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Report on investment by UK government on fibre expected
Friday 12 September 2008 09:48:00 by Andrew Ferguson

It would seem the BBC has had someone leak a few snippets of information on a report for the government that looks into the area of investment in future broadband networks. The BBC article went online overnight, with the full report being expected today.

"The BBC has been told that the report says there is no case for the UK government to provide cash subsidies to telecoms firms in order to accelerate the deployment of fibre. "

Extract from BBC News item

A recent report by the BSG suggested that a fibre to the cabinet deployment would cost just over £5 billion for the whole UK, and fibre to the home £28 billion. Which while very large sums of money once spread over a number of years and the number of homes that have broadband starts to look more reasonable - with the pricing we all pay for broadband now a fibre roll-out would not be a goldmine for investors but would put the communications infrastructure in place to perhaps outlast the 21st century.

BT has said it will invest £1.5 billion between now and 2012 on new networks, mainly thought to be FTTC, and Virgin Media is to spend a smaller amount of money to upgrade its network to support DOCSIS 3.0. Firms like Ask4 and H2O Networks are also starting to deploy. So the UK is moving forward which is perhaps why the government is holding back, but a big question is whether this investment by private companies will extend across the whole UK or just cherry pick areas to cover. Alas past experience suggests cherry picking will be the cases.

Perhaps the only way we will see any UK government subsidising broadband roll out en-masse would be if the BT group was to collapse and need under pinning like some financial institutions.

Sitting the other side of the fence, why should taxpayers money be spent subsidising faster broadband if all it means is that people can download the latest Hollywood blockbuster (illegally or legally) faster. Among the decision makers who may still have a secretary to printing out their emails, this may be the view taken, and to some extent it may be. Video over broadband is often touted as the thing that needs faster networks - perhaps the movie studios could invest in the delivery networks to increase their audience.


Posted by CARPETBURN over 8 years ago
Might not sound popular but i support this government decision.... There is no reason at all they should help fund the likes of BT for fibre, clearly competition in the broadband market continues to grow, it doesnt need goverment hand outs, let the companies put their hand in their own pockets to compete with others.
Posted by carrot63 over 8 years ago
So the conclusion is broadly: do nothing, business knows best. I imagine the government will be delighted with the conclusions of the report - it saves them the effort of pumping out one of the "useful contribution to the debate" press releases that usually follow reports that clash with the gov's pre-judged course of action. Depressing.

>Among the decision makers who may still have
>a secretary to printing out their emails

Nicely put, although in some cases I think it's blokes chiselling out ministerial edicts on tablets of stone.
Posted by wispy over 8 years ago
i tend to agree with CB. The companies wont put their hands in their pockets though, because there wont be enough return, because there is not enough demand. There might be a need for some areas to be improved, but there is no need to run fibre to every home.

Some villages in the UK need a by-pass, but that doesnt mean every village in the UK should get one
Posted by Scubaholic over 8 years ago
"If you build it they will come" to quote Field of Dreams. If you watch video on the BBC site the quality hasn't improved that much since the days of 1 & 2 meg esp. in full screen.
There are 2 problems: govt. claims it hasn't the money but can order 2 new aircraft carriers that will have to wait 18 months after launch, at least, before it has any aircraft! Very useful for land-locked Afghanistan.
Posted by Scubaholic over 8 years ago
The other problem is the ISP's, they decided to compete on price & so don't have the money for the upgrades. I used to pay £38 for 2meg & now it's £18 for up to 24 meg. If we want faster speed via FTTC then we will have to pay for it.
Posted by OldWolf over 8 years ago
The prob has been that Our Dear Gov want to have their cake and eat it too. They won't subsidise the building of 21CN (fair enough), but they want (via Ofcom) to regulate it, ie force BT to open it to all the competition. Would you buy a car if the police told you that you had to allow some random oick to drive it, whenever they wanted, and pay less than the cost price?
Posted by OldWolf over 8 years ago
if the other telecoms oicks want a 21CN, they can build their own. BT is no longer taxpayer-owned and should not have to subsidise its competition.
Posted by mishminx over 8 years ago
What the Government could do, is to call for a nationwide fibre deployment. Ask companies to come forward with proposals as to how this might achieved with emphasis on companies cooperating on a shared investment path. As opposed to multiple competing networks.

A nationwide rollout could be a direct threat to both virgin and sky along with every current isp and network provider. So really its in their best interests to cooperate from the ground up which is something Government could encourage.
Posted by Frank22 over 8 years ago
I think BT, who still has a monopoly, must be forced to keep the nation-wide system up-to-date. Listening to friends in other European countries, it seems BT is (once again, because the intro of the intial broadband was very slow too) at the bottom of the league when it comes to progress with fast broadband.
Posted by Dawn_Falcon over 8 years ago
The introduction of BT broadband was wider spread than in other European countries, that's a common misconception.

The problem was BT was allowed to adjust its pricing structure such that only BT itself benefits from high traffic volumes, hence the capping and service reductions.
Posted by chrysalis over 8 years ago
CB has got it wrong I think, more competition will equal less investment as price wars arent really providing sufficient profit, of course on the wholesale side (BT) there can be investment as the profits are good there but on the retail side the price war is too agressive.
Posted by CARPETBURN over 8 years ago
quote"i tend to agree with CB. The companies wont put their hands in their pockets though, because there wont be enough return, because there is not enough demand."

Oh dont you believe it for a second, only takes one company or type of product to start taking off and the others soon scramble to keep up..... Been the same since the first days broadband arrived (think back to early days of broadband and cable internet and tit for tat speeds offered) CONT.......
Posted by CARPETBURN over 8 years ago
Nowadays is no different LLU and ADSL2+ is here and became pretty popular, whats BT new product... opps yep its ADSL2+... Various fibre projects start up (H20 as one example) and oh look low and behold BT find over a billion pounds money they claimed they didnt have suddenly for a fibre service... strange that eh?
Competition for a consumer from business and product offered is good. Government hand outs and domination is bad. BT dominate enough with dodgy slow connections without further handouts from the government.
Posted by CARPETBURN over 8 years ago
Why should a massive organisation like BT, Virgin or sky who have more fingers in pies than a baker and money from various things get even more cash from the government??? If anyone should be getting government handouts its smaller startups like H20 networks, that truely want to bring something newer and faster to the consumer and have the balls to attempt it on a shoe string budget compared to BT, Sky etc etc.
The government should keep their pig noses out of it, unless they are really gonna help innovators instead of just the regular whinger telcos.
Posted by andrew (Favicon staff member) over 8 years ago
H2O are not providing retail service over their fibre, they are laying it and relying on selling it to others who will then sell on a service to the customer.

Fibre roll-out is the history of the cable roll-out repeating itself for those old enough to remember.
Posted by Somerset over 8 years ago
Cable rollout was just TV at the start, later the phone was added and then broadband.
Posted by aciddave over 8 years ago
My two penneth worth, but i've had an idea....

Why doesn't the goverment fibre up the whole country, and then keep it on as a public owned infrastructure, charging the likes of BT etc to use it?
I know it sounds like going back to public owned, but wouldn't it pay for itself within a few years, then go on to create a good income for the government?
Posted by CARPETBURN over 8 years ago
quote"H2O are not providing retail service over their fibre, they are laying it and relying on selling it to others who will then sell on a service to the customer."

Not dissimilar to what regulators would like to see BT and Virgin doing then huh?
Im all in favour of people like H20, it may be wishful thinking but id love someone like them to beat the big boys to it and charge the big boys to use their infrastructure for a change... Not let the government give the big boys like BT buckets of cash to wipe out the smaller competition and hog the market again.
Posted by comnut over 8 years ago
aciddave: no way!! If you think BT is oversized, chronically slow, overpriced, etc, then UK govmnt is ten times worse!!! At least you can *choose* BT, unlike UK govmt taxes & bureaucracy!!
Posted by CARPETBURN over 8 years ago
Not only that comnut but if the government get involved watch how much the prices vary according to income or other such nonsense. If its like other things in this country some unemployed pikey layabout would get fibre broadband for £5 a month while the rest of the hard working people like myself get robbed for £50 a month.... For god sake keep the government and their clueless ideas away from broadband
Posted by Mr_Fluffy over 8 years ago
Sure you can *choose* BT, but what's the alternative? Virgin? I don't think so!

If our infrastructure is to be monopolised it should be publicly owned or otherwise organised in such a way as to be answerable to the hoi polloi
Posted by comnut over 8 years ago
Mr_Fluffy: BT is not the only *supplier* of BB, it only provides the exchange and land-line connection...
You then pay another company(ISP) to manage your usage of this and any other problems that may occur...
A full list here..
Posted by comnut over 8 years ago

shows them by most favored, and most customers...
Posted by Mr_Fluffy over 8 years ago
comnut: "BT is not the only *supplier* of BB, it only provides the exchange and land-line connection..."

Surely the £30 billion possible infrastructure expenditure that is arousing interest and concern at present is to do principally with the exchange and 'last mile' land-line connection monopolised by BT.
Posted by Mr_Fluffy over 8 years ago

I have a comparatively independent and, on the whole, excellent, broadband connection with Be Un Ltd but they are still beholden to BT for the 'wet string' at my end of things and no ISP (including BT!) has much control over the quality of that 'wet string'.

The only alternative is the coax cable (not fibre) that was buried under our pavements with much disruption a few years ago
Posted by comnut over 8 years ago
"exchange and 'last mile' land-line connection monopolised by BT"
well do you know of *any* company that has the cash and ability to do any better for the WHOLE country???

BT's lines cover 90% or more of the UK, mostly due to being the oldest company, going back to the first telephone - So AFAIK it is not a monopoly - If virgin and other lines did not exist, then it would be.

You are very lucky to have a well working connection - even some who have tried BE have found they only get a few megs unreliably!
Posted by comnut over 8 years ago
The main problem with BT lines AFAIK is politics, and the slowness of a giant company... even it's employees are getting sick of it...

To say nothing about BT starting to hate the competition, even though it is aparrently doing a better job than them...
(how else can you explain TT managing 1.5M, when BT can only do 0.5 on an identical line???)

And then BT *allegedly* 'dragging its feet' or charging more for LLU changeovers... Of course, when you want to *change back* it will then cost even more, in terms of both time and money... and note even the ISP gets 'lied to by BT'...
Posted by comnut over 8 years ago
and no, I do not hate BT, it is the 'giant company' effect I hate... big managers with 6-figure salaries, who seem to have lost touch with what is really happening.... - 'they say' this will improve a lot of things, but unless they change their business model a lot, and massively improve CS, I dont see much hope... especially as 'credit crunch' gets heavier and heavier....
Posted by Somerset over 8 years ago
Don't BT cover near 100% of the population?
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