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

[philip2009]

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

The UK telecoms regulatory will publish the outcome of their ‘Strategic Review of Digital Communications‘ on Thursday and unsurprisingly there have been some leaks, which appear to confirm our expectation that Ofcom will NOT move to split BT from control of its national phone and broadband network (Openreach).

Instead Ofcom is expected to impose greater separation of Openreach from BT, which could involve giving rival ISPs more access to Openreach’s national network of cables and telephone exchanges (a highly likely outcome). Potentially Ofcom may also require BT’s network access division to have its own separate board, which the operator won’t be very happy about.

However it’s understood that the regulator will opt to keep the option of full separation on the table, which could be used as a bargaining chip should BT move to aggressively oppose their new measures. A BT source told The Telegraph that this may yet result in separation: “It could get to the point of separation by the back door” (i.e. if the price of Ofcom’s new regulation feels too high to stomach).

Naturally all of this is to be accompanied by a variety of other changes to market regulation, which will go well beyond the question of Openreach’s separation. We’ll find out more on Thursday.

http://www.ispreview.co.uk/index.ph...plit-as-ofcom-opts-for-the-middle-ground.html

I'll wait for experts to unpick the details of the review once it's published before forming an opinion.

 

[Caged]

As they said in the comments, worst of both worlds. Ofcom are the problem, we shouldn't look to them for the solution.

 

[Amraam]

As they said in the comments, worst of both worlds. Ofcom are the problem, we shouldn't look to them for the solution.

That Reg Morris needs to stop typing as it comes into his head. His solid walls of text are seriously impossible to understand.

 

[Cosimo]

BT must open up network but.... only to open up cable network

BBC:

Ofcom says BT must open up its network to competition - but it has stopped short of demanding a full spin off of the Openreach broadband business.
The regulator said in a statement: "Openreach needs to change, taking its own decisions on budget, investment and strategy, in consultation with the wider industry

http://www.bbc.co.uk/news/live/business-35611728

OFCOM:

BT must open up network, so competitors can connect fibre to homes and offices

•Reform of Openreach to better serve UK consumers and businesses

•Better quality of service for all customers, including automatic compensation

Ofcom has today set out how it plans to improve telecoms quality and coverage, so that UK consumers and businesses receive the best possible phone and broadband services.

These are the initial conclusions from Ofcom’s Strategic Review of Digital Communications, announced last year, which is designed to make the UK a world-leading digital economy over the next decade and beyond.

Many of these measures affect all major phone and broadband providers. Others relate specifically to Openreach, the division of BT that maintains the UK’s largest phone and broadband network on behalf of competing providers.

Ofcom’s decisions are designed to achieve:

•A choice of networks for consumers and businesses. Openreach must open up its network of telegraph poles and underground tunnels to allow rivals to build their own, advanced fibre networks, connected directly to homes and offices.

•Reform of Openreach. Openreach needs to change, taking its own decisions on budget, investment and strategy, in consultation with the wider industry.

•Better quality of service across the telecoms industry. Ofcom intends to introduce tougher rules on faults, repairs and installations; transparent information on service quality; and automatic compensation for consumers when things go wrong.

•Better broadband and mobile coverage. Ofcom will work with the Government to deliver a new universal right to fast, affordable broadband for every household and business in the UK. We also intend to place new obligations in future spectrum licences to improve rural mobile coverage.

Supporting investment to provide a choice of networks

Ofcom is today announcing a new strategy to promote large-scale roll-out of new ultrafast broadband networks, based on cable and fibre lines, as an alternative to the partly copper-based technologies currently being planned by BT.

Supporting investment by rival providers will reduce the country’s reliance on Openreach, and increase competitive pressure on its network.

To help bring this about, Openreach will be required to open up its telegraph poles and ‘ducts’ - the small, underground tunnels that carry telecoms lines. Using these, rival providers will be able to build their own fibre networks, connected directly to homes and offices.

Openreach must make it much easier for competitors to access this network, and provide comprehensive data on the nature and location of its ducts and poles. This new ‘digital map’ of the UK will allow competing operators to invest, plan and lay advanced networks, giving people more choice over how they receive their phone and broadband services.

The rest from OFCOM:

http://media.ofcom.org.uk/news/2016/digital-comms-review-feb16/

 

[Shelster]

Optimist in me thinks this may be a better deal than we have now...a bit similar to when the LLU came in.

Realist thinks this will change nothing for the foreseable future other than giving someone a better job and silly pay rise with massive bonus on the new board they want...

Would be good if people would come round and now run fibre from FTTC cabs to peoples front doors, but how silly pricey would that be????

 

[DragonQ]

Would be good if people would come round and now run fibre from FTTC cabs to peoples front doors, but how silly pricey would that be????

That was available for a short time. Line rental was something like £99/mo and the initial cost was between £500 and a few grand depending on distance from the cabinet.

 

[SirJinks]

Openreach must open up its network of telegraph poles and underground tunnels to allow rivals to build their own, advanced fibre networks, connected directly to homes and offices.

This has already been available for a number of years I believe, I'm not certain what Ofcom are meaning here.

 

[MissChief]

Providers had to individually negotiate with Openreach previously. I'd imagine this means Openreach having to set a fixed cost and process.

 

[Cosimo]

This has already been available for a number of years I believe, I'm not certain what Ofcom are meaning here.

My understanding is that access to tunnels/cable piping/poles has not been to available to anyone but BT. Other service providers can install equipment in exchanges but not use any other part of BT's network for their own.

Virgin had to lay their own cable network. Ofcom will now let other providers use this new access to build their own networks instead of having to start from scratch.

 

[Orcvader]

So... for example, Sky can install their own fibre using BT's existing trenches, poles, etc without needing to wait for Openreach to roll it out? Will it be connected to BT's network, or entirely seperate? Meaning you could get Sky fibre but not BT Infinity..

 

[Cosimo]

So... for example, Sky can install their own fibre using BT's existing trenches, poles, etc without needing to wait for Openreach to roll it out? Will it be connected to BT's network, or entirely seperate? Meaning you could get Sky fibre but not BT Infinity..

I believe that it will be 'something' like that. What the Openreach role will be in this will be interesting as they hold all the technical detail for the infrastructure. How it will be connected is anyone's guess at present but I would expect there to be another's fibre product on offer where BT has none.

Going to be interesting times ahead.

 

[MissChief]

Could this potentially mean that other providers like Sky or TT could collaborate with new build areas and developers to install services and have a potentially captive market in small areas?

Openreach have historically been VERY unwilling to allow other companies to work on their network so I can't help but think they'll be actively resisting any efforts to allow it. This also means that Openreach's continual underfunding of engineers and thousands of missed appointments across the UK won't get any better.

 

[KIA]

My understanding is that access to tunnels/cable piping/poles has not been to available to anyone but BT. Other service providers can install equipment in exchanges but not use any other part of BT's network for their own.

Virgin had to lay their own cable network. Ofcom will now let other providers use this new access to build their own networks instead of having to start from scratch.

Already available. It's called PIA.

https://www.openreach.co.uk/orpg/home/products/ductandpolesharing/ductandpolesharing.do

 

[ljt]

Already available. It's called PIA.

https://www.openreach.co.uk/orpg/home/products/ductandpolesharing/ductandpolesharing.do

Indeed, they've opened up their ducts/poles etc since 2009, but there has been very little interest. Why this has been made into such a big deal in the latest Ofcom ruling is confusing, as it's nothing new.

 

[Caged]

Ofcom need to be careful that they don't try and enforce a situation that puts Openreach in the position of having to foot the bill for building and maintaining infrastructure whilst regulating prices to such an extent that Sky can come along and use it all for pence, as they just won't bother building. What happens when a duct gets filled - do Openreach need to lay a new one and charge regulated per-metre prices for access? Good luck trying to force a private company to do that.

It's absolutely right that Openreach only let their own staff work on their network - anything else would be impossible to keep control of.

Despite what Sky, Vodafone, TalkTalk etc. harp on about, there is nothing preventing them from building their own networks. That they would rather engage in a PR offensive in an attempt to get someone else to do all the difficult stuff for them should say a lot about their supposed commitment to investment in their ideal of a spun-out Openreach. That the majority of consumers aren't really willing to see internet access as anything other than a freebie bundled with their TV subscription (hence limiting the amount of return that could be expected from deploying of new networks) is a product entirely of their own making.

Ofcom unfortunately are only interested in "competition" which to them means lots of choice of providers - totally ignoring the fact that this mostly means lots of different ways of buying the same physical product. This of course leaves the only real differentiator between services that most people care about as the price, which has pushed broadband connectivity to prices where it just isn't possible to make any money if supplying the product actually involves any more work than posting out a free router and processing the payments. Ideas like automatic compensation for outages on a £5 a month consumer product are a symptom of this ridiculous way of thinking. This whole process has been Sharon White justifying the existence of Ofcom, and the results of this review haven't changed my mind at all.

 

[MissChief]

So do you think it's right that the biggest CP (sorry, industry speak, Communications Provider) has ownership of the network all the other CP's use to provide services?

BT are the only CP that haven't made a huge number of complaints to OFCOM about Openreach and the delay in activating services, delays and timescales to fix faults, the hundreds of missed appointments on a daily basis, all the while hiding behind all the CP's who cop the flak from all the unhappy customers. Openreach's level service is AWFUL. As said, EVERY Cp has made complaints to OFCOM, EXCEPT BT themselves.

Openreach are responsible for around 1/3 of BT's annual profits. This money gets passed back to the parent company for use in buying up Sports (making it more expensive to watch all the available football for example) and the takeover of EE.

Yes it's true that any provider is free to set up any network of their own and indeed many are indeed trialling this. Talk Talk and Sky are running an Ultra Fibre Optic FTTH trial in and around York that has nothing whatsoever to do with Openreach And it's proving very popular. 1GB up AND down is £30 a month. Compare that to Openreach's 'top' widely available domestic product of 80 Meg (if you can get it) down and 20 up, if your ISP decides to take it.

Personally the Network that your parents and grandparents paid for years ago when BT were publically owned should NEVER have been placed in Private hands when BT were privatised. They were forced to sell Cellnet and IMO they should have been forced to sell Openreach too.

Out of interest Caged, what would you do?

 

[bremen1874]

Comparing that limited York based FTTH trial to Openreach's standard FTTC offering is rather disingenuous!

Make that comparison when they’re rolling it out in the smaller towns and villages (I’m not holding my breath).

 

[Caged]

So do you think it's right that the biggest CP (sorry, industry speak, Communications Provider) has ownership of the network all the other CP's use to provide services?

Those CPs don't have to use Openreach. If it's that awful then they would have created an alternative a long time ago, but they didn't because they are businesses and are only interested in providing an acceptable service for minimal cost. This is what using Openreach products allows them to do.

Yes it's true that any provider is free to set up any network of their own and indeed many are indeed trialling this. Talk Talk and Sky are running an Ultra Fibre Optic FTTH trial in and around York that has nothing whatsoever to do with Openreach And it's proving very popular. 1GB up AND down is £30 a month. Compare that to Openreach's 'top' widely available domestic product of 80 Meg (if you can get it) down and 20 up, if your ISP decides to take it.

The FTTP deployment is PR fluff. Sky's response to the Ofcom report was to complain that there's no real return on investment in building networks, so presumably the numbers don't really add up on the York deployment. If they do then they can surely roll this out across the country with minimal delay.

If other ISPs were interested in providing quality connections then the top-tier FTTC product would be available from Sky's website, they would be able to serve homes where there's only an FTTP connection, they would provide voice over fibre where there's no copper available. They aren't interested in some nice sounding goal of having a well connected country, they want to be able to make money with little in the way of capital investment. This is fine, they are a business.

Personally the Network that your parents and grandparents paid for years ago when BT were publically owned should NEVER have been placed in Private hands when BT were privatised. They were forced to sell Cellnet and IMO they should have been forced to sell Openreach too.

Out of interest Caged, what would you do?

It's disingenuous to claim it's the same network that was paid for years ago with taxes, that simply isn't true.

What I would do would be to encourage alternative networks to be built - this would involve removing regulation so the threat of having to provide wholesale access for a pittance goes away, stop prices being held high on purpose in areas where there is competition, and petition the VOA to stop charging insane rates on fibre infrastructure.

Edit: What's interesting is that the only two providers building networks commercially in areas of competition (VM and Hyperoptic) agree with this if you read the endless statements released yesterday. They want a climate where it's possible to build and return a profit, and years of commercial ISPs giving internet access away has damaged this. The Ofcom proposals will also do nothing for rural areas which won't suddenly become commercially viable, or any premises without easily accessible ducts. Sky / TalkTalk / Vodafone want Openreach to build an FTTP network to ever premise and then to rent access to it for a knock-down price - this makes business sense for them but it will also never happen.

 

[APM]

Compensation for outages is the first thing I saw in there.

VM has been very unreliable for me for about a month now,plus it looks like they're going to clean up the advertising side of things a bit so that is welcome.

Time will tell if anything serious happens to allow more organic,less monopolised, growth for the wider national network though.

 

[MissChief]

Those CPs don't have to use Openreach. If it's that awful then they would have created an alternative a long time ago, but they didn't because they are businesses and are only interested in providing an acceptable service for minimal cost. This is what using Openreach products allows them to do.



The FTTP deployment is PR fluff. Sky's response to the Ofcom report was to complain that there's no real return on investment in building networks, so presumably the numbers don't really add up on the York deployment. If they do then they can surely roll this out across the country with minimal delay.

If other ISPs were interested in providing quality connections then the top-tier FTTC product would be available from Sky's website, they would be able to serve homes where there's only an FTTP connection, they would provide voice over fibre where there's no copper available. They aren't interested in some nice sounding goal of having a well connected country, they want to be able to make money with little in the way of capital investment. This is fine, they are a business.



It's disingenuous to claim it's the same network that was paid for years ago with taxes, that simply isn't true.

What I would do would be to encourage alternative networks to be built - this would involve removing regulation so the threat of having to provide wholesale access for a pittance goes away, stop prices being held high on purpose in areas where there is competition, and petition the VOA to stop charging insane rates on fibre infrastructure.

Edit: What's interesting is that the only two providers building networks commercially in areas of competition (VM and Hyperoptic) agree with this if you read the endless statements released yesterday. They want a climate where it's possible to build and return a profit, and years of commercial ISPs giving internet access away has damaged this. The Ofcom proposals will also do nothing for rural areas which won't suddenly become commercially viable, or any premises without easily accessible ducts. Sky / TalkTalk / Vodafone want Openreach to build an FTTP network to ever premise and then to rent access to it for a knock-down price - this makes business sense for them but it will also never happen.

There's nothing to stop all the haulage companies who complain about traffic and the state of the roads from building their own roads to higher standards is there? But they won't of course. Similar to the ISP's who use Openreach's Network.

I agree that cut price services make investing in networks next to impossible because there will be no benefit at the end of it. It's telling that Virgin have to constantly improve speeds to stop people leaving and every cable company that ended up in Virgin Media basically ran at a loss for years while building their network. It's only relatively recently that VM started becoming profitable.

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.