Openreach pegs full fibre overhaul anywhere between £3bn and £6bn Openreach has estimated it will need to fork out between £3bn and £6bn to invest in 10 million fibre-to-the-premise connections in the UK by 2025, according to a leaked copy of its FTTP consultation seen by The Register. The broadband division of BT, which legally separated from the former state monopoly earlier this year, put …
Can't see TalkTalk and Sky being too enthusiastic. They only began deploying VDSL kicking and screaming and will certainly want to sweat their LLU copper assets for as long as possible.
That said in this instance they should be ignored. Exchange-based xDSL is really holding things up and needs to go by hook or crook. Even where there's no FTTP the spectrum gained would be useful for extending the reach and improving the performance of copper via Long Reach VDSL.
Can't see TalkTalk and Sky being too enthusiastic.
Publicly or privately?
I see Sky and TalkTalk liking this as it will enable them to continue to be two faced!
Firstly, it seems what is being proposed isn't a levy on existing lines - to create a cashflow which can be dedicated to the build out. Secondly, there is no call for investment from the ISPs and specifically Sky and TalkTalk. So BT will be rolling out FTTP using it's own capital - which means the capital isn't available for investment in other services, such as football, net result BT unable to fully compete in the consumer space with Sky/TalkTalk...
Secondly because of the funding, the deployment will necessarily be slowed, giving further opportunity for Sky/TalkTalk to bellyache to Ofcom and all and sundry about how bad BT/Openreach is etc. etc. The net effect of this will be to ensure that BT doesn't get the full benefit of the investment as they pressurise Ofcom to keep BT's wholesales prices artificially low.
Thirdly, throughout this entire period Sky and TalkTalk will continue to operate their LLU copper assets and gain revenue from them. The knack will be ensuring FTTP becomes available on an exchange just as the copper LLU equipment becomes due for replacement...
@Roland6
The point is OpenReach is a seperate entity to BT.. Hence BT is now just a consumer of OpenReach services, same as Sky and TalkTalk, so all rely upon OpenReach to deliver the "last-mile". Hence the implications of this, should be equal across the board.
Lastly, both Sky and TalkTalk inherited a lot of their LLU infrastructure through acquisitions (whose main aim was building a customer base), I doubt they really give a shit about the LLU investment as its now aged and already paid itself back.
Besides, Broadband (ADSL or Fibre) is not really profitable - These companies now get their profits from Multi-Play packs (TV, Mobile, Broadband), where On-demand services are becoming a core consumer requirement this offers a chance for providers to up-sell, for example, their own on-demand and streaming services, or sell you that sexy new 4K tv you'll need to make the most of the speed and streaming!
@AC
>The point is OpenReach is a seperate entity to BT..
However, it is currently unclear as to who actually owns the physical infrastructure and who is responsible for it's fibre upgrade - my contacts seem to be of the opinion that it will remain in the ownership of BT - who will do the actual physical build out and then give Openreach the job of "looking after it"...
Also given the issues over Openreach raising capital at favourable rates, my understanding is that Ofcom et al are looking at BT to be the primary investor in Openreach for the fibre network buildout...
Hence, why at the present time until we get further clarification of just what the 'legal' separation really means in practice, I talk about BT/Openreach rather than simply Openreach on matters of network build. However, I do get your point that BT Retail (and some other parts of BT) should now just be consumers of Openreach services, rather than having privileged access.
>Lastly, both Sky and TalkTalk inherited a lot of their LLU infrastructure ... I doubt they really give a shit about the LLU investment as its now aged and already paid itself back.
I suspect they care about it to the extent that isn't costing them money, whilst allowing them to generate revenues. Once maintenance costs begin to climb they will give a shit...
>Besides, Broadband (ADSL or Fibre) is not really profitable
I expect Sky and TalkTalk will continue to lobby Ofcom to ensure that this remains the case, and that BT remains the main source of investment capital for Openreach - can't have BT making a commercial return on their infrastructure investment... :)
I'd like to see a system where customers are automatically moved to the fastest available Broadband (Superfast/Ultrafast) for 12 months for free, and if the consumer then wants to downgrade or cap their service back to their previous speed (which may be technically easier), no charges will apply. This could apply as an offer to the first 80% takeup of each cabinet on G.fast for instance. So that each cabinet/splitter is 'sweated from day one' for G.fast/Fibre
Where a customer downgrades after 12 months (at the point the price increases), the cost of providing the addtional speed (£7 a month) for those first 12 months is split across the industry, as a marketing cost to get consumers to take the fastest available Broadband.
If we are spending vast amounts on new full fibre infrastructure, we need to be sweating those assets to the max from day one, they mustn't be left to develop cobwebs, waiting for customer take up.
Trying the service for 12 months automatically is by far the best way to see if they find it useful.
G.Fast isn't much of a solution. The unavoidable laws of physics mean this this will serve even fewer customers that FTTC, unless a whole pile of new cabinets are going to be built. Their original intention, according to Bill Murphy, was to mount the G.Fast infrastructure on top of telegraph poles, and tap into residential power to get it to work. But they've changed tack and are reverting to cabinets. Although the speed is higher than VDSL, it's still asymmetric and still subject to impedance, which means the rate of speed drop off is even faster... so distance reached is less, so number of houses reached much less. (or is it fewer?). BT's FTTH is based on passive splitter architecture using GPON, which is why, where it's offered it's 300Mbps down and 30Mbps up. Other SPs such as B4RN and Gigaclear use active infrastructure with all customers directly connected to 1Gbps ports.
There is no LLU competiton now that the DSLAMs have been moved into the cabinets. When the kit was in the exchange, there was room for competitors to install their own infrastructure, which is how Be differentiated themselves by using ADSL2+ before BT. The move by BT to FTTC with VDSL kit in cabinets was a blinder because it killed off competiton in the local loop, meaning you could only buy their wholesale services... Laws of physics mean that long reach VDSL is pretty useless.
Interesting that the main illustration for this piece about fibre optic broadband features a copper coax cable...
>There is no LLU competiton now that the DSLAMs have been moved into the cabinets.
Additionally, there is very limited sub-loop unbundling competition. Where Alt-ISP's put their cabinet next to BT's and have the cabinet-to-premise cable routed to their cabinet (and backhaul), just like BT/Openreach FTTC.
There seems to be a small opportunity to do a Be in those new developments where BT currently only supports FTTC but the cable also contains fibre.
The only locations I've seen viable alt-ISP offerings have been smaller business parks/industrial estates where the alt-ISP can differentiate by offering a greater mix of services than the standard BT FTTH service offering (see NeilF's post: https://forums.theregister.co.uk/forum/containing/3258908 ) and charge commercially viable prices. In fact in my area, it is almost as if BT/Openreach worked in partnership, so BT didn't install an FTTC cabinet in business areas, leaving it to Warwicknet.
SImple solution:- Stop HS2 at Warwick, use a bus replacement service for the last bit to Brum, and give OpenReach the leftover money.
----
Back in the real world
So it would costs 9 times as much to link two cities saving 20 mins, as compared to networking a sizeable proportion of the population (domestic and commercial) saving them how much time per upload\download. Flattening the geography of the UK and enabling any information business to be established pretty much anywhere in the country, Less travelling, Less CO2, Less pressure on the South East etc etc
Don't you just love cost benefit accountancy....
>The only reason they are not doing this is they think the Government will pay for it.
The problem is that prices are regulated, so with this consultation, Openreach are trying to build consensus among the it's reseller ISPs so as to enable it to put pressure on Ofcom to agree to the price increase.
We've seen similar in other regulated utilities (eg. water) where the regulator had to decide the additional cost that could be included in the price to cover infrastructure renewal.
Personally, I think Ofcom need to bite the bullet and agree to there being a £7pcm levy on all BT lines for the next 7 years, as then it really can kick BT/Openreach to get on with it.
"The interest on the capital borrowed to lay it".
Capital Borrowing, which has probably never been cheaper. If you are going to do it (a full fibre local loop), the Window of opportunity of high Copper prices (rose 15% last Nov), and low interest is probably about now.
These type of opportunities don't last forever.
What areas?
If we the people, (sounds like the opening of the US Constitution...) knew about what areas might just possible and with all sorts of tailing wind, brown envelopes stuffed with folding stuff and after a further year of Sundays get FTTP then we who have to pay for it might just possibly say Yes please... Can you do it tomorrow...
Quite how they are going to get FTTP to me I don't know but if they can string it to me via the pole on the otherside of the road then I'll sign up today.
What even is the point of a private monopoly.
If the monopoly is a private one, it can be regulated effectively. If you nationalise it, then the government are the policy setter, owner, operator and regulator. We've tried that combination repeatedly and it rarely works well, both due to simple conflict of interest, and because government couldn't organise a piss up in a brewery.
In the case of BT/Openreach, there's a couple of problems - the regulator is weak and incompetent, and BT have a huge stick to threaten government with, of c£11bn of unfunded pension liabilities on their balance sheet, which means government can't threaten to take the monopoly away from BT, which is always an ultimate option in other industries.
"BT have a huge stick to threaten government with, of c£11bn of unfunded pension liabilities on their balance sheet"
This is exactly the same FUD used by Telecom NZ to try and prevent the split there. It turned out that once the lines company (which employed the most staff) had the dead hand of head office removed, it was profitable and the pensions liabilities weren't as big an issue as made out.
Looking at what happened in NZ since 2011 shows what can happen if the split is done right - and remember that NZ's regulators specifically looked at the kinds of market abuse perpetrated by BT, and said "no, not here"
And what is the betting the first place they roll this out is the over crowded and over supplied cities? Especially locations where there already are VirginMedia and other faster supplies already available?
What about those unlucky people who live in the countryside? I have a client in Surrey, just a few miles from Gatwick, and 5km from four different telephone exchanges. We just upgraded his ADSL (1.2Mbps) to VDSL (3Mbps).
This means they are still struggling to get hiccup free video, yet they have to pay the same full price for the line. And he is by no means alone with this problem. Live somewhere outside of the main conurbations and you get a second class service.
If Openreach can't hit the 10Mbps minimum Government keep "promising" then they should refund the line rental. That would make them think up about upgrading the have-nots.
@anonymous
Yeah, you say that people in the countryside are hard done by connectivity wise.
Meanwhile, in the country proper, a long way from anyone else, we have a customer with FTTP at a rather nice 330 meg (well it’ll do).
Meanwhile in our city centre location, guess who didn’t enable our cabinet for fibre... and didn’t roll out FTTP either,,,,
It’s not as simple as urban vs rural at all.
Bring it on!
When my last promotional rate for FTTC was about to run out, I was seriously considering whether I needed even that - I didn't really make serious use of the available download speed and the much-increased upload speed (which not all providers offer) was a "nice to have" for cloud backups/sync, but not a deal-breaker compared with the service over (admittedly a fairly short length of) copper.
Given how much money Virgin Media's constituent companies buried in the ground in economically-doomed pursuit of a revolution in connectivity, I'd want to see a much more clearly argued case before I have what is effectively an infrastructure tax added to my current bill. Especially if it's going to be built out by a monopoly with no interest in controlling the costs incurred and every interest in controlling the costs demanded.
It's a re-run of the 1990s, this time it's Openreach / British Telecom pulling the government strings instead of the other way round and the result will be the same, the UK's telecoms infrastructure holding back business.
Quote from this article says it all.
"In 1986, I managed to get fibre to the home cheaper than copper and we started a programme where we built factories for manufacturing the system. By 1990, we had two factories, one in Ipswich and one in Birmingham, where were manufacturing components for systems to roll out to the local loop"
http://www.techradar.com/news/world-of-tech/how-the-uk-lost-the-broadband-race-in-1990-1224784
Take it off the rip off monthly charges you been billing me for substandard 3rd world ADSL service for the past 10 or more years?
Think something was missed with this privatisation lark. The idea was to create independent companies that INVESTED in infrastructure and services not went cap in hand to customer every time they wanted to do upgrades that make it a viable business. Most of the copper infrastructure was handed to BT then openreach free of charge at privatisation, what have we been paying line rental year on year for if you have not updated and modernised this infrastructure?
There is a very simple solution to this problem, its "Kick up the bum time!" the government caps the maximum monthly rate for copper lines on a decreasing scale over 10 years to £1 a month token payment for "historical infrastructure". You want to bill silly money a month then you have to update infrastructure to fibre, quicker you do it, quicker you get money from the fibre lines.
That way you might have infrastructure that is capable of delivering the football and other sports rights you seem to have a magic money tree to fund.
The data networks are natural monopolies, as are train networks, water and swage systems, etc etc.
So it is not a good idea to make them private, unless you plan to personally benefit from the deal.
As for the companies to invest.. why would they? the more money you put into the network, the more data you will have to deal with.. and a similar amount of money.
You only compete IF the other companies are giving a better service.. and with the services being what they are in the UK, it just makes no sense.. there is almost no competition and they are all ok with that.
And also fiber to the cabinet.. bolody stupid. It is cheaper (yes, CHEAPER) to put fiber to the home.. but hey, somebody wante to reuse aluminum cables that should have been thrown away long ago.. to save pennies... and now we are all stuck with useless vdsl and assymetric connections, that are no good for using SAAS clouds.. and that is the future.
it is cheaper (yes, CHEAPER) to put fiber to the home
Not if you want more than just data service. For standard phone service you need either copper as well, or extra equipment, UPS, etc. to maintain the same level of availability.
Yes, of course, you can shove fibre alone in and tell people that they'll have unreliable phones that won't work in an emergency, but that's an apples vs oranges situation. Some of us need the reliability of POTS lines.
As for the companies to invest.. why would they?
Wow, you really know nothing of the UK's model of economic regulation, do you? Monopolist companies invest because they have to, as part of their licence to operate, and the targets are set by, and monitored by sector specific regulators.
Funnily enough, the reason why government privatised the water industry was specifically because when owned by the public sector, the industry had been cash starved for many decades (by both main parties), at the same time as the various governments signed up to expensive new water quality standards. The only reason those standards were met was because of the private sector investment to make it happen. In the ten years I spent working for the industry, it invested something of the order of £30 billion. And if they didn't meet the investment and performance standards they got fined by the regulator, if they didn't meet the quality standards they got prosecuted and fined by the Drinking Water Inspectorate or the Environment Agency.
They can just fire up the printing presses like they did to stop house prices collapsing further in 2008
I think the economy is sufficiently Ponzi-like enough already, don't you? We could do a whole lot more by printing even more money, but as Callaghan found out when he had to ask the IMF to bail out the British economy in 1976, that doesn't end well. Or we could not invite the IMF to bail us out, and go down the Weimar route.....
Other questions would indeed be is this for the towns or everywhere?
And seriously they only roll out to individual subscribers who ask for it at present?
Are you f**king kidding me?
BTW IIRC all UK homes were wired up with 3 pair cabling. IOW all UK landline subscribers could have 3 lines into their homes (from the same exchange) provided they were still in working order from the day their first phone line was installed.
So forward deployment was not unknown at BT.
On what?
- the current wholesale line price (so a near doubling of this)?
- the current ADSL line charge?
- the current FTTC line charge?
- the current FTTP line charge?
Given the cost is to "consumers", does this figure also take account of ISP markup?
I susect given the audience (ISPs) that the numbers are on the wholesale pricing and not retail.
Collins claimed that by Openreach’s own analysis, if alternative operators build competing FTTP networks, potentially using Openreach ducts and poles, the economic case for Openreach to deploy FTTP in the same area "is weakened considerably”.
Disagree, BT/Openreach in this communication have effectively aligned their interests. So the economic case for Openreach to deploy in an area with a competitive FTTP network is whether Openreach stand to gain business from the 580 ISP's who act as resellers. Now if the alternative operator also had an access obligation so that they had to allow other ISPs to piggyback on their network then things might look different. This is because as we already know, the majors aren't selling pure broadband they are selling their blend of quadplay services.
Also if BT/Openreach engineers (or certified engineers) have to be used, there is nothing preventing BT from also laying fibre for it's own purposes...
And it's copper users who are paying for it.
I'm on a 16Mbit copper ADSL but 20 metres down the street, they get 80Mbits FTTC and they pay 2/3rds the price. And BT said they are not upgrading my address for the foreseeable future. (even though its the only cabinet in town that's left to upgrade)
If I get less bandwidth I SHOULD PAY LESS.
We provide ADSL/FTTC services to about 50 of our customers. Being based about 20 miles away from London, we are finding plenty of places where services are so bad that the customer's only realistic solution is to move their offices. We as a country need to stop fannying around and actually get something done. At the moment we are trying to run a 21st century network (internet) over 19th century technology (copper). We should aim for full FTTP country-wide and cancel meaningless train infrastructure upgrades. Imagine the number of jobs it would create, and the benefits of universal fast connectivity.
>At the moment we are trying to run a 21st century network (internet) over 19th century technology (copper).
Actually, it is worse...
Once you lift the rug, you'll realise that the topography was intended to serve a very different population distribution and was limited by the (analogue) technology then available. With the fibre deployment (FTTC/FTTP), we've ossified this obsolete topography in our new digital infrastructure.
I've seen this in my area where despite the massive increase in housing, BT with the BDUK project, effectively replicated the copper topology (hub-and-spoke) rather than use the capabilities of fibre and create a new (digital) fibre loop/ring that covered the area more efficiently and effectively.
Does anyone remember 28k modem connections and the transition to 56k? Or how Freeserve changed the cost of dialup services? We now have broadband speeds of 1MB, 10MB, 100MB and nobody looks back and says faster speeds haven’t been beneficial.
Just like the new global positioning satellite network, faster Internet access is an enabling technology. But the market is fragmented by the haves and the have-nots. The government needs to lay down a public utility standard - that says fibre to every premises that has an electricity supply within 5 years.
A technology business that delivers services that benefit from faster internet connections is not going to be interested in investing if only 1% of the country can use it. We need a universal standard and the performance has to be improved.
"The government needs to lay down a public utility standard - that says fibre to every premises that has an electricity supply within 5 years."
Good idea but your post seems to have been truncated. I don't see your plan for achieving it, where you're going to recruit the army of workers to do this, where you're going to source the materials in that time frame, where you're going to raise the money and how much the customers are going to be willing to pay you for the interest you're going to pay on the money you raise.
We're on about 8MB with VDSL in mid-Wales (several miles outside Lampeter. I was intrigued to notice signs on the telephone poles saying "Fibre Overhead" a few months ago. I had assumed the thicker wires were some form of upgrade, but didn't expect Fibre along these narrow country lanes. Sadly, the job seems to have stalled - there have been neatly-wrapped loops of cable hanging from several poles for about 3 months now. And they're still a few hundred yards from our house anyway....
I currently pay £54/month for Zen's Office product, just so I can get the 832Kb upload. They have a fibre package starting at £33/month. I would gladly pay an extra £70/month for fibre, never mind an extra £7.
When all you can get is an "up to 8Mb" service, price is largely academic. It's access to the service that matters.
There's many developments (new build estates) that were started prior to Openreach installing native FTTP to the rest of the development that have houses connected via copper.
A cheaper way would be to allow people like myself who live 10m from an FTTP aggregation node and 20m from a splitter to order FTTP... but alas I've been informed from multiple people that because I'm already served by FTTC (unstable at night) that I can't.
The equipment has already been installed and they've made use of the existing ducting to connect the node to the exchange. All that remains is to run fiber through the duct to the houses on copper and install a cp in the premises, possibly add some more splitters further away.
I'm really struggling to see why they won't go for the low hanging fruit.
>I'm really struggling to see why they won't go for the low hanging fruit.
Suspect they will: there are many recent developments - prossibly all those of 20+ houses within the last 10 years where the cable mandated by Openreach included a fibre core to each property, only the developer only did the minimum and connected the copper pairs - most probably because at the time that was all that the local cabinet/exchange would support (aside: for my house I dug down where the BT cable comes out of the ground next to the house and there in the pipe/duct is a coil of fibre. The house was built in 2003, we got FTTC in 2015...)
> It will cost BT / Openreach 6-7 Billion and they should be using their PROFITS to fund it.
I take it that you don't really want FTTP anytime in the next 7 years?
Personally, I would rather pay a little more for a fixed period of time to enable the wholesale migration of the BT local loop (and exchanges) to fibre and thus start to benefit from the lower maintenance costs of fibre sooner than letting BT fund the project wholly out of profits (£500m~£1Bn pa ?) and have to incur the costs of maintaining the copper infrastructure for longer. And then continue paying an 'investment return' to BT for a few decades...
To be honest, although I benefoit from full speed VDSL Infinity, my main issue with slow internet is
- Some old Wireless G devices
- Slow response from destination sites, often linked to aggregation and real-time rendering of pages linking disparate stuff from analytics companies, advertising, video's and other tracking data being scraped off my device back upstream
The speed of the Internet connection at a long term trend (according to my Sam Knows Whitebox) of 58MBit/s seems to be the least of my worries.
I don;t see FTTP making it any faster, other than for the wait.
I'm one of millions of people in an area served by Virgin Media cable, and no Openreach Fibre - not even fibre to the cabinet. They are not incentivised to connect these areas, so there's no competition, and Virgin can get away with poor service without losing customers. Really frustrating. My 100mb Virgin service is fast enough but I'd like a choice of provider.
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