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Will next generation broadband deliver next generation benefits?
Monday 09 June 2008 13:40:26 by Andrew Ferguson

Estimates of £15 to £16 billion are often mentioned for the cost of rolling out fibre to the home (FTTH) which in theory should provide a fixed line solution to the home suitable for several generations. Until now no-one has really gone on record in a public manner looking at the benefits such a roll-out could have. Anthony Walker from the Broadband Stakeholder Group (BSG) spoke to the BBC last week regarding the benefits of FTTH at Ebbsfleet Valley

The BSG has produced two documents, one providing a Framework for Evaluating the Value of Next Generation Broadband, and the second Models for efficient and effective public sector intervention in next generations broadband access networks. Both documents were launched at a Beyond Pipe Dreams conference today.

The massive £16bn figure which grabs the headlines would in theory provide FTTH to some 80% of UK homes. The report does recognise that there are differences in getting services to different parts of the country, namely that a pure commercial driver may mean parts of the country will never see the service and that roll-out is likely to be a lot slower than previous ADSL deployments.

So where is the UK in terms of fibre roll-outs? Well there is some greenfield activity like Ebbsfleet Valley, and H2O Networks are at the vanguard in terms of wiring up existing homes with its fibre through the sewer network. Ask4 is a fairly new entrant rolling out 25Mbps Metro-Ethernet connections in luxury city apartments (an opportunity we are surprised has taken so long to be taken up). Virgin Media (VM) with its DOCSIS 3.0 fibre/co-ax hybrid planned rollout in 2009 could see a reasonably large part of the UK having the option of access to a 50Mbps service, and if some TV channel space were taken over speeds of 100Mbps would be possible.

The obvious missing player is BT Group which keeps re-iterating the need to be able to justify to its shareholders that any such investment will yield a sufficient return. Some communications providers it is thought are looking at at a 'halfway house' Fibre to the cabinet (FTTC) deployment, which could see consumers in the UK finally getting access to VDSL2 which can run at 50Mbps not too dissimilar from VM's cable services, or even 100Mbps for short lines.

The level of diligence in planning any large scale roll-out of FTTH is well advised. Milton Keynes is a town suffering from what seemed to be very advanced thinking in its day seeing BT roll-out a cable TV service, but the current owner of that network, Virgin Media, is now stuck in a technology backwater.

The danger is that the UK will stay in that brilliant middle management tactic of endless committees without having to do any real work and the public believing action is being taken when in fact nothing is happening.

We look forward to being able to run news on announcements of FTTH deployments, but there is a real worry that we may simply see developments in the major cities and towns only to find in 2020 still have 30 to 40% of telephone lines running on ADSL.

Of one thing we are relatively certain--Fibre is the future. It is possible at present to deliver multiple wavelengths of 10Gbps or more through a single optical fibre and faster services are just around the corner. It is likely that any developments in the fields of communications will exploit the properties of fibre networks, so the investment, and potential benefits are most certainly long term ones. Whether such an outlook is attractive to commercial operators in today's regulatory climate is a matter for the government to consider.

Comments

Posted by timmorris over 8 years ago
The cost of FTTH for the vast majority of the UK would cost about the same as Ken's Crossrail project. Crossrail would benefit a relatively small proportion of the population whereas UK wide fibre could have a huge impact on the country. My brother has just started tele-commuting using our 8Mbit DSL connection - it means he no longer has to get up at 6:30 and spend an hour each way in his car every day. The government has got to put its hand in its pocket if we are to compete on the world stage.

Tim
Posted by chrysalis over 8 years ago
Of course these projected costs of nearly 20 billion (was few billion lower few months back) are exaggerated as they been used to justify not rolling out. If a rollout was done to only urban/suburban areas and they specifically only target high attenuation aras the cost would be nearer 5 billion.
Posted by lloydio over 8 years ago
Im just wondering how much BT spend on engineers mucking about with old technology when they move people on from ADSL > LLU > ADSL MAX > ADSL 2+ for the sake of a couple of extra mb/s?? once they have invested in fibre it would be a matter of having the bandwidth surely?? Rather than fiddling in each exchange?

Also huge benefits would be gained for the country’s economy. When France got 100mb/s lines, media company’s relocated there business’s from all around the world.
Posted by herdwick over 8 years ago
Where's the £20bn come from ?

Reducing the cost to £5bn does of course reduce the benefit by at least a similar proportion.

What is the business case for the £5bn or indeed the £15bn ? Absent, that's what.
Posted by chrysalis over 8 years ago
unless we sitting on BTs board how do we know what business cases have been put forward, hang on my MP is now a member on the board maybe I should ask her.
Posted by uniquename over 8 years ago
Two quotes from your article Andrew that I think others should read again:-

"Of one thing we are relatively certain--Fibre is the future. It is possible at present to deliver multiple wavelengths of 10Gbps or more through a single optical fibre and faster services are just around the corner. ?
Posted by uniquename over 8 years ago
It is likely that any developments in the fields of communications will exploit the properties of fibre networks, so the investment, and potential benefits are most certainly long term ones".

"The level of diligence in planning any large scale roll-out of FTTH is well advised. Milton Keynes is a town suffering from what seemed to be very advanced thinking in its day seeing BT roll-out a cable TV service, but the current owner of that network, Virgin Media, is now stuck in a technology backwater".?
Posted by uniquename over 8 years ago
We must not forget BT will know an awful lot about possible developments that we haven't even heard of. What do we know of non-technology implications and superconductivity at ambient temperatures?
Posted by bezuk over 8 years ago
I just hope one of these next-generation providers starts to think about upstream speed. Of the ones listed, only Ask4 offers a "next generation" upload. VM and Ebbsfleet are very disappointing.

I'll be very intersted to see what H2O announce. For me the benefit of the new services will be mostly lost if only the downstream increases.
Posted by KarlAustin over 8 years ago
Where on Earth have you randomly pulled £5bn from? Have you actually looked in to how much it costs to trench fibre? Not to mention the equipment costs (even with 60% discount). It's costing BT more than £5bn to go to 21CN - and there's a lot lot more work involved in FTTH, 21C doesn't involve half as much digging or blowing of fibre as FTTH would, nor the optics etc.
Posted by CARPETBURN over 8 years ago
quotes"Where's the £20bn come from ?"

Well if BT had any sense out of fat greedy shareholder pockets, but we all know they dont have any sense so its down to others to slowly roll it out like has started to happen.
The most accurate statement in the story is "Of one thing we are relatively certain--Fibre is the future." Like it or not its gonna happen sooner or later and its gonna cost.... get over it
Posted by KarlAustin over 8 years ago
lol, I love how it's wrong to make money these days. Without those "fat greedy shareholders", BT would be nowhere, neither would Virgin, neither would O2/Be, in fact, non of the major BB players would be anywhere right now.
Posted by andrew (Favicon staff member) over 8 years ago
One assumes that all those complaining about greedy shareholders have checked with how their bank invests their savings, or their pension company.

You do not have to be holding shares personally to at some level be involved.

Commenting on pros and cons is fine, but blindly attacking anything a company does means any sense will get ignored.
Posted by chrysalis over 8 years ago
going fiber probably wouldnt need as much digging as you expect there is ducts already in place. I got 5 billion from there 20 billion as I think they could just fiber up a quarter of lines taking into account skipping rural areas and skipping low attenuation areas. Plus I believe their 20 billion to be exaggerated anyway, the figure changes with every news article usually upwards.
Posted by chrysalis over 8 years ago
andrew of course, but everyone needs a bank in todays world so that cannot be avoided. If only we had a not for profit bank which was happy breaking even.
Posted by CARPETBURN over 8 years ago
quote"Commenting on pros and cons is fine, but blindly attacking anything a company does means any sense will get ignored."

The same could be said for blindly defending them, but that never gets mentioned here when its BT, we are all spose to love them and approve of them wanting the government to help them out with fibre, even though its my taxes..... Well sorry no let them foot the bill for their outdated network. Just a tad different to a bank or pension scheme where i made the CHOICE to invest my money
Posted by Pigmaster over 8 years ago
Isn't the 2012 Olympics costing this much, and to be honest what would you have..
3 weeks of sports and then empty stadiums or FTTH for the UK.

Same price what lasts longer and provides better value for money
Posted by Somerset over 8 years ago
So if the BT network is outdated, what should it be repleced with and how will a UK wide replacement be funded?
Posted by HiPing over 8 years ago
Posted by Somerset
"how will a UK wide replacement be funded?"
Scrap the London Olympic games and the London cross city rail link.
Posted by CARPETBURN over 8 years ago
quote"how will a UK wide replacement be funded"
Well for starters cut out the shareholders, there is a few million each year.... stop reducing prices ebbsfleet and charge what it costs... theres a bit more money.... oh and the new 90 quid thing to come and fix BT customers connections, add that to the fibre kitty.... need i go on... BT are just cash cows that dont want to invest, they only invest when forced like their ADSL2+ LLU becomes popular so they upgrade to ADSL2+ also..... smae will happen with fibre, they will do it when they have competition taking customers
Posted by CARPETBURN over 8 years ago
How about the new 100% mark up charging people 60p per additional gig rather than 30p also gets added to the fibre kitty.... Oh and the new subscription fees on BT vision... can anyone say mooooooo BT one big cash cow, our government though are dumb enough to believe they need help with investment, so those fools are just as bad
Posted by Somerset over 8 years ago
This is nothing to do with the retail side, it's how Openreach would fund it.

It gives fibre access to both BT and LLU companies.

So if there is money for Crossrail why not this?
Posted by CARPETBURN over 8 years ago
quote"This is nothing to do with the retail side, it's how Openreach would fund it."

My god im not even gonna give that a response, if you dont think a joint company in business shares profits, or provides funding to each other you really are dumb, openreach are part of the BT group just as BT retail is... How about they take the money from other shareholders pockets and put it all in openreaches.
Its not the governments job to fund private telecoms providers... Unless you are saying the government helped all the LLU providers and new fibre providers like h20 get up and going.
Posted by CARPETBURN over 8 years ago
BT are must be one of the most profit hoarding organisations in this country, its about time they spent some serious money instead of just fobbing people off with dribble, constantly promising things.... The latest example is ADSL2+ and how according to some here it would be cheaper for the consumer and because its cheaper for BT lead to more relaxed caps..... The reality to that promise though just like all their promises is a big HAHAHAHAHA
Posted by andrew (Favicon staff member) over 8 years ago
Some facts rather than rants...

ADSL2+ is the same cost over the local loop as ADSL, as would VDSL2 come to that.

ADSL2+ is in WBC and WMBC in terms of per Mbps purchased by a BT Wholesale customer is coming it at a lower price than IPStream products, and over the last three years IPstream has reduced in price.

Of course more reductions would be nice, so would a free Ferrari too.
Posted by Somerset over 8 years ago
So why just BT, shouldn't all the ISPs fund installing fibre?

LLU providers and H2O can pick and choose where they go, ie where they make money. This does not help people in other areas.

What about unbundling Virgin Media?
Posted by CARPETBURN over 8 years ago
quote"ADSL2+ is the same cost over the local loop as ADSL, as would VDSL2 come to that.
ADSL2+ is in WBC and WMBC in terms of per Mbps purchased by a BT Wholesale customer is coming it at a lower price than IPStream products, and over the last three years IPstream has reduced in price."
Then why is its cost per Mb to a customer buying a BT based ADSL2+ service from the likes of enta more expensive or hardly any different? What happened to the talk that was in the forums months back with some saying there wouldnt be caps or they would be massively higher huh??? (CONT)
Posted by CARPETBURN over 8 years ago
I dont see it i just see same small caps... Maybe im looking in the wrong areas, can you point me to a BT based ADSL2+ service with lets say a 100gig cap that is vastly cheaper on MY POCKET than an ADSL MAX product from the same company was? That would be appreciated :)
Posted by CARPETBURN over 8 years ago
quote"So why just BT, shouldn't all the ISPs fund installing fibre?"

Thats not a bad idea, maybe some type of scheme where if they want to supply it once its running they have to contribute to the cost... the smaller the ISP the less they contribute, the larger the more they contribute.... Work it see based on company profit they all contribute the same or as near as possible same percentage and fibre could be rolled out in no time. I freely admit i dislike some of BTs methods but i will also admit some ISPs are just as bad, make them all pay would be a solution.
Posted by CARPETBURN over 8 years ago
quote"LLU providers and H2O can pick and choose where they go, ie where they make money. This does not help people in other areas."
The same could be said for the situation now anyway... If you have a BT line and are miles from the exchange your internet is not as fast as someone next to the exchange anyway.
Posted by CARPETBURN over 8 years ago
quote"What about unbundling Virgin Media?"
I mentioned previously in another news story about splitting the country up and giving other companys the chance of using cable (kinda similar to the USA, though yes i know there country is bigger). Competition leads to lower prices and customer choice, so im all for things like that.
Posted by KarlAustin over 8 years ago
Hand on, you're complaining about BT reducing prices and having no money to invest, then you say competition leads to lower prices - yes, and no money to invest further down the line, talk about contradicting yourself. You need your head read I'm afraid.
Posted by Somerset over 8 years ago
'splitting the country up and giving other companys the chance of using cable'

Wasn't that how cable TV started? And now it's nearly 100% VM.
Posted by CARPETBURN over 8 years ago
quote"Hand on, you're complaining about BT reducing prices and having no money to invest, then you say competition leads to lower prices"

I did not complain, i simply ask for an example where you can get a BT based ADSL2+ service for less than MAX ADSL. If you look at their so called reductions they are not reductions at all as they have started to introduce additional charges for other services like BT vision. Along with increases in price of extra gigs if you are a customer. BT here are basically a monopoly just as Virgin now is a monopoly in the cable market.
Posted by CARPETBURN over 8 years ago
quote"'splitting the country up and giving other companys the chance of using cable'
Wasn't that how cable TV started? And now it's nearly 100% VM."
Not quite how it started, you are basically right in saying its as good as 100% Virgin cable now though.... An older smaller family ran cable company used to supply my road and a few other areas near me. Until about 3 years ago, when finally having virgin cable in my road killed them off, not due to lower prices or better services, but them offering broadband and phone also... (CONT)
Posted by CARPETBURN over 8 years ago
Many snapped it up and after their first year spat on and didnt want to know them anymore due to the whole service basically in simple terms being useless. The majority when you speak to them want the other company back, when i point out they are idiots for going to virgin and that why the small company is gone you just get a blank dumb look from them. Competition in this country for some reason is frowned upon, people are stupid and think the offer of more equals getting more, the reality is it doesnt and never will without real competition.
Posted by Speedingfine over 8 years ago
20 Billion My Assssssssssssss

There is only just over 20 million households in the UK!

Do the Maths.
Posted by CARPETBURN over 8 years ago
LOL Speedingfine..... you are gonna be in trouble for that remark, how dare you defy the maths of the oh great one named BT LOL
Posted by BlackAle over 8 years ago
£1000 per household
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