BT Set to Avoid Openreach Split as Ofcom Opts for the Middle Ground

Caged · 26 Feb 2016 at 20:12

MissChief said:
It's a very difficult issue to resolve, but IMO having the network operator beholden to and partially funding the most popular ISP is wrong.

It's a big leap to assume splitting it out would improve things, though. Jeremy Darroch has hinted at 'increased investment' in an independent Openreach but nobody has come anywhere near close to committing to numbers.

Having BT Wholesale / BT Retail as a guaranteed customer probably goes a long way to helping Openreach justify certain developments - look at the way FTTP has been ignored by BTs major competitors, despite them banging the drum about needing FTTP to stay competitive. This disconnect between words and actions lends them no credibility.

The end result of any fiddling with consumer broadband options needs to be an improvement in connectivity. Burying Openreach under regulation isn't going to solve this, it's just going to slow progress down. An improved PIA offering could be a step forward if it is implemented correctly and the questions over who foots the bill for new new duct work and chambers etc. is answered (if I were a CP I wouldn't want to pay the full costs of digging in a new duct, get in a couple of fibres and then have another CP fill it up for whatever the cost of just dropping fibre in was). But as it still involves physically building a network I highly suspect we will end up back where we started - TalkTalk can't afford to build a network, Sky have already claimed it doesn't present a good enough return on investment.

Caged · 23 Apr 2016 at 15:35

Just to bump this after a recent Times article (http://www.thetimes.co.uk/tto/busin...e?shareToken=f978a4f4086e57df7089c232f3700153)

Jeremy Darroch, chief executive, ruled out plans to build its own national fibre network in Britain despite Ofcom’s attempts to tempt other broadband companies to invest in infrastructure to compete with BT’s Openreach unit. Sky told Ofcom, the telecoms regulator, as part of a submission this year that it had been “exploring in detail the possibility of investing in last mile fibre networks” to compete with Openreach but Mr Darroch said that the company was more comfortable as a wholesaler of Openreach’s fibre.

Looks like that Sky/TalkTalk independent network idea is dead.

Orcvader · 23 Apr 2016 at 17:01

So... basically... nothing is happening, even though Sky was one of the main voices that wanted Openreach to be split from BT so they can have more control over fibre deployment.

MissChief · 23 Apr 2016 at 17:13

If you create your own national network then OFCOM will declare it a monopoly if you don't give everyone else access. Why should any company spend billions to do so then have to share and what will likely be mandated wholesale costs. Openreach's network is different because it was mostly created when BT was a nationalised company.

Caged · 23 Apr 2016 at 17:42

How would it be possible to build a network to compete with Openreach and have it declared a monopoly?

Sky would have a long way to go to match Virgin Media's footprint, and that network is in no danger of having mandated wholesale access. Maybe they ran the numbers and concluded what everybody else has - infrastructure is expensive.

MissChief · 24 Apr 2016 at 02:19

Hence the word national. Virgin media is far from a national network.

Caged · 24 Apr 2016 at 10:10

So Sky won't build their own network because they have ambitions on covering the whole country - even remote locations where they will never see a profit - and don't want to be forced to have to provide wholesale access (a thing that wouldn't happen if they funded it privately), and that's the reason they are content to use someone else's network. They forgot that there was a middle ground of "build in cities".

That's a stretch isn't it. Sky have never publicly made that claim, all the moaning has been about the service they receive from Openreach and calling for full FTTP while also not taking the GEA-FTTP service that is available.

I'll take their own conclusion that it makes better business sense to not own and have to maintain access networks over this idea that they really want to be charitable but regulation got in the way.