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Author Topic: Plusnet Low & High cost area  (Read 25258 times)

kitz

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Re: Plusnet Low & High cost area
« Reply #60 on: January 10, 2016, 08:14:50 PM »

Market A and Market B have been around long before 2013 and are what OFCOM rule the pricing should be

It is entirely different to market 1,2,3 etc, which is the current market type based on the original  criteria laid out here

The market numbers 1,2,3 form the base critera used by OFCOM to decided if the price band should be A or B.   They used to project some exchanges at review.. ie although an exchange may now be market 2, OFCOM may project that within 'x' months it will be market 3 and therefore place it in price band B.

Originally it was envisaged that OFCOM would undertake regular reviews, but that seems to have fallen by the wayside with the last review being 2010 :(
My own exchange was moved to Market B in about 2007 by OFCOM.    Market 2 exchanges could be either A or B based on OFCOMs decision.

TLDR;

Market Numbers [1,2,3] = Market Type based on number of operators.
Market Letters  [A or B] = Market Price Banding decided by OFCOM.

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burakkucat

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Re: Plusnet Low & High cost area
« Reply #61 on: January 10, 2016, 08:18:50 PM »

I just noticed something else which could muddy the water further.

<snip>

So if this is the case then, although port costs are now the same, it looks like the pricing differential is now made at the access point to the backhaul, rather than on the ports.  AP costs will apply to both 21CN and FTTC  :(

And that is a significant pricing differential!  :'(
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gt94sss2

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Re: Plusnet Low & High cost area
« Reply #62 on: January 10, 2016, 08:58:40 PM »

Market A and Market B have been around long before 2013 and are what OFCOM rule the pricing should be

Market Numbers [1,2,3] = Market Type based on number of operators.
Market Letters  [A or B] = Market Price Banding decided by OFCOM.

Actually, I am pretty sure one replaced the other in 2013 - which is when Market A and B were introduced.

From the Ofcom 2013 consultation

Quote
1.10 This is now the fourth such review of the WBA market, the last of which we completed in 2010/2011. In that review we defined four markets:

    the Hull Area, where KCOM was the sole supplier of fixed broadband access;
    Market 1: exchanges where only BT was present or forecast to be present;
    Market 2: exchanges where two Principal Operators (including BT) were present or forecast to be present or where three were present or forecast to be present, but BT's market share was 50% or more; and
    Market 3: exchanges where four or more Principal Operators were present or forecast and exchanges where three Principal Operators were present or forecast but where BT's share was less than 50 per cent.

and in 2013, this was replaced by the following which now determines if its a high cost area or not:

Quote
1.18 We propose to identify three distinct geographic markets, to reflect the geographical differences in competition and supply conditions:

    Market A: exchange areas where there are no more than two Principal Operators (POs) present or forecast to be present, which accounts for 9.6% of UK premises.
    Market B: exchange areas where there are three or more POs present or forecast to be present, which accounts for 89.7% of UK premises.
    The Hull Area: 0.7% of UK premises.

Its the reference to BTw Pricing Band E which was new to me but I guess thats another way of saying Market A in this context

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ejs

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Re: Plusnet Low & High cost area
« Reply #63 on: January 10, 2016, 09:37:08 PM »

Apologies, I did not spot the difference in AP costs between market A and B. Wouldn't those AP costs be kind of "fixed" though, in the sense those AP costs wouldn't vary depending on the number of market A end users an ISP had, so long as they had at least one market A end user on each AP?
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kitz

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Re: Plusnet Low & High cost area
« Reply #64 on: January 11, 2016, 01:30:15 AM »

There has definitely been something since before 2013 which has been used to differentiate the Market and the Pricing.

Many years ago (circa 2008) there was a long thread on TBB because I got my mits on information and a pricing list that showed some market 2 exchanges should be paying the cheaper rate and I updated by checker to show the new exchange data.   The huge thread on the TBB Plusnet forums erupted because Plusnet were only charging the cheaper rate for Market 1 exchanges.   The new pricing bands meant that many Market 2 exchanges should be paying the cheaper rate, but weren't.   
The result of this was that Plusnet changed their billing system to include all Market 2 exchanges at the cheaper rate, regardless if it was Band A or Band B.   I think it must have been quicker & easier for them to do it this way than start a new database for billing.   The CS person who had to deal with the backlash at the time was called Mandy. I think some of this is still historic in their systems even today.

I cant recall the exact date, but it happened at around the time I was about to, or just had migrated to Be in March 2008.   It was installation of the Be MSAN that took us into the cheaper pricing bracket and why I was so aware of it despite being Market 2. 
ETA:  It was probably OFCOMs full review 21/05/08.

Because I was now showing different info to Sam, I emailed Sam with the latest info and copy of the data so he could update his records too.
Sams API was rewritten in early 2009 specifically to include both the Market Classification and the Price Banding

Code: [Select]
Version 3.71
23 January 2009

Starting with version 3.71, an additional option named “market” may be passed to the API.
This adds a “market” node beneath the “exchange” node, which contains sub-elements
detailing the market classification of this exchange. At present there are two possible subelements
of the market node:
1. BTBand – The “band” that BT deems this exchange belongs to. This is used by BT
Wholesale to set 21CN pricing. Bands range from A-E, although B and D are unused
at this time. An empty string for the band indicates that the band is unknown.
2. OfcomMarket – The market classification that Ofcom has assigned to this exchange.
Broadly speaking, Market 3 is defined as those exchanges with a heavy LLU/cable
concentration, Market 2 is those where there is some LLU/cable presence, and
Market 1 is where only incumbent (BT) services are available.


Example of raw data output from Sams checker v 3.71 Jan 2009 showing both the market no and the pricing band.

Code: [Select]
<Market>
<Btband>A</Btband>
<Ofcommarket>3</Ofcommarket>
</Market>
</Exchange>

An email was also issued to anyone using the API

Quote
Wed 18/02/2009 13:20

Hi,

As you are now no doubt aware, PlusNet are now pricing their products based on geographical location and hence the Ofcom Classification of an exchange needs to be known. This has been included in the API, and information on this can be found on page 23 of the documentation.

I have quite a lot of correspondence in my mail archives from 2008/2009 regarding the two separate Market classification databases. iirc Sam called the other one BT banding, because that is what BT were charging the ISPs.



----
I used to hold the Market info in my own database, but since Oct 2011, I replaced it to pull data Market data from Sam's database rather than me having to keep an eye on what was going on with OFCOM & BT.

----

Quote
Its the reference to BTw Pricing Band E which was new to me but I guess thats another way of saying Market A in this context
Me too..   
... and just to muddy the water further, happened to notice mine is Band C although no idea when it changed  :-X

Note that it still fits in though with the original description dating back to 2008.
Out of interest are those on C & E all FTTC?
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kitz

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Re: Plusnet Low & High cost area
« Reply #65 on: January 11, 2016, 01:30:53 AM »

Apologies, I did not spot the difference in AP costs between market A and B. Wouldn't those AP costs be kind of "fixed" though, in the sense those AP costs wouldn't vary depending on the number of market A end users an ISP had, so long as they had at least one market A end user on each AP?

Yep..  fixed per AP.
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ejs

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Re: Plusnet Low & High cost area
« Reply #66 on: February 15, 2016, 01:13:41 PM »

I just noticed something else which could muddy the water further.

Whilst the port costs for the 2 markets may now be the same, the AP costs (which form part of the MSIL) vary depending upon the Market type.
Im going from the WBC price list as I dont have a current WBMC one... but it will have to be factored into WBMC and will form part of the WBMC charges.

Look

Code: [Select]
AP national coverage (combined with IPsC CP Handover option) - Market A 12 Months 01/07/2014 Month £20,968.00
AP national coverage (combined with IPsC CP Handover option) - Market B 12 Months 01/07/2014 Month £6,532.00

So if this is the case then, although port costs are now the same, it looks like the pricing differential is now made at the access point to the backhaul, rather than on the ports.  AP costs will apply to both 21CN and FTTC  :(

I've just looked at the latest WBC price spreadsheet, and noticed that the market A and market B prices for those things are now the other way around:
Code: [Select]
AP national coverage (combined with IPsC CP Handover option) - Market A 12 Months 01/07/2014 Month £6,532.00
AP national coverage (combined with IPsC CP Handover option) - Market B 12 Months 01/07/2014 Month £20,968.00

To try and see which is correct, I looked back at the older price lists with markets 1,2,3:
Code: [Select]
AP national coverage (combined with IPsC CP Handover option) - Market 1 12 Months 01/04/2011 Month £8,057.50
AP national coverage (combined with IPsC CP Handover option) - Market 2 12 Months 01/04/2011 Month £4,400.00
AP national coverage (combined with IPsC CP Handover option) - Market 3 12 Months 01/04/2011 Month £15,042.50

It seems like the main justification for Plusnet's higher WBC / FTTC prices outside the low cost areas was actually a mistake in the price lists, and it's Market B that has the higher cost in that part of the price list.
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kitz

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Re: Plusnet Low & High cost area
« Reply #67 on: February 15, 2016, 03:33:03 PM »

Now Im totally confused at the reversal of those figures.

The exchange bands are:-

Quote
Market 1: exchanges where only BT was present or forecast to be present;
Market 2: exchanges where two Principal Operators (including BT) were present or forecast to be present or where three were present or forecast to be present, but BT's market share was 50% or more; and
Market 3: exchanges where four or more Principal Operators were present or forecast and exchanges where three Principal Operators were present or forecast but where BT's share was less than 50 per cent.

The really old price bands were A,C,E -> Dense, Mid, NonDense.
Then OFCOM redefined as

Quote
   
Market A: exchange areas where there are no more than two Principal Operators (POs) present or forecast to be present, which accounts for 9.6% of UK premises.
Market B: exchange areas where there are three or more POs present or forecast to be present, which accounts for 89.7% of UK premises.

As we propose that there is effective competition in Market B we do not propose any regulation.

I thought that the original idea was supposed to mean that Market A pricing could not be offered too cheaply and thereby discouraging other providers entering the market at that particular exchange.  BT could charge what they liked on market B and lower prices to compete with the LLU providers who arent subject to regulation.   It was supposed to encourage LLU providers to put their kit in exchanges where BT had a monopoly.

However I read this from 11th July 2013 review

Quote
1.20 In 2010, we found 77.6% of the country to be effectively competitive.   ../snip/..

Based on our proposed finding of market power in Market A, we consider there is a risk of various competition problems including: refusal to supply, undue discrimination, margin squeeze and excessive pricing. We propose to place general access and non-discrimination obligations on BT. These obligations would ensure that other CPs have the opportunity to use wholesale products supplied by BT to compete effectively at the retail level.

../snip/..

We also propose that BT's services in Market A should be subject to a price control in order to ensure that BT does not set excessive prices for wholesale broadband services which would ultimately be passed on to consumers.

../snip/..

 1.24 We are also proposing to set sub-caps on the following services:

   Contracted bandwidth.  [ie the APs]
   End-user access rental. [port costs]
   Some ancillary services: migration, re-grade and cancellation charges.


Now OFCOM seems to be saying Market A should be cheapest. :hmm:
Surely this discourages new LLU investment?
Have I got that right?
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ejs

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Re: Plusnet Low & High cost area
« Reply #68 on: February 15, 2016, 04:20:06 PM »

I thought those Ofcom documents say it only applies to IPStream Connect bandwidth. Table 7.1 in that 2013 PDF lists all the aspects of IPStream Connect with the charge controls. Regarding WBC or FTTC, it only says things like where IPSC is withdrawn (after WBC arrives), consumers should not be made worse off. I have been mainly reading the final statement (WBA-Statement.pdf) from June 2014.
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renluop

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Re: Plusnet Low & High cost area
« Reply #69 on: February 17, 2016, 12:05:52 PM »

Has anyone a good guess as to the proportions of high and low cost area users, and what revenue neutral price adjustments would be needed to achieve equal EU pricing?
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gt94sss2

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Re: Plusnet Low & High cost area
« Reply #70 on: February 17, 2016, 01:15:30 PM »

Has anyone a good guess as to the proportions of high and low cost area users, and what revenue neutral price adjustments would be needed to achieve equal EU pricing?

Market A (high cost)covers about 9.5% of UK premises. Market B is 89.8% of premises (the rest is Hull @0.7%).

In trying to work out the number of customers, you will have to take account of the fact that the population density will be a lot less in Market B areas - one of the reasons they are unattractive for LLU operators.
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ejs

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Re: Plusnet Low & High cost area
« Reply #71 on: February 17, 2016, 01:40:36 PM »

I thought the percentages of UK premises already took into account the population density.

Low costHigh cost
Unlimited (ADSL)9.9917.49
Unlimited Fibre14.9922.49
Unlimited Fibre Extra19.9927.49

The high cost area is an extra £7.50 for each package. So, if Plusnet get an extra £7.50 from 1 in 10 customers, they would have to increase the low cost area prices by 75p to get the same revenue from giving everyone the low cost prices.

It seems like it can't possibly be that simple, so I've probably missed out far too much and it's totally wrong.
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ejs

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Re: Plusnet Low & High cost area
« Reply #72 on: February 17, 2016, 01:50:37 PM »

Now OFCOM seems to be saying Market A should be cheapest. :hmm:
Surely this discourages new LLU investment?
Have I got that right?

I'm not sure, perhaps Ofcom have figured out the LLU operators aren't increasing their coverage that much, so the Market A exchanges are likely to remain with only BT present.

The other thing I did notice, from the price lists, is that IPSC bandwidth in Market A is cheaper than IPSC bandwidth in Market B, in case there are a few Market B exchanges that are only IPSC. WBC bandwidth is cheaper than Market A IPSC bandwidth though.
« Last Edit: February 17, 2016, 03:26:36 PM by ejs »
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aesmith

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Re: Plusnet Low & High cost area
« Reply #73 on: February 17, 2016, 03:02:42 PM »

We were discussing Zen elsewhere, their difference is even greater.

Low cost = £16/month unlimited ADSL
High cost = £25.80 for 200GB, £42.50 for 500GB, with no unlimited on offer
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ejs

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Re: Plusnet Low & High cost area
« Reply #74 on: February 17, 2016, 03:42:59 PM »

Is that because you've only got 20CN ADSL1 available though?

Plusnet seem to get away with making people outside the low-cost areas pay more for FTTC, and everyone just accepts that it must be because the wholesale costs are higher due to Ofcom regulation. But the wholesale costs don't seem to be any different, and the Ofcom price regulation only seems to apply to IPStream Connect (20CN ADSL1), which FTTC does not use.
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