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Future of UK Broadband hangs on who will spend £15bn
Monday 26 November 2007 11:50:07 by Andrew Ferguson

It seems lately we are posting lots of news about people talking about putting fibre into the last mile of the connection between our homes and a central connection point. This continues today with coverage in the Financial Times where it is detailed that Stephen Timms, the competitiveness minister has summoned a number of companies including BT, Virgin Media, BSkyB, Vodafone and Carphone Warehouse.

The meeting is to discuss the building of a true next generation fibre network in the UK. Do not confuse this with the many kilometres of fibre already in place in the ground, most reasonable sized telecommunications providers have their own national fibre network already or rent capacity from someone else. The bit that is missing is the fibre links from these massive networks to our homes (Fibre To The Home - FTTH), or at least the green street cabinets (Fibre To The Kerb/Cabinet - FTTK,FTTC).

It is estimated that FTTH would cost £15bn to do in the UK for the whole country, and FTTC would be cheaper at £7bn. In addition to this most of the major Internet infrastructure in the UK would need upgrading and larger international links would be required to cope with the larger amounts of data flying around.

Virgin Media has a FTTC type architecture already with fibre optic cable to its cabinets in digital areas, and then co-ax cable to customers homes. It is this that makes possible the 50Mbps service promised for next year, but we are concerned that if Virgin Media goes ahead with yet more speed upgrades without improving experience of users on its current products they will sully the reputation built up by Telewest over the last few years and people will leave in droves. Criticism is not just due at Virgin Media a great many providers have networks that just about cope with current broadband usage, there seems little sense in letting us all connect faster if the result will be ever harsher traffic management and actual speeds remaining around 2Mbps at peak times.

"Ultra-fast broadband is going to be a key future technology that will allow our businesses to innovate, grow and create wealth. We need to be discussing today how we can put this new network into place, because delay could be a barrier to the future success of our economy"

Stephen Timms, the competitiveness minister

Unfortunately if we wanted to ensure we were at the cutting edge we have failed and now is not the time for talking, but for actual roll-out. With no roll-out in the next few months we appear destined to remain a number of years behind other countries.

Unless Stephen Timms is about to put some form of incentive on the table, we don't really see things moving forward any faster than they are now. Ultimately if ultra-fast broadband is critical to the UK economy, then perhaps the government should look towards kick starting things by putting some money behind the words. Competition alone has brought us to the point where margins are so slim providers have very little spare capital for any project that does not have an immediate return. It is looking like co-operation rather than competition is needed.

Comments

Posted by herdwick over 9 years ago
The big scary number of £15bn would come down to something like £10/month per property if a high % penetration were achieved. Would people pay £10/month *extra* for a 50M down / 10M up connection - that's the $64,000 (or £15 bn) question.
Posted by Dawn_Falcon over 9 years ago
Well yes, and nobody seems willing to offer a proper premium service for those willing to pay im the residential space. More, 21CN shifts extra burdens onto ISP's, so they're spending on preperations for that rather than network upgrades.

Been saying this for a while - I'd rather have a suitable-for-gaming 1MBit ADSL connection than an up to 8 which isn't. (Fortunately moving away from this house and it's "forget gaming" VM connection.
Posted by Balb0wa over 9 years ago
Were looking at this short term, this fibre network will last a long time , and the people who pay to install it will surely get there money back over a few years. The quicker it goes ahead the better. Theres just a big reluctance to do it.
Posted by Viatel over 9 years ago
Put the fibre into the ground and the consumer services (and therefore revenue streams) will follow (HDTV, HDVOD etc)? Without the FTTH no one can start thinking about what it would be used for but the applications would come as would the revenue.

But one thing is for sure, this proposed national structure needs to be treated like other national infrastruture such as roads or now the rail network. If you simply give it as a gift for an incumbent or allow them to develop it then you'll duplicate the current monopolies that are stifling growth at the moment.
Posted by SimpleRules over 9 years ago
How much did the government spend on a silly train link to get Londeners from one side to the other?

How much was spent "fixing" the god-given gap between Britain and France which was the only thing keeping them away?

How much money is given to the EU every year so some French farmer doesn't need to work or so some German can once again tell Poland what to do?

This government wastes money every day, our PM supposedly cares about competition and the economy of the future, well he could surely cough up £15 bn ... he takes it (and probably looses) more than that each week.
Posted by herdwick over 9 years ago
"Put the fibre into the ground and the consumer services (and therefore revenue streams) will follow" a popular fallacy that didn't work with 3G, the initial ADSL rollout, Be* unlimited nor indeed with CableTV. "Build and they will come" is I'm afraid a triumph of hope over reality.

"Build, go bust, hope the successor does something half decent" is closer to the mark.
Posted by Balb0wa over 9 years ago
The copper in the ground wont last forever, and it will cost a lot to maintain it. Something needs to be done now.

Broadband to the home and 3G are two different things,most people dont use there phone for net and videos, whats the point? People use there net at home all the time.
Posted by carrot63 over 9 years ago
Comparing 3G to home broadband is a poor example. 3G tanked because providers charged stupid money for uncompelling services, without even offering basic open access to the stuff that already existed. 3G is starting to gain popularity because user are being allowed to do what they want, not what they're told. FTTC/H offers the only prospect of moving forward to high bandwidth services such as usable video on demand. The government is besotted with 'online'; if they want the benefits, they'd better start the ball rolling.
Posted by grapevine1 over 9 years ago
Bt even FAIL to deal with reported faults EVEN when they are ENTERED by their own engineers as identified. They then do not even follow up on those faults but even ignore them. Its not surprising that one individual took his concerns to "U Tube" lets hope we see many more soon.
Posted by grapevine1 over 9 years ago
It poses the big question that why cant Government take some form of control back into the network, stop the grant aid etc to BT until they are compelled to bring up to a reasonable standard the line plant out of exchanges to the customers, Stop BT hiding behind the "isolation" of Openreach as a company in its own right for after all Openreach is owned by BT, the consumer cannot take any form of action against Openreach.
Posted by grapevine1 over 9 years ago
Lets see some of the 3G cash to Government going back into the countrys' line plant, just a few Billions should sort it out. BUT this time control the cash flow responsibly thats spent on the customer end of the line plant..
Posted by herdwick over 9 years ago
"why cant Government take some form of control back into the network" ... now let me think :-

MRSA kills 5,000 pa in NHS hospitals
Low cancer survival rates
Kids that can't read
25m personal & bank details lost in the post
Soldiers with inadequate kit and no helicopters

Precisely which aspect of Government is likely to help ?
Posted by herdwick over 9 years ago
If you don't like 3G then look at the other "build and they will come" failures, like Be's 24M service which is at least a step towards FTTH performance but only has 35,000 users.
Posted by Dawn_Falcon over 9 years ago
Yes, it was an major advertising failure herdwick
Posted by Khan over 9 years ago
Believe it or not, they're already doing FTTH in Karachi, Pakistan.
Posted by CARPETBURN over 9 years ago
The solution to this is simple... All we all need to do is be patient for the next 10 years or so unitl the moldy copper has decayed away and bish bash if BT still want peoples money they will upgrade the network. In the mean time for the UK its nothing more than a pipe dream.
Posted by grapevine1 over 9 years ago
Couldnt agree more with CARPETBURNS comments. BT even dont deal with customers complaints then say they never had any complaints. You need to be retired or to be able to spend hours and hours each week to get BT to deal with complaints. Then they Lie. We all want an honourable service provider.
Posted by 2doorsbob over 9 years ago
carpetburn has a point here i live 4.2 km away from my exchange with 63 db attenuation and snr of 7db ..i just manage to sync in at 2mb ..i'm aprox 800 metres away from my cab and its all aliminium with countless joints with no ducting hopeless ..complain and bt say speak to your isp
Posted by 2doorsbob over 9 years ago
your isp says unless your have 512 or less openreach cant be involved ..i've complained to bt customer service who say they will investigate and get back to me in 6 weeks..it seems to me bt are happy to take your money and wholesale there lines but dont want to upgrade
Posted by 2doorsbob over 9 years ago
i dont know if i could trust bt to run fibre to home based on our esetate with tinfoil lines lol ..like carpetburn says we'll have to wait until they rot then they will have to do something
Posted by CARPETBURN over 9 years ago
Quote"its all aliminium with countless joints with no ducting hopeless"
There is a probably illegal way to fix that which involves waiting until the water board or similar are digging holes all over the place and a couple of 20 quid notes... Ya be shocked how quick that 20+ Year old and what remains of it copper wire dissapears making BT replace it LOL (I dont recommend this in anyway shape or form it was infact something i saw happen a couple of years ago with a business fed up with their crackly phone line and BT insisting nothing could be done, 2 days later it sounded perfect LOL).
Posted by lloydio over 9 years ago
My parents have got a place in the mountains in Slovenia and i thought what joke of a connection are we going to get out here. Doing a bit of research i found i could get FTTH which was actually cheaper than the ADSL that was also provided.
Posted by chrysalis over 9 years ago
herdwick adsl did work the demand did follow adsl has high takeup now. My points are these. (a)if it was just done in prioritised areas the cost would be massively reduced. (b)this has to be thought long term payback over dozens of years not a couple of years (c)there wont be demand for a killer application until the technology is already available (d)takeup is much more likely if a established brand name is selling the product aka BT (e)government cam probably offer some kind of incentive which covers some of the costs in the event takeup is below expectation after 5 years.
Posted by CARPETBURN over 9 years ago
f) herdwick is a shareholder and wouldnt like it if BT spent his money LOL ;)
Seriously though when will the likes of BT realise all they are achieving at the moment is short term profit, which if they dont spend to update will only end up costing them in the long term.
Posted by chrysalis over 9 years ago
Yeah he certianly thinks like one only thinking of short term benefits. The following always happens on new tech. 1 - rollout, low takeup, high pricing 2 - takeup slowly builds up 3 - prices drop and takeup accelerates 4 - market saturation 5 - new tech and we start again.
Perhaps he thinks stages 1 and 2 can be skipped? Payback has to be long term.
Posted by uniquename over 9 years ago
Maybe it could all be financed by the loan repayments from Northern Rock :-)
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