This got long
And none of it about EE
FTTP should be where its profitable not nationwide, I never said it should be everywhere, I dont think any of sky, Vodafone etc. say so either, its ofcom and BT who are obsessed with giving little villages the same service as cities.
I'm not convinced that FTTP is now profitable in many places whatsoever. The rollout of FTTC to the vast majority has removed almost all of the market for customers, and the mere existence of G.fast has brought about a choice that changes the playing field further.
FTTP requires a mindset of long-term investment, long-term assurance of income, long-term risk management (risks=competition,regulation,technology advances). Somewhere in all of this, it requires spending a lot of money, and therefore requires more money coming in from customers - a simple equation.
I don't see that any of those are improved by making Openreach independent - unless Sky and TalkTalk went some way to convince Openreach that there was a stable utopia on the other side, with the prospect of more income.
Unfortunately, Sky went out of their way to demand an independent Openreach with no reduction in regulation, and demands to make things ever-cheaper. TalkTalk just want things cheaper. Neither talk about more money being available from customers.
I understand Sky's position - it is harder to compete with a BT that, at a strategy level at least, controls Openreach. Meanwhile, we need to accept that Sky are simultaneously trying to keep their dominant position in TV by crushing their rival.
If, as a punter, you want cheaper broadband - then follow their cues. But if you want investment in serious infrastructure for the long-term future, then they're not worth listening to.
Right now, I think the country needs the environment for serious investment, rather than an environment for more cut-throat competition, and we need a stable environment for a couple of decades. For that reason, I don't think it is worth paying too much attention to Sky or TalkTalk. It might be worth listening to Vodafone, though ... and the rumours that they're talking to Liberty Global again are interesting. Ironically, you don't see VM calling for Openreach to be split from BT.
For Sky and TalkTalk, perhaps they could achieve a better position, not by fiddling with the only wholesaler they can buy from, but by adding a choice of wholesaler that they can buy from. Forcing VM to offer wholesale services to match those of Openreach & BT Wholesale. That way Sky and TalkTalk would have a choice of wholesale provider - forcing the two main infrastructure competitors into competition.
That sounds like a far better way to get Openreach to react to the needs of their customer better ... by making them fight for that customer!
Not good for VM though. It probably mucks up the financials behind Project Lightning somewhat.
As for virgin media they dont have a presence all over the country the same AS BT as such they have no monopoly, because where they exist they have competition from another infrastructure.
VM is one thing that makes the idea of "monopoly" strange in modern times.
By definition there is no monopoly where VM deploys: BT have no infrastructure monopoly in 50% of the country, rising to ~65% over the next 4-5 years.
But by definition, this ~65% of the country is where profits are possible. So BT have a monopoly only in areas where it is unprofitable to operate. What a privilege that is for them!
Back in GPO days, the proper meaning of the monopoly had a consequence: you could use the profits from the "cheaper" parts of the country to help fund the "expensive", unprofitable parts.
Nowadays, we have lost sight of that consequence. The fact that BT has to compete on price in the
competitive 65% means there are no longer the excess funds swashing around the industry to fund the "
monopoly" in the remaining 35%.
A lot of people, on many forums, throw around the word "monopoly" for BT. While it is true that BT operate some of their network as a monopoly in the strict sense of the word, they don't operate with any of the financial benefits that normally come with the word. It seems, to me, that the more we add competition into the
profitable portion of the country, the more we make it impossible to invest in the
unprofitable portion of the country.
Perhaps we need to treat Openreach, and any potential split, in two different ways: one where there is infrastructure competition, and one where there isn't.
Perhaps, in some parts of the 35% "monopoly", the things stifling investment isn't quite the profitability, but the fear, the risk, that a profitable FTTP solution would be undone by VM turning up. Or some other competitor. In this case it is the risk that prevents investment, not the price. For premises stuck like this, would they prefer to see the prospect of investment in FTTP by one company? Or would they prefer competition with lesser technology? Would it be beneficial for a district to be able to offer a limited monopoly (say 10 or 20 years) to an FTTP infrastructure company, allowing for the company to factor reduced risk for payback?
Kitz sorry but openreach really are that bad.
4+ weeks for installations.
Threat of fee's for a fault callout.
No same day callout's for consumers.
Unable to coordinate end user equipment to match street equipment.
Engineers failing to turn up.
Voice engineers turning up for broadband faults.
Cancelled appointments.
I'm with you on this - that Openreach have all these problems that could be improved - but I'm with Kitz on the solution. These are issues to be tackled anyway, with a mindset that wants to tackle them. All of them are issues that show a problem - but they're all a problem that can be solved without being an independent company.
For me, I think they are an endemic problem that stems from a mindset of trying to be
cheap, and trying to set up engineers' schedules in a way that is both cheap and EoI-approved, with a limited number of engineers, and a requirement that Openreach not communicate with the end-user.
I think we can see that things haven't worked well on that front, and need to be changed. And they are being changed ... but it takes time for the end result to show through.
But to be world-class in this arena, it takes more engineers, with more time - and that is the biggest cost for Openreach. If we want a better quality service, we need to pay for it. Yet Sky want to keep both the regulation and the cheapness that got us into this mess in the first place. Openreach want to talk to us, but have been vetoed.
In what way would a split solve this differently from just a good kick up the %^&*?
As for the service... How many ISPs tell their punters what SLA they can expect? How many punters know that lines can be taken with different grades of service, at different costs? How many understand the implications of the grade they have chosen? How many, instead, just take the cheapest possible option without a second glance at the consequences?
Perhaps things would improve here is people understood just what grade of service they were signing up to. And saw how much it cost to be offered an improved grade. I still think that Sky's SLA terms (with Openreach) for LLU install/repair are better than the standard WLR terms, but I can't find the document that made me think that, and I can't find details through Sky or Ofcom (where everything is couched in terms of "within SLA").
The dichotomy is that, while an improved access network, and an improved service related to the access network, absolutely requires more money ... Ofcom regulation forces a reduction in this part of "line rental". But punters see their "line rental" increasing, and expect better service for it too.
Sky and talktalk have been trialling FTTP, they have obviously concluded the cost of rolling it out in cities like york is low enough that g.fast is a waste of time in such areas.
Have they "obviously concluded" that for "cities like york"? I haven't seen them choose to expand the trial within York, never mind expand it to a commercial service in any other location.
In fact, I'm not sure I've even seen a retail price offering from Sky yet.
Kitz you got anything to backup FTTP not been viable? because facts from other countries say otherwise.
Which countries? What kind of housing in that country?
The UK's housing consists of the lowest proportion of flats of anywhere in Europe, bar Ireland. Having lots of flats makes for more compact cities, and a greater likelihood of an FTTB solution. Hyperoptic target this market, and it amazes me that BT haven't gone for it more - other than the odd FTTRN trial.
Korea is often pointed out as great for FTTP. They have an awful lot of flats, and the market is split with around 5m FTTH, 7m FTTB and 5m HFC - and substantial infrastructure competition. Yet KT have decided that upgrading the FTTB from (fibre+VDSL) is best done through (fibre+G.now) rather than using FTTH. (G.now looks to give fairly similar results to G.fast).
So, even in Korea, the existence of a G.Fast-like technology is changing the decisions. FTTH is no longer the only game in town.
In the end, the cost for FTTP coverage of the UK has been averaged at somewhere close to £1,000 per home, and that estimate still only allows for 31% takeup. That £1,000 has to come from somewhere...
FTTP is viable providing the shareholders can accept the reduced profits in the short term.
FTTP at £1,000 per home *might* be viable if there is little risk involved in getting the money back (before any profit is involved). But the UK has an environment where that "little risk" does not exist. The competitive market is one thing that increase the risk, especially with VM increasing footprint. Competition from existing technology hurts too: bottom-feeders offering "free broadband" on existing, cheap but passable technology hurts too. Regulation is a risk too - with Ofcom constantly butting in.
But right now, even FTTC makes it less viable. With only 10% of your market likely to demand higher speeds than they can already get, FTTP is only viable if you can deploy it precisely where it is needed, without the cost of covering the other 90%. For this, the right kind of FTTP-on-demand could fit the bill. But G.Fast-on-demand is still likely to be cheaper.
