Saturday, 23 January 2016

Broadbad or just bad?


So let's dive into this work of research that is Broadbad. Quotes from the paper in italics.

Page 8:

Key Findings

• Openreach has so far received £1.7 billion in taxpayer subsidies to connect harder to reach areas of the UK to superfast services, but has repeatedly failed to deliver

Openreach have not received £1.7 billion in taxpayer subsidies and have not repeatedly failed to deliver. They have received approximately £700 million according to BT's accounts and projects are ongoing. Openreach have delivered the coverage agreed almost universally in the timescales agreed with local authorities, and will continue to increase coverage under the Superfast Extension Programme.

• Around 5.7 million people in the UK have internet connections that do not reach Ofcom’s ‘acceptable’ minimum speed of 10Mbit/s. 3.5 million of these people live in rural areas. 

Not the case. The source material data was collected during May and June of 2015 so is out of date, and that same Ofcom Connected Nations Report states:

'Government programmes, such as those administered by Broadband Delivery UK (BDUK), are helping to address the problem of poor broadband coverage, particularly in rural areas. We would expect to see further improvements in rural broadband availability over the coming 2 to 3 years.'

This is more accurate and up to date.

• Poor internet connections are costing the UK economy up to £11 billion per year

Based on research from March 2015. I have no idea how valid that figure is, however it's not the job of private companies to spend money to increase UK GDP. The Conservatives privatised BT. Private companies have a responsibility to operate in the best interests of their shareholders. I'm sure we can find other industries that have cost the UK economy more and don't have MPs having papers written demanding their reorganisation. A number centred around the Canary Wharf and City of London area come to mind immediately.

• 42% of SMEs report experiencing problems with their internet connectivity and 29% also report poor service reliability.

Yep. The exact quote from the source material is the following:

'Our research has found that 42% of SME internet users had experienced issues with their internet connectivity in the preceding 12 months. Poor service reliability was the biggest problem, with 29% citing it as an issue, followed by slow download (16%) and upload (13%) speeds.'

Of course what is ignored is that reliability problems can be caused by wholesale providers and service providers, not just Openreach, as can performance issues, and that these are subjective measures. At what point will an SME complain about reliability? An outage every day? Month? Year? How do we know these problems are all the fault of Openreach?

• Following the announcement that BT will be merging with EE it has been calculated that BT will have a 40% share of the retail telecoms market and a 70% share of the wholesale market.

Separating Openreach from the rest of BT Group, as the paper demands, will have no direct impact at all on BT's retail market share and will potentially have quite the opposite indirect impact from reducing it. Free of the regulatory burdens involved with having Openreach as part of the group BT's retail arm may be free to more aggressively pursue market share. It is unclear what is defined as their share of the wholesale market as the source for these numbers isn't an Ofcom research paper, it's a Guardian article discussing Sky's and especially TalkTalk's advocacy of separating Openreach from BT Group.

• The time has come for BT to be forced to sell off Openreach to encourage more competition and a better service for every internet user and for the benefit of the UK economy. 

Strangely given this is apparently so self-evident there are zero specifics given as to how this would encourage competition and improve services; in fact the expected impacts of separation are given 2 vague paragraphs in a 22 page report.

The introduction of the paper mentions Mr Shapps being alarmed by complaints about broadband in his constituency despite its close proximity to London, because London is the centre of everything and so proximity to it should be used as some kind of measure in these things. Alongside this comes confusion over what a natural monopoly is.

The following merits quotation. Page 9 paragraph 2:

This report contends that Britain, the birth place of the man who invented the World Wide Web, Tim Berners-Lee, should be leading the world in digital investment. The Government and local authorities have now generously granted a total of £1.7 billion in subsidies to BT to deliver broadband to the harder to reach areas of the UK.

A noble aim and with that in mind government and local authorities have provided a 'generous' subsidy. Except that subsidy, actually £332 million from central government matched by local authorities at the time of the numbers in the 'Key Findings' section, though higher now hence my mention of £700 million earlier, looks somewhat less than generous noting France's £17 billion public-private partnership, Germany's E2.7 billion for 50Mb+, or Australia's £14.9 billion to cover a population less than 40% of ours for the NBN project.

Singapore spent £639 per premises on broadband subsidy to deliver fibre to premises in a city-state. Our spending relative to that is hardly generous.

It's extremely disingenuous to quote total subsidies available and criticise based on results when a fraction of that subsidy has been used to date while also ignoring that all the subsidy isn't going to be used as Openreach have already returned some of it.

Page 9, paragraph 3:

Britain should have the most developed digital economy in the world but is instead lagging behind countries such as Japan, South Korea and others. 

I could discuss at length why this is a ridiculous statement but we'll stop with a few simple facts. A far greater proportion of the populations of Japan and South Korea live in apartment blocks. In addition utilities in Japan and South Korea tend to be on poles. Those things that are considered to make places look 'third world' or become 'nineteenth century landscapes with overhead cables and wires.' but are really handy to string fibre optic cabling onto rapidly and relatively cheaply. Lastly there are more people in heavily densely populated urban areas in Japan and South Korea and their population densities overall are higher than ours.

We could, of course, focus on urban areas and delivering ultrafast services to those at the expense of leaving rural areas underserved for sure, delivering 1000Mb to many urban areas costs less per home than delivering 10Mb to some rural ones, but that would make complaints about the digital divide all the louder.

The idea that we should be at parity with these nations given the different factors at play and the level of public subsidy supplied thusfar is delusional.

Page 10 I will not comment on beyond to note that premises, not people, are the usual metric with regards to broadband coverage. Other parts are already covered elsewhere.

Page 11, paragraph 7:

As fig 1 on page 5 shows, vast swathes of the nation suffer from slow or even non-existent broadband speeds. A look at the South West of England, huge areas in Scotland and Wales and also the North of England show a nation plagued by poor broadband service.

These are sparsely or even virtually unpopulated areas. As a general rule operators don't tend to deliver copper and optical lines to places where there are no people. These aren't wireless solutions where people roam into the coverage, they are called fixed line for a reason. There's no fixed line broadband because there are no fixed lines to carry the broadband.

Page 13, paragraph 9:

It famously claimed in 2009 that 2.5 million homes would be connected to ultra-fast Fibre to the Premises (FTTP) services by 2012, which is 25% of the country. Yet by September 2015 they had only managed to reach around 0.7% of homes. 

http://www.ispreview.co.uk/index.php/2013/04/bt-abandons-native-uk-fttp-broadband-rollout-for-fttpod-and-fttc.html

Frustrating as it was that the FTTP was scaled back, and that same ISPR review notes that BT actually spent more than they planned to on greater coverage than originally mooted in 2009 alongside upgrading the FTTC from 40Mb to 80Mb, 2.5 million homes isn't 25% of the country. Believing this would explain much about Mr Shapps' rather unfortunate tenure as housing minister given that there aren't 10 million homes in the UK, but as of 2014 26.7 million.

Page 13, paragraph 10:

BT has also frequently been accused of abusing the natural monopoly it has over the nation’s network and not giving equal access to other internet providers

I can't comment on this as the link cited, http://www.reuters.com/article/us-britain-telecommunicationsidUSKCN0J70W420141123, doesn't work.

I've had what looks like the correct link sent to me. Those making the accusations are Sky and TalkTalk, so obviously zero chance of a vested interest there. The link also makes clear where the 40% consumer and 70% wholesale market claim mentioned in the earlier Guardian article was sourced. In this article it's a direct quote from Dido Harding, TalkTalk Chief Executive.

Page 14, paragraph 11:

Competitors, like Sky and TalkTalk, argue that the relationship between BT and Openreach further exacerbate the problems brought about by the current situation already being a natural monopoly. These other providers have to pay a wholesale price to BT to make use of the network and they then charge their own customers for services.

It should be noted those guys pay Openreach for the most part. This comment muddies the water somewhat by being unclear. I'm unsure what alternative arrangements there could be. Separating Openreach doesn't alter the 'natural monopoly' point, it removes vertical integration which is a completely different concept.

They have consistently argued that Openreach has little incentive to invest in upgrading the network and in fixing faults quickly.


They have little incentive because no-one else is investing. This is a failure of the UK's broadband market and the the business case for building ultrafast broadband networks here. Separating Openreach isn't going to change this, they will still have no incentive to upgrade or fix faults more rapidly as it won't introduce competition to Openreach; they remain a natural monopoly until someone steps up with an open wallet and willingness to wholesale the network they build.

Page 14, paragraph 12:

Logically this means Openreach has little to gain from improving the network. At the moment the infrastructure is largely a copper network, meaning it is outdated. BT has made much about a new technology it is introducing, G.fast, that it claims will enhance the performance of the existing copper network, using better signalling kit to push more data into the wires. The obvious criticism to make of this approach is that BT are merely trying to eke out what life there is left in an outdated network system instead of planning for the future and upgrading to a fully fibre network

It's believed approximately 50% of BT's spend on G.fast will be re-usable for a 'fully fibre network', just as a proportion of their spend on FTTC is reusable on G.fast or a full fibre network. This is just-in-time capital expenditure. Virgin Media in common with other cable companies are doing the same.

Page 15, paragraph 13:

BT has so far received £1.7billion in taxpayer subsidies to roll out superfast broadband to harder to reach rural areas. Ministers have done the right thing by wanting to connect up these areas but were
badly let down by the regulator and BT. The push should be for stronger, more competitive networks. 

As mentioned above BT have not received £1.7 billion from the taxpayer. This was not specified to cover harder to reach rural areas, that was down to local authorities in co-operation with BT to decide. This programme was nothing to do with Ofcom. I have no idea what is meant by 'more competitive networks' that seems like a bit of 'buzzword bingo'.

Page 15, paragraph 14:

Openreach generates 50p in earnings before interest, tax, depreciation and amortisation for every £1 of revenue. No other telecoms companies, such as Virgin or sky, are in receipt of such generous subsidies. Yet 48% of rural homes still don’t have internet that Ofcom would describe as merely acceptable. To make matters worse, there are still large numbers of homes who cannot even reach speeds of 2Mbit/s. This means they are unable to make use of online services like music streaming or catch up TV sites. 

Use of EBITDA is a gross simplicity at best, it also ignores pension deficits and indeed that some of Openreach's pricing is intentionally held high by the regulator in order to try and encourage others to build competing networks. The performance figures are out of date as noted. To be quite frank it looks as though someone ran through the Digital Comms Review and picked out bits that were 'on message'.

Page 15, paragraph 15:

BT benefits hugely from these subsidies. They get to spend the money given to them and will own the newly created infrastructure afterward. This effectively means the UK taxpayer is subsidising BT owned infrastructure through Openreach that they will then profit from. BT have also recently been caught in a scandal where it was found that £1.7 million of Openreach revenues had been used to fund the recently approved merger deal with EE, leading to a censure from Ofcom. This raises renewed questions about the takeover and has caused further worries for competition, compounding the problems that already existed over Broadband. It means that BT now has a 40% share of the retail telecoms market and a 70% share of the wholesale market.

The funding is gap funding. It specifically provides the amount of money in between BT's normal 'commercial' spend and the actual amount required to service the subsidised properties. The above comment ignores that there are clawback clauses in the subsidy contracts, worth £129 million as of July 30th, where sales of the subsidised superfast broadband have meant a smaller subsidy than originally provided was actually needed.

Other than the governent going back into the telecomms industry what was the alternative?

As previously noted I have no idea what the retail numbers have to do with divestiture of Openreach, and no idea what the share of the wholesale market refers to given its source is a Guardian article.

Page 17, paragraph 16:

The UK broadband network is largely made up of incredibly outdated copper wires. This technology may have been cutting edge when it was first installed, but today it sees us lagging behind other leading economies, such as Germany, Japan and France. It is frankly alarming that London’s Tech City has some of the worst broadband speeds in the country.

The UK has higher availability of Superfast broadband than Germany or France.

BT are apparently addressing Tech City, however I would ask why BT are expected to service Tech City and no-one else? If the demand is there and it's a viable investment why hasn't anyone else stepped in to deliver the products? BT aren't the only company capable of delivering broadband. There is nothing beyond the UK's regulations, costs of deployment and the willingness of companies to pay stopping others.

http://www.itpro.co.uk/broadband/25271/bt-answers-tech-city-demand-for-more-fibre-in-london
http://www.v3.co.uk/v3-uk/news/2425505/bt-plans-tech-city-fibre-broadband-rollout-expansion

Page 17, paragraph 17:

BT’s approach to the need for faster broadband is to resort to G.fast. This technology makes use of more intelligent signalling kit to push more data through the existing copper wires allowing for the upgrade to ultrafast internet. This should allow for speeds of between 150Mbit/s and 1Gbit/s. However, it can only achieve speeds at the higher end of this scale in limited circumstances and that pure FTTP cables would be needed to guarantee these top speeds. Rather than acknowledging the need to comprehensively rethink their broadband investment strategy, they are instead effectively postponing the decision and trying to strain every last bit of profit they can from the outdated and struggling copper network. Whilst G.fast will increase speed for some it is a reactive measure, a short term fix that won’t address the long term need. 

Just-in-time CapEx is a legitimate strategy. G.fast as noted earlier will push fibre deeper into the Openreach network with approximately half of the spend being re-usable on deploying fibre to homes.

It is not considered a long term fix any more than FTTC was considered a long term fix. The G.fast range of speeds is considered ample for the foreseeable future. If BT offer the option of 1Gb via FTTP on Demand at more competitive prices as would be expected given G.fast pushes fibre much closer to customers that will serve 'power users'.

Page 18, paragraph 18

What is needed is the acknowledgement by BT that the network needs to be converted to all fibre throughout.

Openreach are aware of this, however they would disagree with the timescales posited.

Demand for broadband is forever increasing throughout the UK as more and more people rely on digital services for work, entertainment and day to day living.

Yes it is. This is actually showing signs of slowing down though as the major driver, video, becomes more efficient and reaches ubiquity. 

By making the jump to an all fibre network we will be following countries like Japan, South Korea and even Spain. Ofcom have shown that as consumers get better download speeds, they consume more data.

Virgin Media's experience indicates that the higher the speed before upgrade the lower this increase. Very much a case of diminishing returns as people do the same things but more quickly.

Incidentally what's the big driver of FTTP in Spain? Competition. Telefonica didn't need separation, just a third party to come in and invest rather than relying on them to deliver everything and complaining about the manner in which they do. That and of course that while Ofcom require BT to allow access to all their products on an equal footing, Telefonica didn't have to wholesale anything over 30Mb. If you wanted to sell >30Mb in Spain you had to build your own network. Perhaps a reason to blame Ofcom and the obsession with retail competition that has allowed ISPs to avoid investing in their own networks as they can compete just fine with BT's own retail operations while having BT bear the risks of investment.

Whilst in the short term most users could make do with speeds that G.fast is capable of providing, this is hardly a compelling argument for the status quo. Demand will keep increasing and it makes sense now to invest in future proofing the network, not papering over the worryingly large gaps.

Neither is it an argument for separation of BT Group, and it does not by default make sense to invest in future proofing the network as this assumes all cash is on-hand and the investment doesn't amortise, which is wrong. BT would have to borrow, have to pay interest on the borrowing, and be writing down the investment.
















Paragraph 19 I'm not going into depth on. Business parks tend to be passed by because there are few premises there so harder to make the economics work to deliver broadband to them. Repair and install times are below par, no question, but hopefully improving. There's no reason to think separation will improve these factors as it doesn't address the natural monopoly scenario. I've discussed the dissatisfaction above.

Page 20 paragraph 20 has no real content to discuss.

Page 20 paragraph 21:

This report considers that there is only one real option that would satisfactorily address the Openreach question; the structural separation of BT and Openreach. This means BT would be forced sell off Openreach so it becomes entirely separate company. This would directly address the current reasons BT has to discriminate against competitors. As well as this it would also increase Openreach’s incentives to invest in the network and improve on their issues with performance and customer services. 

I do not see any explanation why such an action would increase Openreach's incentives to invest in the network or improve their issues with performance and customer service, They would remain the 'natural monopoly' discussed above, able to continue to behave in the manner of a monopoly.

BT Wholesale would remain their largest single customer, BT Retail the largest customer of BT Wholesale and hence there would remain a perfectly legitimate chain of influence between supplier and their largest customer. This report has presented no instances where Openreach are discriminating against other customers in favour of BT Wholesale. Openreach do not deal directly with BT Retail. There is no reason to believe Openreach's deficiencies are not affecting all customers equally.

Page 20 paragraph 22:

This report believes that formally separating BT and Openreach into two fully separate companies would be of immense value to the UK digital economy. The current model actually constrains BT. It makes perfect sense for BT to favour the status quo and underinvest across all the broadband services it provides through Openreach. It has a ‘natural monopoly’ and severely restricts proper competition. This hurts all internet users, as well as the wider UK economy. The current arrangement is a hangover from the days of nationalised businesses.

This reiterates paragraph 21 and is equally lacking in detail. As previously noted the report confuses natural monopoly and vertical integration.

I would suggest that, rather than freeing Openreach to invest separating them from the rest of the group leaves a for profit company directly at the behest of shareholders who will be wanting a return on their investments. For them spending as little as possible would likely present the best possibility of returns, as with the status quo. In the absence of commitments from third parties to invest, and I would point out that of the two loudest 'voices' in this discussion one doesn't have the funds to invest and the other has steadfastly avoiding committing to do so, I see no reason why separating Openreach from BT Group would have any short or medium term impact other than to ensure Openreach do not invest in their network.

Page 20 paragraph 23:

Under the proposal in this British infrastructure Group report, Openreach would operate as a totally independent company, no longer tied to BT.
Repetition.

By opening up to competition it would ensure that Openreach could turn to investing in the future and focus on digital innovation.

I am still completely unclear as to how separating Openreach would open anything up to competition. They remain a natural monopoly, they aren't going to be bidding against anyone else for use of their own copper and fibre assets. If suppliers wish to reach customers connected to Openreach's network they will have to pay Openreach to do so.

The only way to compete outside of some business areas with Openreach is to build a new network, and then allow wholesale access to that network. The only alternative network of any scale going to homes and businesses in the UK belongs to Virgin Media and is a closed network, no wholesale access.

BT's labs have a long history of innovation, and Openreach are at the forefront of G.fast, a technology that telecomms operators worldwide are planning to use in a variety of ways.

Rather than having to obey the orders of BT it could search out long term investment and partners for itself. It could seek this from all manner of sources, such as pension funds, and open up the market to greater competition. Meanwhile real competition would force the pace of investment to increase as companies would not be able to rest on their laurels and compete for custom by offering better speeds and cheaper deals.

Rather than having to obey the orders of BT it would have to obey the orders of profit-motivated shareholders.

Again what competition would force the pace of investment to increase? Openreach aren't going to compete against themselves and suppliers will only be able to offer the speeds the Openreach network delivers them at the prices that allow them to make a profit while paying fees to access the Openreach network.

The only way this could change would be for Openreach to allow access to all of their ducting so that others may place their own fibre in it and indeed for Openreach to replace the copper in there with fibre where others don't want to leaving suppliers to add the technology either side.

This would involve Openreach spending tens of billions over several years to make their current copper, FTTC and FTTP networks redundant and lose all of their current revenues in favour of becoming a dark fibre supplier to homes and businesses. Who is going to invest in that on a nationwide basis? The losses in ultra-rural areas would be immense.

The complication of deciding who has to fix what and who pays if there is, say, a fibre break affecting an Openreach owned duct with multiple suppliers' fibre inside it a genuine overhead. If in doubt are Openreach to pay for everything? Is this to be the attractive business case to institutional investors that will ensure money pours into Openreach or is it far more likely the business would end up run down, even more poorly performing, and potentially asset stripped where feasible?

To avoid all of this would require way more regulation than there is currently. A strange thing indeed for Conservative MPs to desire.

Page 21 paragraph 24

Unless BT and Openreach are formally separated to become two entirely independent companies little will change. They will continue to paper over gaping cracks. Whilst rural SMEs and consumers are left with dire speeds, or even no service at all, Openreach makes vast profits and finds little reason to invest in the network, install new lines or even fix faults in a properly timely manner. The time has come for a bold and comprehensive solution, full separation and deregulation will provide that solution. 

A lot has changed, some of it for the worse, some for the better. The only way to prevent extensive unintended consequences as a result of full separation and deregulation is to renationalise Openreach. Anything else leaves that company, and the UK's telecomms infrastructure, beholden directly to investors whose main concern will be profit and loss. Deregulation opens up another level of unintended consequences from preferential treatment for profitable urban areas while rural areas see poorer service as there is no profit in serving them equally through to predatory pricing in those areas where there are competing networks.

Does a Conservative, or any other, government have the appetite to renationalise Openreach, taking on the prodigious pension deficit, in order to spend tens of billion reducing its revenue stream?

Note: This article is copyright - if you want to use it please ask.

Changelog:

25th January 2016 - added new paragraph with apparently correct Reuters link; corrected typos, tidied up formatting issues.

37 comments:

  1. Wrong link may be http://www.reuters.com/article/us-britain-telecoms-idUSKBN0M81U220150312

    ReplyDelete
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    1. Thank you on both counts. So the 40% retail, 70% wholesale market claim is a direct quote from Dido Harding. No chance of vested interests there, then.

      I've amended the article accordingly. Cheers.

      Delete
  2. Good stuff, It seems to me that the gov. believe 2 things...
    1) OpenReach isn't doing its job properly and this is hurting the UK economy.
    2) Competition is the answer to making private companies perform.

    Now if we accept that both of these facts are true (thats a whole further level of debate!) Then separating OpenReach from BT doesn't create any new competition, there is a still a single (dominant/majority) supplier of fixed infrastructure on a wholesale basis. What we need is competition to OpenReach, as the report states the only other company with similar infrastructure is Virgin Media,
    Here's a radical thought, why not require Virgin to operate their infrastructure on a similar basis, perhaps the company should be called 'ReachOpen' then ISP's would have a genuine choice of 2 retail suppliers and we'd even have a choice of differing technologies for the physical layer.
    Obviously as ReachOpen are being made to play by the same rulebook as OpenReach they would be entitled to a similar share of subsidies etc.

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    1. This scenario is exactly why Virgin find the idea of a separated Openreach chilling. They would think they are next.

      Mandating wholesale access from Virgin is a step away from reproducing the Australian NBN model, which may as well be done if going this far.

      The legal wrangles would be horrendous. Rupert Murdoch would love it, though. Access to 2 sets of broadband networks built by others for billions and zero risk to Sky.

      Delete
  3. Well done -there is a lot of heat and light in this debate but precious little of this sort of analysis. People's desperation seems to be making them grasp levers without working out what they will do. For ending vertical separation to work, there has to be an incentive/possibility for the customer (BT) to find another supplier of network services (not Openreach). It's hard to see who that would be, especially given BT's conviction that alternate technologies don't stack up. It may be that separation could change this view and make a market, but it will take some time and isn't a one bound and we were free solution. working on/with an altnet radio solution for local broadband right now, competing infrastructure does indeed make BT edgy. But we all have to buy services from Openreach at some point or other, given their presence in the market especially at the network fringes ,where there are precious few other operators, except bits of the state (army, prisons, airbases, schools etc).

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    1. B4RN doesn't buy from openreach, there is dark fibre about. Gigaclear use it too. We need access to more of it, more altnets. Competition is the only way to get a truly digital britain. We could do with a regulator. ;)

      Delete
  4. 'We need access to more of it, more altnets.' I don't understand what you mean. Who is the we and where is it that you would access.
    If there is such a demand why aren't altnets covering the country? Maybe because of the cost of getting into a property and having a sound business case for an area. Plus if many are receiving a reasonable speed it's a difficult sell. Particularly with bundles on offer and eg. TalkTalk 'free' FTTC.

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  5. I think you do understand Somerset, but for the benefit of any other reader I will answer. There aren't many altnets because the funding was engineered in such a way that only BT could get the contracts. Subsidising a monopoly seems weird, but that is what the councils did, supported by government via BDUK. This has enabled them to cherry pick lucrative areas which are now receiving a 'reasonable speed'. This doesn't help the business plans of altnets, but suits the monopoly down to the ground, and the ones left out can just have satellites from their partner companies. It's all in the plan. Once they have got their pensions sorted out, and sports rights stitched up, and control of the mobile market, they'll happily split openreach off and let government pick up the pieces. They won't do it yet though, there is still plenty of money to make out of copper. The fact that it is throttling innovation in the country doesn't matter to the shareholders. The only thing that will shape it all up is sacking off the copper and building a proper fibre network. They are hampered in this by government regulations and the POTS USO. I think we need a regulator. ;)

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    1. Subsidising a monopoly/incumbent is what's been done worldwide.

      Governments have a duty to taxpayers not to take risks.

      Look at SYDR or other examples where alternative networks have gone wrong.

      BT have the resources to ensure unexpected events can be managed.

      Of course the bidding process was designed to favour BT or another very large corporation, however in the absence of other bidders BT Were the only option.

      They have, for the most part, delivered as required, too.

      Delete
    2. Just because something is done worldwide doesn't make it right.

      Yes, government have a duty to taxpayers, and they shouldn't take silly risks, but we would all think the world was flat and the moon made of cheese if some men of grit hadn't taken risks. And the duty of care doesn't extend to wasting taxpayers money on obsolete phone lines and branding it as 'fibre broadband' even if it only delivers dial up.

      Altnets have the resources to ensure unexpected events can be managed, and it is easier for them as they have modern infrastructure and not tons of corroding old copper to manage.

      The bidding process was designed by BT and effectively stopped any other bidder large or small so yes, it was fixed so that BT were the only option.

      The have delivered what they intended, which isn't what was asked for. The government in the absence of a regulator has been sold a donkey, marketed as a racehorse. FTTC is a stop gap, Gfarce is even more of a patch up, and unless we take the bull by the horns and do the job properly we'll quickly become a third world digital nation. I am all for thrift, and make do and mend, but in the case of our digital infrastructure it is past the point of repair. We have to move forward and enable every citizen to have a futureproof connection, and copper can't deliver that, and satellites are a joke. Far better to do real fibre to every home than a fast train for a few brummies.

      Delete
    3. 'Altnets have the resources to ensure unexpected events can be managed'

      Unfortunately no, they all do not.

      http://www.ispreview.co.uk/index.php/2015/10/fibre-garden-calls-a-halt-to-rural-cumbria-fttp-broadband-project.html

      Even your own project was made viable thanks to the good will and work of volunteers and those working for payment in kind. A similar project being done by Gigaclear on a state aided basis can, with a little maths, be extrapolated to indicate that B4RN saved at a bare minimum £600 per premises passed.

      The Gigaclear Windsor and Maidenhead project is costing between £19 million and £20 million to pass 11,700 premises, that with their far higher economies of scale and higher density areas than your own.

      Altnets can't always rely on the kind of community engagement B4RN have or assume that uptake will be high any more than BT could have assumed that FTTC uptake would hit the levels it has in my local area. You really can't extrapolate your experience nationwide. It's a wonderful project but has a ton of factors in it that can't be banked on.

      FTTC is a stop gap. Openreach are as aware of this as anyone else. They are as the blog mentions doing just-in-time capital expenditure. For accounting and interest payment reasons this works out cheaper.

      Again per the blog G.fast is also a stop gap and Openreach are aware of that too, as are the rest of the industry, however ~50% of their spend on it will be reused and in a number of cases it will put fibre very close to individual premises.

      Something that's often ignored about FTTP is the cost of getting the fibre from the street to the homes. That's a massive cost. Think about the variety of properties that have to be dealt with, from the easy gardens that can be effortlessly trenched through to solid concrete / stone driveways that need full-on civils.

      You're absolutely preaching to the converted with your criticisms of FTTC and G.fast but everyone is quite aware that they are stop gaps and patch ups.

      As long as BT do deploy FoD 2 alongside G.fast so that those who want the FTTP can have it, it should be a reasonable balance between commercial viability and getting the capacity where it needs to be.

      We'll see.

      May I take a minute to congratulate you on your project's success and on the Honour your rightfully received for your hard work, time and dedication.

      Thank you for taking the time to comment, Chris. You and I rarely agree but it's always a pleasure to converse. If you wish to cross-swords in 140 characters feel free to unblock me on Twitter :p

      Delete
  6. Thanks Carl, we often agree but you have never usually agreed so much in one hit! I have to disagree that 'everyone' knows FTTC and Gfarce are patchups. Ed Vaizey and snake oil Bill are proclaiming in every press release in every county that they are massive successes and are fibre broadband. This is an outright lie, and if we had a regulator it would not be allowed. If we had an ASA it wouldn't be allowed either. They neglect to point out that not all the customers connected to the cabinets attain the highest speeds, nor that it is highly contended, especially by the cheaper ISPs providing 'open access' - which again is a standing joke.

    The cost of getting fibre to the homes is affordable by us and gigaclear, even through concrete and tarmac. Some of our houses need digs over a kilometre through rocks, gullies and streams, that is far harder than a bit of pavement where you can connect 100 in one hit. So don't try to pull that one. It is therefore even more affordable by a company that already has wayleaves and access to every home in the country, a work force in every area of the country, and the best engineers in the land. It is only the OR management, the monkeys at the top of the tree that are doing this irreparable damage to digital britain. If OR can't lead, if it isn't prepared to follow, then it should get the hell out of the way and stop all this hype.

    If the retired people of B4RNland can build a gigabit network for £30 a month, from scratch, then what does it tell you about Openreach with all the technology, staff, accounts, lawyers, equipment and engineers at their disposal? What is the matter with this country?

    Yes it is good to exchange opinions, but we've both found 140 is not enough, and it leads to misunderstandings. A blog is far better, and it will stand the test of time, as have all the blogs since 2008 when this superfarce started. These are the history books of the future, and copies are made and stored so the Emperors of this world will see that they were fools to be dressed by the greedy tailor. Poor Ed, he thinks he has an ermine mantle, but the only thing covering his modesty is a copper penny.

    Keep rocking Carl, we all do the best we can with what we have.
    ;)

    ReplyDelete
    Replies
    1. Chris, there are so many issues about some of the things you say that it detracts from the good points.

      Firstly we all know that FTTP to every UK property would be ideal, but why do always resist discussing the funding?

      Personal abuse never works, similarly with distorted words.

      The key issue is about improving the speeds for as many as possible as quickly as possible. FTTC achieves that and brings the core network close for future FTTP. Or maybe that will be overtaken by a wireless system. We use wireless extensively in our homes, connection to the outside world will come in time and then we won't need a fixed link.

      Meanwhile this village has 46 spare fibres from the big town ready for anything we dream up. Where is the business case for installing FTTP to 500 properties? What would 1G give that 80M does not, other that the vague 'future proofing'.

      If TalkTalk can sell broadband for £0 + line rental where is the return on the investment for providing FTTP?

      It's good to talk!

      As with Carl, please unblock me from Twitter.

      Delete
    2. Something that needs to be remembered - Openreach are probably already selling products to the areas you want them to deploy FTTP to. The business case has to be based on the extra income to them.

      In the case of the 40Mb/10Mb package that is the most commonly used one by those in their FTTP areas that extra income is a princely £7.40 a month.

      Takes a while to make back £1k+ per premises passed at that rate even if uptake is high.

      Day job calling again.

      Delete
    3. Carl,

      You're keen to tell us repeatedly that you have no professional connections to BT, nor to any of its partners.

      And in Cellan-Jones' puff-piece for BT, he described you as an "an IT specialist and superfast broadband campaigner".

      [Which is more than you've ever divulged about yourself.]

      So why not just tell us who you *do* work for; the relevance of your work to the telco (if any); and let us judge your claims on that?

      Delete
    4. Let's discuss the facts about broadband options and not get personal. Should the government fund a 100% FTTP rollout? The complication being do people mean replace the VM copper as well, should all connections wholesale etc.?

      Delete
  7. What is your village doing with its spare fibres to help those on long lines still stuck on dial up Somerset? or will they not give you access to them? Or do all your homes reside next to the cabinet? or, seeing as you are ok on your upto 80Mbps do you just ignore those on sub meg out in the sticks growing your food around your village?

    I don't do personal abuse, you know that, and Carl knows that. Unless you call ridiculing Ed is abuse? Well I guess I do abuse then. Poor Ed, I do feel sorry for him at heart though, he's a likeable chap. Shame his advisors give him all this PR fluff and he falls for it. He should be minister for something less complicated that doesn't involve physics.

    Big isps should be able to do free broadband, its the line rental from the monopoly that is the largest portion of the fee, and if they can negotiate a cheaper one by buying in bulk they can make their profits on that.

    copper broadband should never have had to cost much because the infrastructure for it was paid for decades ago. The key issue, which you seem to have missed, was providing an nga solution for those without access, not making a few go faster.

    You have been told the price of deployment of ftth many times, and on many other blogs, all of which have been recorded, so stop astroturfing every time you find someone standing up for getting a robust, affordable and futureproof solution for every citizen. (Not just for those who can make a profit for a company who is only interested in profit). The funding for digital britain was meant to get a connection to those who weren't profitable. It wasn't used for that. Its been used to cherry pick areas that could have made a profit, hence the clawback kicking in. It should have been used by altnets. They would have provided the competition. Everywhere B4RN has deployed fibre, two OR cabinets have miraculously appeared with fttc. Areas that OR said were not economic ie hamlets of 20 homes suddenly deserve miles of duct and a pcp as well as an fftc cabinet. Nothing short of a miracle huh? So where is BTs extra income coming from when all our houses have a gigabit symmetrical for £30 off B4RN, who the hell is going to pay more for an inferior upto service from anyold ISP and an asymmetrical service at that?

    ReplyDelete
    Replies
    1. Is this of interest?

      http://www.thinkbroadband.com/news/7325-bduk-opens-consultation-on-new-and-improved-procurement-process.html

      I don't understand what you mean by access to a fibre. It's all about end-to-end circuits.

      Would be good if you have a link to FTTP deployment, I thought ~£20B came into it.

      Sad thing is Mrs Thatcher stopped BT deploying fibre for years so the altnets had a chance.

      Delete
    2. Which one of those options will your village do to help the ones on the outskirts on long lines get a decent connection Peter, or can they eat cake? Now the lucrative areas have 'superfast' it is even more difficult to help the rest. That is why the whole thing is so wrong. It is up to the government and regulators to make it right. It is the government who stands to save the most money when everyone has decent access and not just a stop gap solution as we have now.

      Delete
    3. Another review!

      http://www.standard.co.uk/business/nick-goodway-putting-openreach-on-the-right-lines-is-a-job-for-bt-a3165356.html

      Delete
    4. Thinkbroadband doesn't really have much credibility. Quoting any of its "research" flounders for that reason. Like the ispreview and kitz websites, it's just another venue for BT astroturfing.

      BT even plants its all-belching, all farting Openreach engineers on these forums; one of whom posts regular Press Releases from his Chief Executive! Clumsy corporate propaganda, which he floats out as "Just for your information" ! Much more the PR flunkies than ever they were engineers!

      Okay most of these forums make nominal criticisms of the incumbent - but only to buy themselves some cover or credibility - but otherwise they're fully "onboard" with BT's plans and policies. Just more PR output holes. What was it Lenin once said? "The best way to control the opposition is to lead it ourselves". Isn't that what these "independent" telco forums are all about? Isn't that why we find them all rallying now to BT's defence?

      Tell us, Carl - since you're clearly closer than most to BT - it's been said that the telco employs full time lobbyists in the Palace of Westminster.

      Company insiders planted there to "help" our MPs reach the "right" decisions when it comes to legislation affecting the telco.

      Exactly how far does that political lobbying go? Are we talking about Brown Envelopes? Covert meetings in the Commons' lavatories? Wining and dining our irrepressibly honest representatives, at private luncheons? Flight-tickets to all-expenses-paid telco conferences in exotic overseas venues?

      As Private Eye often jokes: I think we should be told. Who are these BT lobbyists? What are their names? Are they employed directly; or through third-parties? How and why were they ever granted access to Westminster's corridors of powers, when neither you nor I enjoy that extraordinary level of influence?

      Delete
  8. https://uk.pinterest.com/pin/126734176992280152/ Gfarce. Benoit exposes the myths if you care to watch his short presentation.

    ReplyDelete
    Replies
    1. If separation were to happen how would it, would the existing BT shareholders receive 2 new shares, valued appropriately? With OR a separate company how would that move FTTP forward? Still the issues of duct capacity, ROI etc.

      Given it might take 2? years to achieve it by then the second phase of BDUK will be nearing completion, more wireless, more altnets, more BT FTTP, we need to clear on the benefit.

      BT comment just seen! - http://www.telegraph.co.uk/finance/newsbysector/epic/btdota/12123512/BT-is-the-champion-of-fast-broadband.html?WT.mc_id=tmgoff_pq_tw_20150423

      Delete
    2. Yes - existing shareholders would receive shares in Openreach.

      What would happen to those shares from there is entirely down to the free market I guess.

      Delete
    3. Regarding Mr Felten I would strongly recommend some caution. His costs estimate is outdated, it's based on costs of equipment before it's anywhere near mass production hence is extremely expensive. The media converters B4RN pick up for the price of a meal out with wine and the SFPs that go into the switches were hundreds of pounds each once, too.

      The actual install costs of G.fast are around half those of FTTP even if deploying fibre to DPs as part of G.fast.

      The range of the technology is a dynamic thing improving as the equipment and standard matures. The bit loading is likely to increase from 11 to 14 bits per symbol and Tx power from 4dBm to 8.

      Lastly I'd point to the 'What we do' page of his company's website - he has vested interests and is unlikely to hold impartial views.

      http://www.diffractionanalysis.com/services/what-we-do

      Delete
    4. It's ironic that Carl picks up "funny-money" pricing, with respect to BT.

      Especially for plant that BT can bill to the taxpayer.

      There was another sickening story yesterday about a rural community forced to privately fund-raise for their own "fibre" rollout; after BT told them to get stuffed, when they asked if they could be included in its commercial rollout.

      The tiny community of a few dozen homes coughed up an eye-watering £30,000 for a single "fibre" cabinet.

      That silly-money hopefully purchased them a g.vector- and g.inp-compatible Huawei MSAN. Rather than the budget, obsolete trash from dodgy Israeli supplier, ECI, which, for its own dubious reasons, BT has foisted on much else of the country.

      The reality is very ugly. BT was forced to pay back millions to local authorities after overcharging them through its BDUK contracts. Hugely over-inflating the costs of off-the-shelf equipment -- the MSANs or DSLAMs -- in the "fibre" cabinets. Run-of-the-milleEquipment which actually cost much less from reputable far-east suppliers, in comparison to the absurdly inflated charges which BT has gotten away with billing the taxpayer.

      The MSAN in that "£30,000" cabinet, fully populated with linecards, costs just a few thousand yuan from a wholesaler in Shengzhen. But kah-ching for BT once again.

      Reminds me of the commercial wing of the BBC -- BBC Worldwide -- which sells licence-payer funded programming around the world. With all manner of corrupt arrangements with overseas broadcasters; building-in kickbacks to its contracts, and so on.

      Delete
  9. That is just a PR exercise Peter, just read all the comments on it and I think you may only find one out of a couple of hundred that agrees with Gavin.

    I would trust Benoit long before Gavin, we all know costs change in between presentations, and in the same way the gfarce kit will have come down in price so will the fibre kits, so gfarce remains a very expensive botch up compared with doing the job properly Carl.

    ReplyDelete
    Replies
    1. The fibre 'kits' aren't the expense, even ONTs as used by most telcos aren't especially expensive, the digging is.

      I'd recommend a look at http://uppersideconferences.net/g-fast-summit2014/pres-gfast2014/day_1/day_1_6_rob_brink.pdf to put that into clearer focus.

      Incidentally I don't expect either of them to be impartial. Neither do I expect to read that much of value from the comments on a Telegraph article on the subject. Hardly any of the comments deal with the content at hand, preferring to complain about BT Retail's customer service, which is nothing to do with the article.

      If G.fast were as expensive to install as FTTP neither BT or any other telco would be considering using it.

      Even fibre heavy telcos like Swisscom are planning G.fast having already deployed FTTS/DP. Why do the FTTS at all if it's as expensive as FTTP?

      http://uppersideconferences.net/g-fast-summit2014/pres-gfast2014/day_1/day_1_4_oliver_Lamparter.pdf

      Swisscom aren't shy of spending. Where they are 'the competition', IE outside of Switzerland, they are deploying FTTP to millions of premises, and they are doing so in major cities per the presentation.

      With that in mind Benoit's claim G.fast costs about the same as FTTP doesn't add up.

      If BT or any other telco could rip the copper out and replace with FTTP for the same price as 'enhanced copper' they would, no question.

      Delete
    2. What do the CLA think about this:

      http://www.cla.org.uk/node/7120

      Delete
  10. Never mind dismantling Grant Shapps' report, the fact remains that the majority of the population believe Fibre Broadband, as delivered by Open Reach and BT, and all the cabinets with stickers on saying 'Fibre Broadband is here', to be the best there is, which is what BT want them to continue to believe, and is what Ed Vaizey is encouraging everyone to believe. Do you believe it?

    ReplyDelete
    Replies
    1. "Never mind"?

      But that's why Carl was invented! As a cut-out for BT Group. Unswervingly on-message. Fortuitously plugged as a "broadband champion" by the BT flunkies embedded in the BBC, ready to launch his one-man campaign for BT to remain as one giant £50bn group.

      But here's the real beauty - Carl has no provable links to the telco itself. That's crucial.

      It means Carl can go above and beyond anything the company itself could ever do or say. Issuing claim after claim which more often just aren't true.

      As well as rubbishing elected members of parliament and their publicly-funded research. While ridiculing genuine critics, and ruining the reputation of BT's competition.

      Distinctly black forms of corporate propaganda; which in each case (follow the money) work greatly in BT's interest.

      ---

      It's noteworthy how there's a homogeneity to these latest reputational attacks on critics of BT.

      Suggesting more coordination - perhaps coming from within BT Towers - than we might naturally expect.

      Several of the "independent" telecoms forums are also ambushing Shapps; with plenty of ad hominem attacks on him, naturally.

      In doing so, those forum owners belying their own closet (arm's length) relationships with the incumbent telecoms operator; and its stakeholder interests; some not always obvious.

      Telecoms is a dirty old business; and BT is one of the dirtiest players in the world.

      Delete
    2. Which claims from Carl are not true?

      Delete
  11. Well its clear everyone is fighting a marketing campaign here, mud slinging going on. BT are playing the fear game which is if you dare split us off, we will make sure it screws up, probably by fighting legal battles to prolong the process and winding down openreach spending whilst the handover is in progress. Talktalk and sky have done their PR which is mud slinging at BT.
    Carl, I remember in the past you criticised openreach's spending and described it as like running on payday loans, do you not have that view anymore?

    ReplyDelete
    Replies
    1. No I do not. I would've preferred alternate routes but we are where we are.

      Delete
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