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[Chrysalis]

Yeah basically UBC was cheap backhauls but expensive ports, CBC was cheap ports (2mbit same price as 512kbit) but expensive backhaul.

[pedro492]

Of course BT are the major player, because not too long ago they owned practically ALL of the UK lines. When it comes to broadband Sky and TT arent really too far behind.

Not too far behind?!  There is no effective competition any more in fixed-wire internet.  Since the advent of FTTC, BT is once again a shameless monopoly.  Every bit as over-powering as it was in the days of the state-run GPO.

Then came Local Loop Unbundling (LLU), a breath of fresh air.  Introducing that much-needed competition in broadband delivery, LLU spurred investment from new players like Sky and TalkTalk.   But any benefits we did gain from LLU are, today, all but lost.

Since BT's rollout of FTTC/VDSL2, Sky and TalkTalk are reduced once again to the ignominious ranks of humble BT Resellers.

Through its Openreach division, BT has regained near total control of that all-critical "golden mile" from (and including) the DSLAM to the Consumer Premises.

Once again, BT has secured a vice-like grip over internet delivery in the UK, just as it had in the 1990s. Today it's creaming off enormous profits from those resellers (60% of BT Group profits come via Openreach).   That's maybe why we're hearing murmurs in the press calling for Openreach to be spun-off from the rest of the BT Group. That perhaps being an unspoken condition of BT winning regulatory approval for its merger with EE??

Sadly, it's the consumer who will feel the pain here.  Through that lack of competition, high costs, poor product choice, low availability, long installation lead-times, lack of future investment and failing infrastructure, slow fault repairs, heavily skewed service contracts, and so on.

We can recognise now that BT intends to dominate the entertainment element of so-called "Quad Play".   Abandoning its agreements with Arquiva which had been delivering BT's premium TV channels over the terrestrial digital video broadcasting (DVB-T) platform.   BT now intends to use its monopoly control of the local loop to deliver its premium entertainment content wholly over its own IP-based platform. It has already gained exclusive broadcasting rights for major sporting events; its intention now is to further freeze out competition in that sector from the likes of Virgin, TalkTalk and Sky; the latter is reportedly pulling the plug altogether on its syndicated NowTV streaming platform of premium TV content.

Through ineffective almost non-existent market regulation, broadband competition in the UK is all but doomed.   BT has secured Full Spectrum Dominance of the battlefield, as the military would say.   That it now intends to dominate the UK's cellular market as well, through a merger with EE, the largest operator, is yet another nail in the coffin for competition in Britain's telecoms industry.   This is very bad news, and should be resisted by all conscientious consumers! 

[c6em]

If BTOR is spun off as a pure infrastructure company then I would expect it from then on to require lines to make a profit for them on an individual basis.
So rural lines which cost more to maintain should be paying a lot more for receiving a service than urban lines.

This would follow on from what happened when B.Gas was split up.
Previously when it was all owned as one B.Gas would put a pipe into you at a nominal cost or even free in the full knowledge that it would receive ad infinitum the revenues from your house's use of the gas.
Now the pipelines have been split off into being managed by Transco as a totally separate company while one of the energy companies gets the money from your use of the gas.
So not surprisingly now if you want a gas line put in you pay the full cost of doing so to Transco.

On your other point I fundamentally disagree with your thoughts on competition.
Excess competition in the UK broadband market has reduced prices to a level where the service is getting worse.
Broadband is now sold in the UK on a least price basis at all cost and a £1 per month rise in broadband prices is good for 25 pages of outrage on ISP's forums while the adjacent threads still merrily complain about lack of investment, things not being improved, lack of staff, long lead times and the rest.
How on earth people expect investment when they are just forever chasing £2.5/month Broadband price deals escapes me.
Perhaps we should be like Jersey telecom who are installing full FTTP for all.  Those on ADSL are being told the service will close, here are the new (high) prices for FTTP - and you have two options: pay up or be switched off.

[pedro492]

Useful article here about BT and its EE takeover plans, its "Vulcan death grip" on the local loop and the FTTC market, the toothless regulator, and so on. 

It's a refreshing counter-balance to the whooping from the Corporate Media and the City of London we hear every time a merger or acquisition is announced.  So often the media blithely regurgitates those corporate press announcements without so much as a question.   The media conveniently forgetting that the general public, its target readership, almost never gains from any tie-up.  Mergers invariably mean less competition, price hikes, cost-cutting, poorer service and redundancies.

Writing for telecomtv.com, veteran telecoms commentator, Martyn Warwick describes BT's "unassailable dominance" over the local loop and the FTTC market.  Indeedy.

And it seems that The Beast has already got Sharon White, incoming Ofcom chief, in its crosshairs; just two days into her appointment and BT is threatening court action!

The spat has come about because Ofcom, early in 2015, will announce the imposition of a "margin squeeze" test to ascertain whether BT's rivals (including Sky, TalkTalk and, in due course, Vodafone) who, perforce, must rely on access to BT infrastructure to provide 'superfast' broadband themselves, are able to make a 'reasonable return ' on the sale of those products and services.

That lèse-majesté has angered BT's top management and board of directors but what has really made them hopping mad is Ofcom's further proposal to examine whether or not the wholesale prices BT charges its competitors for super fast broadband are, coincidentally or not, remarkably similar to the retail prices BT charges subscribers for retail superfast broadband services.

Word has it that BT has already threatened to go to the British High Court if the 'margin test' does go ahead. The operator's case is that such a 'test' would be illegal because it would cause irreparable harm to its business. Thus it would apply for a ruling negating Ofcom's intent,  rendering the regulator toothless and impotent in this matter.

TelecomTV also reports funny-goings-on with BT's consumer pricing.   Pre-empting that Ofcom investigation into its "margin squeeze" - when the regulator will measure the true differential between BT's wholesale and retail pricing -  BT has just nudged up its broadband retail prices. (nudge nudge wink wink!)...

"BT will thus be able to claim, and adduce evidence to support the contention, that it is not applying a 'margin squeeze' on competitors".

Dirty old business.

And there are heightened demands for the de-merger of BT's Openreach division, in the hope that it might level the heavily skewed playing field that is Britain's fixed-wire telecoms sector:

BT's rivals are most worried that the operator will become even more powerful and dominant in some areas than it is now. They think that their best chance to curb some of the incumbent's commercial aggression will be to demand that the regulator takes a much tougher line with BT Openreach, the division that supplies competitors with wholesale broadband. Demands are rising that Openreach be formally and structurally separated from BT. But that would take time, and BT would fight any such proposal every step of the way

More refreshing comment..

To this day BT maintains its Vulcan death grip on broadband everywhere in the UK that isn't cabled. - and a lot of it isn't. What's more, despite efforts to open-up the local loop and permit rivals to co-locate their equipment in BT exchanges, the incumbent still has more or less absolute control over something that was built over decades with taxpayers' money and then quite literally gifted by the then government to BT at the time it was privatised.

This is BT's strong suit and despite howls of protest from its competitors and increasingly frequent and strident calls for the telco to be forcibly divested of its local loop assets to ensure some real and meaningful last-mile competition there is no indication that anything will happen on that front until the next blue moon.

The whole thing is a can of worms. In essence, Ofcom wants BT to make greater returns from superfast broadband services to show Ofcom that it is not exercising undue dominance over the market by not charging enough for superfast broadband. It's crackers. The net result of all this may well be that the regulator will get bogged-down in a legal quagmire that will make the case of Jarndyce v Jarndyce in the Charles Dickens novel 'Bleak House' look like instant justice. BT will sit back and watch as the months and years roll by and the cash rolls in.

One thing you can be sure of, is that the prices subscribers pay for broadband will continue to rise and rise, regardless. Ah, competition. It's a wonderful concept. Pity about the practice.

Good article; well worth a read; thanks for penning it telecomtv.com!

http://www.telecomtv.com/articles/policy-and-regulation/new-ofcom-head-faces-a-baptism-of-bt-fire-and-litigation-12044/

[Black Sheep]

To take this all back to reality, is it not just how big business is carried out ?? I think it was c6em (?) who commented how relatively cheap BB services really are ........... especially when you look at other large companies who provide essentials like Gas and Electricity, who you would probably say have a similar kind of stranglehold (Vulcan death grip), over the public ?

In any business arena there is always going to be a top-dog. If BT wasn't it, someone else would be. You seem to have a massive agenda against anything BT, did an old GPO engineer stand on one of your toys back in the day ??

[pedro492]

  Pleasantries aside, and returning to our matter du jour..


Sharon White: incoming Ofcom chief

The toadying mouthpiece of the City of London, the Financial Times, runs a biography of sorts for Sharon White, incoming Ofcom chief. From the obsequious tone to the FT's copy, White clearly passes muster among the City's slickers. But maybe for all the wrong reasons.

The FT reports on White's previous posts at the World Bank and at the Treasury where she was "one of the favourite mandarins" of Bilderberg grandee and former Tory chancellor, Kenneth Clarke.  With notches like that on her career bedpost, she's certainly done her stint of pandering to the wants and whims of High Finance.    Expect no rocking, then, of the corporate apple-cart, once she's installed in her new pad at the Ivory Towers of Ofcom.   BT and its shareholders, both here and abroad, are doubtlessly reassured by a CV like that 

White is one of the very few female heads at this level of government, and she's black too.  Even if she does grow some regulatory balls, she'll face an uphill struggle trying to regulate an industry dominated by misogynistic willy-waving white men.

However, the FT stays loyally by her side here. Pitching White as the Mother Teresa of the telco sector; and blessed too with the diplomatic magnanimity of Mahatma Gandhi.... 

[Her] diplomatic skills..will come in handy when mediating the regular battles between telecoms and media companies. One former official described her style as “like a nurse” who came to tell the patient how best to take the medicine, but brooking no dissent.

Friends say it is important not to underestimate the distance she has had to travel, from a black working-class background, to breach bastions long dominated by middle-class white men.

After graduating from Cambridge, and before entering the civil service fast stream as an economist at the department for education and science, Ms White briefly worked for a church in a deprived part of Birmingham. Both this experience, and her family background, have left their mark.

One senior civil servant, who has seen her meeting members of the public beyond the confines of Whitehall, noted her ability to forge easy connections with people on the receiving end of public services, whom many of her rank would pass their entire lives without encountering.
...
One broadcasting executive said Ms White’s economics background would fit Ofcom’s evidence-led approach. “Although she’s highbrow, she’s also incredibly engaged with popular culture,” the person added. “She’s not one of these people who only goes to the opera.”

And to boot, White is also "incredibly engaged with popular culture".  Oh dear. An aficionado of Trash TV, do they mean? With a remit of regulating our broadcasting industry and its ever-plunging standards?  Perfick for the job, eh?!

In the third of the four FT articles linked below, we find, more seriously, renewed calls for liberating Openreach from the grasping clutches of the pantomime villain, the BT Group...

The regulator will also face a difficult job deciding to what extent the deal [to buy EE] will make BT too dominant in the telecoms market. The group will have no greater market share in a single sector but the regulator may want to consider the broader context if BT can cross-subsidise various services to the detriment of competitors.

Rivals such as Vodafone and TalkTalk will push heavily for price reductions for access to the group’s fixed line broadband network — and potentially could argue the case for a split of BT’s Openreach infrastructure arm entirely.
..
However, there were concerns about the reaction of Ofcom, the industry regulator, which may view the combination of BT and EE as creating a dominant company across telecoms markets.

Stephane Beyazian at Raymond James expects the transaction will be cleared by antitrust authorities, but there will be more regulatory scrutiny of BT if it does buy EE.

TalkTalk, the group’s fixed-line rival, has argued that Ofcom needs to more strictly regulate and potentially explore the separation of BT’s Openreach arm, which provides wholesale access to the group’s fibre networks.

Rick Mattila, telecoms analyst at MUFG, pointed to the unknown impact of regulatory reaction “and in particular any weakening of the earnings of BT’s Openreach unit”.

Lots of off-the-record comment here, from BT's rivals and their City sock-puppets. Here's one comment echoing what was said earlier in this thread. It's about BT abusing its dominance of the local loop and our state-funded fibre network; and using it to build a low-cost mobile backhaul, to cross-subsidise its new cellular network.

Vodafone, along with TalkTalk and Three, is also expected to raise concerns that BT could benefit disproportionately from the provision of so-called “mobile backhaul” — the underground cables that carry calls between mobile masts — with its wholly owned mobile business. The carriers are expected to say that they might be at a disadvantage because BT could use its national network to benefit its consumer business.

This takeover-cum-merger could take years to thrash out; certainly with all the regulatory brouhaha, it's going to rumble on for a while yet.   And even if BT does seal the deal, the FT warns that it could find itself struggling to recoup its £12.5bn purchase cost for EE.   Something for BT pension-holders to mull over.

[Our] parting shot is to point out the communications industry has a history of spending zillions on the fashion of the time from cable to 3G. In years to come shareholders will forget the exact number on EE’s price tag. But they may remember what the acquisition did to their returns.

[1] http://www.ft.com/cms/s/0/4edb04be-850c-11e4-ab4e-00144feabdc0.html
[2] http://www.ft.com/cms/s/0/0c57e1c2-7cae-11e4-9a86-00144feabdc0.html
[3] http://www.ft.com/cms/s/0/220991a6-847d-11e4-bae9-00144feabdc0.html
[4] http://www.ft.com/cms/s/0/18859c8c-8465-11e4-8cc5-00144feabdc0.html

[Black Sheep]

That's all very good, and you've spent a considerable amount of time compiling these posts, but what is your point ?? It just seems like you're posting up one-sided opinions ...... and that's all it is, opinions. You've condemned Sharon White before she's made her seat warm .... with nothing other than opinion to justify it.
The rest is pure rhetoric as well. Doom and gloom masters.

If I had the time, and more importantly the wherewithal (which I haven't), I could spend all day looking for quotes and character references to parry your theories. If your stories all come true, I will be the very first to say, 'I was wrong you were right ..... where do I send the bottle of wine to ?'. Until all this actually happens though, I for one can't see the point is constant speculation.

[pluto]

But one thing is plain for all to see – acquisition of EE will put BT in a position of market dominance that cannot be good for anybody other than BT shareholders. For a company to have such market power without legally binding responsibility to its customers (in the sense that the NHS has certain legal and ethical responsibilities) is a hugely unhealthy position; ‘customers’ being not only those of BT Retail but also Openreach.

The answer is to separate Openreach lock, stock & barrel from the rest of the industry and, particularly, to sever all corporate ties between Openreach and the remainder of BT (with the possible exception of the pension scheme).

Furthermore, I cannot believe that the upper echelons of BT towers are not prepared for this. Just how much nous does it take to realise that BT's monopoly of the infrastructure (Openreach), when combined with its current pre-eminent retail market position plus an entire newly-acquired mobile network, is simply too dominant a position?

[Black Sheep]

I readily accept all you've said, pluto. What I don't subscribe to are posts alluding that BT are the spawn of the Devil, are akin to the Soviet Russia of old, advocate beating up old ladies in the street, etc etc ....... it's just conspiracy theory/propaganda speak until it does or doesn't happen.

I work for them (Can you tell  ), and yes, they do have issues facing them that any large company would. However this takeover bid pans out, and don't forget it was BT that was approached not the other way round, then it is what it is. I keep reiterating .... it's big business being carried out in a big business arena. Sh1t like this happens from time to time. 
It's really not worth people getting all in a tizzy about ....... surely ??

[broadstairs]

I completely agree with Black Sheep, this is business and much of what is being espoused here is not realistic.

I have seen this kind of thing many years ago working for a large multi-national company which was hit hard by US anti-trust legislation.

While it is perfectly reasonable to comment about what the takeover may or may not mean to both BT, its shareholders and customers of EE, and how the regulator may or may not view it, much of what is being said does seem to me to be unreasonable and I think those making some of these comments should carefully consider what they are saying.

BT is NOT the devil incarnate it is a large corporation doing what large corporations do. It is to be hoped that the regulator takes a considered view on what this means for the market place and takes appropriate action if it believes it needs to.

I happen to believe that something does need to be done to protect consumers. However it is not for me to judge.... that is for the regulator.

Stuart

[kitz]

OK..  I think we all get the point now that you think BT are the evil empire, but Im not sure if you really have thought things through about what the alternatives could be.

For one, there will always be one dominant company.  It follows that it will be BT purely because until about 10yrs ago they were practically the only company that you could get your telephone from.

Sky is dominant in satellite, Virgin is dominant in cable.  I don't see anyone moaning about their dominance and saying that they must allow access into their markets. 
 

So the fact that Sky and TT together have way more lines than BT is irrelevant?   
Im not sure where you were but LLU wasnt quite a breath of fresh air you seem to make it out to be.  IMHO 2 two best LLU providers have now long gone, both swallowed up by Sky. 

Sky and TT are neither whiter than white.  TT had a history of slamming and Sky has a track record of swallowing and mergers then increasing prices. Once upon a time Sky TV was £6.99 pm whilst Sky ate up all their competitors, then within a few years and there were no other stat providers, Sky's monthly fees had gone up to £16pm and you had to pay extra for sports & movies etc whereas previously it was all in.   The price increases literally did go sky high within just a few short years once all competition had been removed.

Simple questions:-

Why shouldn't BT buy EE?  They were up for sale, they approached BT.  Who ever bought them would end up with the monopoly.
So if sky bought them, then they would have the monopoly for satellite and mobile.  If Virgin bought them, they would had monopoly on cable and mobile.   Someone had to buy them, and who ever it was ends up as major player. 

What are BT supposed to do, sit by and do nothing and let the company dwindle to nothing.   Give all their assets away for peanuts.   They are a company just as any other.  None of the big companies are whiter than white. They all want to make a profit.

Whats the big deal as long as its run as a separate entity.  If you dont like them.. dont use them.
You really seem so tied up with your Beast theory that you dont seem to be able to see that there's 2 sides to the coin.

[pedro492]

But one thing is plain for all to see – acquisition of EE will put BT in a position of market dominance that cannot be good for anybody other than BT shareholders. For a company to have such market power without legally binding responsibility to its customers (in the sense that the NHS has certain legal and ethical responsibilities) is a hugely unhealthy position; ‘customers’ being not only those of BT Retail but also Openreach.

The answer is to separate Openreach lock, stock & barrel from the rest of the industry and, particularly, to sever all corporate ties between Openreach and the remainder of BT (with the possible exception of the pension scheme).

Furthermore, I cannot believe that the upper echelons of BT towers are not prepared for this. Just how much nous does it take to realise that BT's monopoly of the infrastructure (Openreach), when combined with its current pre-eminent retail market position plus an entire newly-acquired mobile network, is simply too dominant a position?

Good call, Pluto.  It scarcely needs saying, but there are *lots* of hidden interests on internet forums.  Loads of operatives work them with hidden agendas; there are many forum "perps" on the payroll of corporations or else working for outsourced "third party" PR teams - yet posing as members of the public.

Let's think it through.  What use is an Official Corporate Statement on anything?  Who instinctively believes a Corporation telling us how wonderful it is?  Did anyone believe BT when it said in its (false) advertising that its HomeHubs had the fastest and very best wi-fi in the land?  Nope.

It's much more effective when companies outsource that propaganda to covert "perception management operatives", who pretend to be Joe Public. Working internet forums where they pose as you-and-me, and then insidiously promote the corporation, its products and its services, at arm's length to the company itself.   Those forum operatives can make any phony claims they want, without risk of any censure whatsoever for false advertising from the toothless goons at Ofcom and the Advertising Standards Authority!      Touching a nerve anyone?

[HPsauce]

Touching a nerve anyone?

Nope. 

But I do wonder who pays you......   

[pluto]

It scarcely needs saying, but there are *lots* of hidden interests on internet forums.  Loads of operatives work them with hidden agendas; there are many forum "perps" on the payroll of corporations or else working for outsourced "third party" PR teams - yet posing as members of the public.

But I think it needs to be said: I doubt that anyone here is working a secret agenda for The Beast.

Let's not get too paranoid 

But I do happen to believe that the time has come when Openreach needs to be further separated from BT to a sufficient extent that it can see and be seen to be entirely independent of the latter.

[pedro492]

Yup, BT Openreach needs to be de-merged from the rest of the BT Group.  That's what plenty of experienced commentators and industry insiders have been saying for a very long while.  But unsurprisingly there are those who have -- in one way or another -- their fingers-in-the-pie at BT, and they disagree, vehemently.

How and when could BT Openreach be spun off?  Well maybe time is of the essence?

BT recently announced that it plans to absorb its Wholesale division into Openreach, Officially for the synergies it might gain.  But maybe there's another reason? Perhaps to ensure it's much more difficult for Ofcom to later demand that - for competition reasons - BT *must* de-merge Openreach.  But with BT Openreach and Wholesale all glued together as one unholy mess, de-merging what was formerly Openreach would be even more difficult.

Not unlike Microsoft deliberately entwining the code for its Internet Explorer browser deep within the Windows kernel itself.  That's the absolute no-no of competent software engineering - which normally strives for low coupling and high cohesion between kernel- and user-space code (or any code, for that matter: keep everything sensibly modularised with clear software interfaces between the modules).

Again, if you're comfortable thinking outside the box here (a.k.a. believing in "conspiracy theories") that embedding of browser code  was done deliberately to stifle regulators. They were demanding that Microsoft stop bundling Internet Explorer with Windows.

Bundling Internet Explorer with Windows, the regulator argued, was inhibiting competition in the browser market by stalling consumer take-up of alternative browsers.  Microsoft's official response to that order to unbundle was: "It can't be done; too difficult. Sorry!"  In fact it could be done, and eventually, after much argument, it was done.

As for how Openreach could be de-merged from British Telecom? Can that be done? Of course. For proof, we should look perhaps at the slightly less disastrous privatisations from the 1980s and 1990s - e.g. the flotations of the former gas and electricity boards which saw their distribution networks, generating plant and supply networks all separated.

[  As an aside, the policy of "selling off the family silver" - privatising our national utilities - was attributed to the governments of Conservative prime minister Margaret Thatcher. In fact she got the blame (or credit) for policies that weren't really her own.  She was little more than a puppet of the Mont Pelerin Society; an oligarchic private club / think-tank for some of the world's most powerful financiers.  It was those financiers who were actually demanding the state sell-offs - with Thatcher's economic adviser and Mont Pelerin Society member Milton Friedman acting as gopher to Downing Street - ultimately arranging the state sell-offs to benefit the Society's uber-rich members.

There was a little bit of window-dressing to disguise the true intent and scale of this privatisation-looting operation. Remember the propaganda about little old Sid buying his own few shares in the gas board? That was to fool the public into thinking that it too could play the market and make a few bob!   Though the tranches of stock actually allocated to the public were generally quite small - just as with the sell-off of Royal Mail this year.  The public was only allocated a small proportion of the new Royal Mail stock; most of it went by prior arrangement to "institutional investors".   The public also has a nasty habit of selling what little allocations they do get, shortly after flotation. So called carpetbagging. Hoping to make a quick but modest buck, to pay for a new holiday or whatever.  Whereas the financiers tend to play it medium to long term; and use all manner of tricks at their disposal. e.g. planting bearish reports in the media to depress the share price of the newly privatised utilities, before buying up more and more stock from the likes of Sid to slowly, over some years, gain overall control.

Recall that the gas board and the electricity boards were split off from their distribution networks, and floated separately.  Very different to the way the water boards and the telephone infrastructure network were hived off as single companies.   Both of the latter have suffered enormously because of that. There is no real competition in either. The consumer is entirely at the mercy of the regulator when it comes to price controls.  In the case of the water boards, the same scam is playing out as we speak in Ireland; where Irish Water is being prepared for privatisation - on the orders and instructions once again of the Mont Pelerin Society, and much to the disgust of the Irish people.  ]

Consequently, many people think that a monopoly, as indeed we've got with BT Openreach and with Thames Water, for example, is best as a state monopoly.  It's really not palatable to have no free market - no real competition - in a privatised industry - not when private financiers are creaming off a huge profit from something that is a necessity of life.  If you can't create competition then nationalise it.    In the telecoms sector, at least at Openreach level, competition has failed miserably. So nationalise it.

That's my view on what should happen to Openreach:  divest the BT Group of Openreach and bring it back under state ownership.  You could argue that's not affordable - the government couldn't afford to re-imburse the shareholders.  That's not quite how government works; it makes the laws; and we follow them.  And it did exactly that when renationalising the train crash known as Railtrack, doing so at minimal expense to the taxpayer.

Comments?