "added value" for their retail customers, given what they (which includes me!) have to pay? And now Ofcom are instructing BT to reduce that already modest wholesale cost by a significant margin.

    I don't know the full details of Ofcom's remit but looking after consumers interests doesn't seem to feature in it.

    I fully expect another large increase in monthly charges to come along before much more time has elapsed.

    1. AndrueC Silver badge
      Meh

      Re: Whaaat...

      If BT can wholesale at (currently) between £88 & £89 per annum, WFT do they provide by way of "added value" for their retail customers, given what they (which includes me!) have to pay?

      You should take that up with your communications provider. All the CPs have been steadily increasing rental prices while openreach has been steadily reducing them.

      There's nothing special about BT Retail here. All the CPs are doing it. They all charge us significantly more than openreach charges them for line rental.

      In this case it appears Ofcom are trying the same wheeze that led to FTTC. They are trying to make current xDSL offerings so unattractive to BT that it accelerates FTTP deployment in order to move it's customer base to a product with better returns.

      1. Anonymous Coward
        Anonymous Coward

        Re: Whaaat...

        Did you not know? The cost of power boats and personal Yachts has been going up year on year.

        1. Wensleydale Cheese Silver badge

          Re: Whaaat...

          "Did you not know? The cost of power boats and personal Yachts has been going up year on year."

          That's not a bad choice for an alternative career then.

      2. Alan Brown Silver badge

        Re: Whaaat...

        "In this case it appears Ofcom are trying the same wheeze that led to FTTC."

        This is speciically because they didn't have the balls to simply say "no more broadband funding until Openreach and BT are completely separated companies with dialtone completely separated from lines"

        Remember, that's what New Zealand did after assessing the British market (Telecom NZ wanted NZ to adopt our model), documenting BT's ongoing market abuses and decided that they weren't going to allow that to happen there (they already had a rapacious monopoly, the only question was how far they'd go to break it up and the answer was "fully")

        The result of having the dead hand of the monopolist removed from the throat of the lines company was a complete reversal of culture and a broadband market which is amongst the most competitive in the world despite the challenging topography and low population.

        1. Anonymous Coward
          Anonymous Coward

          Re: Whaaat...

          Alan Brown: "and a broadband market which is amongst the most competitive in the world despite the challenging topography and low population"

          That may be so, but that doesn't make universal high speed broadband economic for all properties. So either the "competitive market" has cross subsidy costs added to everybody's bills, or the uneconomic-to-serve properties have a choice between very expensive broadband, or no broadband. What is the NZ solution to these remote customers?

    2. maffski

      Re: Whaaat...

      If BT can wholesale at (currently) between £88 & £89 per annum, WFT do they provide by way of "added value" for their retail customers, given what they (which includes me!) have to pay?

      Baumol's cost disease

  4. inmypjs Silver badge

    "download entire films, or businesses to share huge files, almost instantly"

    And downloading an entire film that is going to take at least 90 minutes to watch almost instantly is useful why? If you stream you can start watching it instantly anyway.

    People simply can't generate or consume information at superfast rates, superfast is rarely worth anything.

    "woeful full-fibre investment" ?

    If it is barely worth anything why would it be called an investment and what is woeful about it?

    1. Aladdin Sane Silver badge

      Re: "download entire films, or businesses to share huge files, almost instantly"

      Download to portable device to watch on plane/train/bus/the shitter at work.

    2. Cynic_999 Silver badge

      Re: "download entire films, or businesses to share huge files, almost instantly"

      Yup. And nobody will possibly be able to use more than 640KB of RAM, and a HDD size as large as 20MB is just stupid because nobody needs so much storage.

      1. inmypjs Silver badge

        Re: "download entire films, or businesses to share huge files, almost instantly"

        "able to use more than 640KB of RAM"

        64kb/s is enough for voice, has been since the telephone was invented, and always will be. Likewise there is a limit on video data rate a human can comprehend and increasing that will require tens of thousands of years to evolve bigger eyeballs.

        What sources and sinks of data are there that require 100s of Mb/s?

        1. Anonymous Coward
          Anonymous Coward

          Re: "download entire films, or businesses to share huge files, almost instantly"

          "What sources and sinks of data are there that require 100s of Mb/s?"

          Who knows? That's the point.

          I don't know, (on demand augmented reality video might be one requirement), but your argument is like saying "why bother improving the roads, people manage with the potholes today so they should get over themselves, poor little snowflakes. If the journey takes longer then tough".

          The UK is not a third world country, although it's ironic that where I live, fibre is only available due to significant European funding. Zilch from the UK government, ie the same as elsewhere. We should be leading any digital revolution, not playing continual catch up.

          It's like roads - build them and they will come. But that needs vision and imagination - not something current UK civil servants (or some of the public) have much time for.

          "Why improve, what possible benefit could there be?" is a mediocre aspiration.

          1. inmypjs Silver badge

            Re: "download entire films, or businesses to share huge files, almost instantly"

            "Who knows? That's the point."

            Sure, let's invest 40 billion quid like Australia's NBN is costing, just in case someone thinks of something.

            1. Anonymous Coward
              Anonymous Coward

              Re: "download entire films, or businesses to share huge files, almost instantly"

              Australia must believe that having digital infrastructure fit for the 21st century is of value.

              Obviously, the UK lawmakers aren't that particularly bothered. They certainly don't look it. The current aspiration is apparently 10 Mb/s by 2020 - two years away! Maybe they're trying to keep up with Zimbabwe.

              What a pitiful joke.

    3. TrumpSlurp the Troll Silver badge
      Mushroom

      Re: "download entire films, or businesses to share huge files, almost instantly"

      What a load of low slung furry bollocks.

      When did anyone download a film "almost instantly"? To do that you would have to have a (very) remote server with the bandwidth to fully service your request at your maximum available bandwidth plus dedicated reserved bandwidth all the way from them to you.

      You and everyone else in your house/street/town/county/etc.

      Never gonna happen. It is just a sound bite for politicians so they can get some idea of slow, fast and faster.

  5. Anonymous Coward
    Anonymous Coward

    Bye-bye OpenReach

    Just waiting for the installer to put in fixed wireless at my home in NW1. I’ve been suffering with shaky, unreliable max 4 megs down / less than 1 up in Central London for years and now there is finally an alternative. Take your crappy aluminium pair and shove it, OpenReach!

  6. Tom 7 Silver badge

    Well this will be fun

    So BT will have to make its poles available. So no-one will use BT anymore, Openretch will go bust, and all of a sudden no-one wants to pay for the poles. I walk the dog several miles a day and the planting date of a lot of the poles round here is mostly pre '70s and they are starting to go.

    1. AndrueC Silver badge
      Joke

      Re: Well this will be fun

      the planting date of a lot of the poles round here is mostly pre '70s and they are starting to go.

      I get the impression that a lot of Poles want to go :)

    2. TechnicalBen Silver badge
      Facepalm

      Re: Well this will be fun

      BT =/= Openreach

      1. Alan Brown Silver badge

        Re: Well this will be fun

        "BT =/= Openreach"

        As long as Openreach is a wholly owned subsidiary of BT and the lines + ducts are owned by BT, then for all intents and purposes BT very much == Openreach, because BT can tell Openreach what to do - and does so.

        There are extremely good reasons for breaking up a vertically integrated monopoly and Ofcom's continued tinkering around the edges isn't making those go away.

  7. Zippy's Sausage Factory
    Devil

    What happens next?

    Not to be cynical, but isn't this what usually happens:-

    Gov: ISPs, lower your prices, you're making too much money.

    ISPs: Oh no, wait! We need that money for more investment in rural broadband.

    Gov: Hmmm... well OK then, carry on.

    (later)

    ISPs: Hey shareholders, here's a huge amount more money than last year before we made more profits.

    Gov: Investment in rural broadband?

    ISPs: Ha ha ha. Nope.

    Cynical? Moi? Yep.

    1. ArrZarr Silver badge

      Re: What happens next?

      Oh no, no, no, no

      Gov: ISPs, lower your prices, you're making too much money.

      ISPs: Oh no, wait! We need that money for more investment in rural broadband.

      Gov: Hmmm... well OK then, carry on.

      (later)

      ISPs: Hey Customers, y'all are goanna need to cough up more money because we haven't filled our money swimming pool yet.

      Customers: Meh

      (later)

      ISPs: Hey shareholders, here's a huge amount more money than last year before we made more profits.

      1. Anonymous Coward
        Anonymous Coward

        Re: What happens next?

        The conservatives were going to abolish OFCOM years ago and replace it with something fit for purpose.

        Unfortunately, it was just another "jam tomorrow" promise.

  8. hoola

    Double Standards

    And naturally the regulator is going to reciprocate and force Virgin to allow Openreach access to their ducts? That simply is never going to happen. As it stands Virgin can use shite subcontractors to bury a green duct 6" down. The resulting mess is then the responsibility of the local authority to make good at huge costs to the local Council Tax payers. They also randomly put cabinets all over the place with no thought as to the consequences. Virgin then refuse to even admit that it was their responsibility. (https://www.ispreview.co.uk/index.php/2017/09/large-virgin-media-cabinet-frustrates-light-seeking-scottish-pensioners.html) is fantastic, they did eventually move it. The smaller cabinets are just chucked in anywhere blocking pavements, in front of street signs, furniture and flower beds.

    They appear to need no permission, do not go back and fix faults in the reinstatement even when it is marked by their own inspectors.

    BT & Openreach have to jump through all the hoops other utilities do, have ducts that are deeper and generally more robust.

    Openreach may not be perfect but this incessant, one sided purge is not helpful.

  9. Ridgeback

    What about getting cell service providers to share infrastructure too?

    In many countries cellular service providers share their infrastructures (transmission towers, etc) resulting in really good coverage, urban and rural.

    Why don't OFCOM insist on this in the UK?

    Anyone who lives outside a large town will appreciate the importance of this.

    I live in East Anglia and outside of the larger towns one is continually looking for a signal - my area (a village) has coverage from one service provider, Vodafone. If I move out of a 3 mile radius of the village, I lose all signal and find only EE or O2 work, sometimes nothing!

    I have bought a dual SIM cellphone (Vodafone & EE) to try cater for this problem but constantly find areas where I am receiving no signal from either.

    All because the cellular service providers are too selfish to share their towers/infrastructure!

    I have visited 3rd world countries with better coverage than we get in the UK and these countries are a lot larger than the UK! (South Africa, Botswana, Namibia, etc). In South Africa, they are bound by law to share towers.

    And before bringing competitive edge/profitability into the argument, the services compete for customers by the phone deals/contracts they offer without compromising the coverage. Coverage is a level playing field - as it should be and the customer comes first. And the service providers all remain profitable!

    In the UK you mostly have to tie into a 24 month contract and should you move to another area where that contract provider doesn't cover, you are penalised (a heavily loaded cancellation fee) if you try to get out of contract despite the fact that your service provider is no longer actually providing the service you are paying for!

    Come on OFCOM, start insisting that all cellphone service providers share their towers and actually earn the right to use the word "service" to ALL their customers!

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