Monday, 25 January 2016

How to encourage FTTP deployment

Okay it's fair to say I'm not a fan of the #Broadbad campaign and don't agree with its conclusions. So the question is what would I do to encourage FTTP deployment?

There is one obvious step that comes to mind. It would incentivise Openreach for sure. It would, however, be problematic for Sky, TalkTalk, Vodafone and a few others.

It's a simple change - allow Openreach to remove copper completely when they build fibre to premises.

At the moment Openreach cannot remove copper lines from homes that already have them when they build fibre to them. This means customers can purchase the cheap LLU-based deals from Sky, TalkTalk, etc where the ISP has full control of copper back to the exchange but also means that Openreach do not benefit from reduced maintenance costs of all-fibre networks. Verizon cited these savings as a major driver for their build of their FiOS FTTP service. Telefonica in Spain are taking advantage of it, too.

Could even allow Openreach to retire copper from homes not currently taking a fibre service as long as sufficient notice is given to their providers and appropriate transitional arrangements put in place.

All copper LLU services are obsolete. As long as reasonable replacement services are made available such as all-fibre basic voice services it would probably be a worthwhile enterprise.

Sky and TalkTalk have been on a high copper diet for too long. They, for obvious reasons, want to defend their investments in exchange-based equipment and maximise their control over their end users' services. I'm not a fan of BT but there I entirely agree with them. I strongly suspect it still remains the case - Sky and TalkTalk have a vested interest in sweating their own assets and for that they need Openreach copper. That said there's little choice from one of them - TalkTalk don't have the cash to invest in building their own networks to any scale. I should also note that they are very much onboard with Openreach's and FTTPoD 2 projects.

If they want full control over the service end to end there's a really simple solution. Costs £500-£750 per home in urban areas, though, and means taking the risk of the investment on themselves.
If the business case is so obvious and BT have no reason not to deploy beyond protecting their own assets there shouldn't be any real hesitation, should there?

I'd hope Ofcom would consider this the way forward. Their regulation, entirely preoccupied as it was with competition at the retail level, has improved choice at the lower end of the market at the expense of disincentives that deter companies from investing. Ofcom have brought the market down to a 'lowest common denominator' state where dozens of operators resell cheap copper services.

It's time Ofcom began to reverse this trend and pull the market away from pile high, sell cheap, and deliver the revenues providers need in order to make the investments in infrastructure we will all need to see in the future.


  1. I agree to an extent, the problem is LLU is ofcom's baby, it is like trying to saw off someone's leg, to get ofcom to allow adsl LLU removal.

    Keep these posts up :) good to see you more active now.

    Also sky and co can keep using their backhaul investment on FTTx services, I would imagine the adsl hardware isnt that a big deal of a expense. The issue is really that they want to bundle free broadband with tv, and that gets more expensive for them if their only option is to bundle FTTx services.

    Any thoughts on the sky FTTP trial in york? it must mean something.

    1. So far Sky's trials have been FTTPR - Fibre to the Press Release.

      They have the funds but also have a whole bunch of other demands on their funds.

      At least they haven't done a TalkTalk and talked about rollouts to 10 million premises while being unable to afford to pay a dividend without borrowing.

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