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Conservatives: "100Mbps by 2017" and "break up BT monopoly'
Sunday 31 January 2010 13:12:25 by Andrew Ferguson

This morning, Shadow Chancellor George Osborne has promised that a Conservative government would deliver 100Mbps broadband services to the 'majority' of homes by 2017. In an interview for the Andrew Marr show, he also suggested that where the private sector was unable to deliver a solution, such as in some rural areas, the BBC licence fee might be used to fund this.

The suggestion is that the BBC continues to set aside the 3.5% of the licence fee that is currently being used to fund the digital switchover but for this money to be diverted to fund broadband expansion. Exactly what constitutes a 'majority' of UK homes having access to 100Mbps by 2017 is unclear, so we hope this is clarified if it forms part of an election manifesto.

"In the 19th century we built the railways. In the 20th century we built the motorways. In the 21st century, let's build the super-fast broadband network that will create hundreds of thousands of jobs for Britain."

George Osborne, Shadow Chancellor

The current government has promised a Universal Service Commitment (USC) of 2Mbps by 2012 and has also planned a 50p/month levy (the 'broadband tax') which will be used to fund 'next generation broadband' for areas where the market is unlikely to deliver. This levy is expected to raise between £1-1.5bn by 2017 to pay for the 'final third' project to connect the most rural of areas resulting in 90% next-generation broadband coverage. It is not quite clear exactly what 'next generation' means in this context, however we expect this is referring to services in the 25Mbps+ range.

Mr Osborne goes on to compare the Labour government's 2Mbps USC with the promises by South Korea for 1Gbps, although he did not expand on the Conservative policy for delivering basic broadband services in a shorter timescale which may be of concern to those who can't get broadband at the moment. He also proposes the break up of BT to enable LLU operators and cable operator Virgin Media to deliver better services:

"If there are some parts of the country where the market can't get to; because I think the best way to deliver this is by breaking up the British Telecom monopoly at the moment which holds back companies like Carphone Warehouse or Virgin. If we find the market can't do that, then use the BBC licence fee, the digital switchover money in the licence fee, to get broadband out to the rest of the country, but let's see first of all if we can have the market delivering that super-fast broadband."

George Osborne, Shadow Chancellor

The licence fee is currently £142.50 per year, so 3.5% would amount to about £5/year per household. This amount is not too dissimilar to the £6/year levy (50 pence per month for every phone line; although we note that businesses would also be caught in the levy being planned by the government) particularly after factoring in any increases in the licence fee. With around 25 million TV licences in the UK this would raise between £750m and £1bn depending on how quickly it could be implemented and possible rises in the licence fee, perhaps slightly short of the estimates the copper landline levy would be expected to bring in. We are therefore primarily seeing a shift from one type of tax to another.


Posted by cyberdoyle over 7 years ago
The trick to get a real digitalbritain is to do the rurals first. the market will take care of the rest. It is worth the money because it will mean everyone will have access, everyone will have a decent connection instead of the crap copper contended ones they have now, and the people of the UK will embrace a tech that has disappointed them for so long. One of the main reasons for lack of take up is the difficulty in so many areas with the poor connectivity. Osborne will have his hands full delivering his promise. Hunt still doesn't get IT.
Posted by CARPETBURN over 7 years ago
At the moment its nothing more than fluff talk to try to get votes, if they provide more details on many of the things the story mentions it could grab a huge chunk of voters at the moment only the silly would think its well thought through.
Posted by rian over 7 years ago
Seems an exciting declaration.
Posted by jokily over 7 years ago
Exciting, maybe, but boringly and predictably without any understanding of what they're taking about.

Typical politicians making promises they can't deliver and won't deliver in the hope of getting elected. I don't buy this hyperbole and nonsense.
Posted by Dixinormous over 7 years ago
Please explain how 'doing the rurals first' will accomplish anything? I'm looking but I don't appear to see anywhere else in the world where central government has done the rurals first and then the market took care of the rest.

This ignoring the simple question of why my taxes should pay for 'rurals' to have better services than me. This won't mysteriously energise the rest of the UK it'll just anger them.

Would never have known you're a rural dweller with that point of view. If you want to put some facts behind it that'd be great.

Our take up is pretty good by the way - do keep up.
Posted by timmay over 7 years ago
This could be good but I doubt it will have been thought through. 100Mbps means that fibre would/might have to be used instead of FTTC. I don't like the sound of "the majority" as that could be 51% so can simply be achieved by VM offering a 100Mbps service on their cable network. I think that VM and BT need to be combined not overlapped and in the case of VM opened up for wholesale!
Posted by Dixinormous over 7 years ago
Yep - 5th largest broadband market in the OECD, 13th largest by population on June 2009 figures. Not great but better than we do on other metrics. Doing the rurals first makes absolutely no sense apart from to keep you and your friends happy, projects like this are best done where they can cover the largest amount of people in the shortest period.

Spending a billion at the start of a project covering a million people or spending it covering 200,000 hmm decisions decisions...
Posted by Dixinormous over 7 years ago
timmay - re-reading you are right and they are quite clever. Very limited expansion of FTTP will get coverage of 100Mbps services to the majority of the UK given that Virgin will be offering 100Mbit before the end of the year.

Be interesting to see if this makes BT's FTTC redundant in double quick time. Hope so.

Anyway it's election season, they'd promise us all 100Mbps and free porn for life if it got a vote.
Posted by bosie over 7 years ago
Politicians still don't get it - 2017 is too late, by then 100Mbps will probably look as ridiculous as 2Mbps.
Posted by cyberdoyle over 7 years ago
by not doing anything about it this gov has ensured that BT are gonna continue milking the copper for decades, witness the rolling out of fttc at the moment. why rejoice because a chosen few urban areas can get up to 40 meg (depending on distance from the cabinet) when doing fibre to the premises would ensure they could get whatever they wanted to pay for, now or in the future, gigs even. Government couldn't afford to do every city, too many people, but it could do many rural areas of adsl market failure, and that would set a precedent.
Posted by cyberdoyle over 7 years ago
and Dixinormous, this is not about doing it for me an my friends, it is about doing IT for the country. If we don't do something you urban people will be on 'up to 40meg' and we will be on 'up to 2meg', costing a lot of money for little reward, and still not delivering a decent service. BTW how much food, water and energy is produced in urban areas? I don't know why this even has to be a debate between rural and urban. It is a debate about how to stimulate the market to deliver next gen. that is all.
Posted by cyberdoyle over 7 years ago
timmay had the right idea, I don't see the point in two telcos replicating footprints either. One of them could cover new areas. If nec. they could be subsidised. The only advantage in having two is competition keeps the price down. But this is not always good, because you generally get what you pay for, and cheap broadband means contention, which is bad for the users. Comms are a minefield. But if we don't get it right soon this country is gonna become a third world in the global digital economy.
Posted by Dixinormous over 7 years ago
Yes and using government money on rural areas stimulates the rest of the country's deployments... how?

What does food / water / energy have to do with it? We're not dealing with things that, necessarily, require open space, there is no huge benefit to the UK GDP or IT infrastructure in blindly upgrading the most rural areas, businesses aren't suddenly going to start investing in them, it just means more of those urbanites country dwellers complain about will be there happily working from their newly fibred up homes.
Posted by Dixinormous over 7 years ago
It is a debate between rural / urban because you're trying to suggest that upgrading a small proportion of the population at great expense will mysteriously stimulate the market - it doesn't and simply hasn't worked. Rural municipals do NOT stimulate elsewhere and never have.

Munis stimulate the area they are built in, only, and as the sums are all wrong anyway no-one else will build they'll just use that muni infrastructure.

Government can't afford every city but can afford rural areas, some of which are 7 times more expensive per home to pass?
Posted by andrew (Favicon staff member) over 7 years ago
There are 25 million licences for TV in the UK, and assuming these are all colour ones, then by 2017 this amounts to £875 million.

At £1000 per home for FTTH (average figure) that is 875,000 homes
Posted by Richard_Hancock over 7 years ago
Andrew, unless you're writing primarily for an American or international audience, it's "licence" not "license", when you're using it as a noun and not a verb.

The BBC licenses me to watch their services when I purchase a licence. (You actually used the correct spelling in your post, though not in the main article.)
Posted by seb (Favicon staff member) over 7 years ago
@Richard_Hancock that might be my fault as I edited the article quite a bit after Andrew as we had both been working on the same, so it wasn't re-checked after I published it. I should know better. It's fixed now :)
Posted by Somerset over 7 years ago
What's this 'BT monopoly' that's holding back VM etc.?
Posted by c_j_ over 7 years ago
£1000 per home for FTTH? Source (please not BT)?

How much do today's broadcasters pay the transmitter folks (Arqiva?) for the network of transmitters? Or does it not work like that?

Replace 99% of TV aerials (and 99% of Sky dishes and 99% of cable infrastructure) with a universal 20-50Mbit+ to the home, part funded from operational savings on legacy networks and an eventual bandwidth auction.

Want multiple simultaneous channels in 1 house? It'll cost you (as with Sky or cable).

A monopoly (maybe even BT Openreach) could deliver the last mile... let Arqiva not Ofcon drive...

Posted by wigan over 7 years ago
Could do to break VM up then might get decent speeds/service on the up to 20meg.

Every time you ring they want you to unplug everything and reset even after doing it yourself before calling Doh Then when results are the same say "there's a fault and they're working on it"

Having BT reconnected, may use them again as only other option is TT.

Anyway BT is probably so bad because who else in their right mind would carry out investment for parasites to take over.
Posted by revor over 7 years ago
All very well but let us do catch up first. I am in a rural area but only 7 miles from a large university city and the best I can get is 0.13mbps Yes you read it right. This week I spoke to a BT engineer doing service work in our no through road and I asked whether the new cables they had put down our road were fibre optic and he laughed. You cannot believe in this age that they would be putting in new copper cables. He says that in 2012 we will have the exchange which is 7km away on optic but that is far as it will get. It will make a difference but not much I am told. .
Posted by andrew (Favicon staff member) over 7 years ago
£1000 is a ball park figure, i.e. not a firm quote, and Broadband Stakeholder Group did a long study showing in some areas it will be less, and others may rise to £3000 or more.
Posted by mishminx over 7 years ago
The TV tax idea is an improvement upon a phone tax. Not least as it recycles current expenditure rather than introducing new. Not wholly convinced on the breaking of the local loop monopoly. Simply not not enough detail on the implementation and the disaster of a labour government has made cynics of us all.
Posted by drteeth over 7 years ago
I do have to say I don't have much sympathy for people who live out in the country. Nobody is forcing them to either stay there or even move there. The FIRST thing I do before buying a house is to check the local exchange and the length of the copper wire. When I come to sell my house, a full BB spec will be included in the details.
Posted by chrysalis over 7 years ago
cyber you are mislead if you think all suburban and urban will be covered by the market, currently surburban has the most black spots of coverage and also will not all be covered by the market.
Posted by timmay over 7 years ago
@drteeth be careful about what you are saying there!

There are plenty of reasons to live in a rural village. Some of which run back generations, the family home and land/farm/business others include better schools, nice neighbours, space, views and quiet!
Posted by Dixinormous over 7 years ago
Think some areas Andrew went as far as 8k or more.
Posted by cyberdoyle over 7 years ago
we didn't move to a rural area, the family has farmed here since 1426. We grow the food the country eats. To remain competitive we need decent comms infrastructure. If we were rich we would get one of the latest satellites and not worry about the rest. As it is we realise that for the sake of the rural poor someone has to fly the flag. that's all.
Posted by davidmcnaught over 7 years ago
People want & need the internet, they'll pay for it, and will pay more for speed.

Businesses want to to provide services that people will pay for to make money.

LTE & other wireless broadband will probably be well established in rural areas by 2017 making this plan pointless.

In this situation there's NO need for the state to intervene.

If any government 'encouragement' is given to provide ultra fast broadband, it should not be prescriptive of what technology or method is used to provide the service.
Posted by TGVrecord over 7 years ago
Where I live they decided to dig up all the main roads to put down cables. This caused us locals an awful lot of inconvenience but I thought that they would be connecting my town to cable. I was very disappointed when I found out that the cabling for not intended for us.

It is clear that private enterprise will not always provide a service even in a substantial suburban area. Surely it is up to Government to create the right environment to encourage investment in the communication network in such areas.
Posted by AndrueC over 7 years ago
@cyberdoyle:You need decent infrastructure for what? Can they send grain down fibre now? Can you upload milk using it?

People like me living in towns and cities can't find anything to do with more 10Mb/s. What the heck are you lot doing out in the sticks that needs it?

FTTC ought to be enough for you guys with FTTP for urban areas.
Posted by cyberdoyle over 7 years ago
ok Andrue. let them eat cake. I see.
Posted by mikeblogs over 7 years ago
Overall - Tories now proposing some public investment, which is quite a change.
50p on phone rentals v £5pa via TV License - it is still investment.
The FTTH to urban areas has been stated publicly before.

The breakup of Openreach (i assume) could be interesting, but say the leasing of exchange areas so interested parties could do more investment (reducing number of exchanges - what happened the 21C £1bn pa operational savings) is worth exploring, although I am struggling to see any Municipal authorities putting their hands up to invest.

Posted by mikeblogs over 7 years ago
The delivery of fixed and mobile services needs to be seen as one, so we do need a re-write of regulation, including removing some of the PSTN regulation.

Fibre to the hills will need to be own build to an aggregation point, only needed if someone decides they really must receive their TV streams in this manner. Never the less, a cable capable of carrying fibre should be pushed through every duct that exists as far as it can go.
Posted by themanstan over 7 years ago
I agree with CD's take on market forces for urbanised areas and gov supported funding for rural. If the legislation also opened up the other monopoly (VM cable network) giving fast broadband to all would se significantly cheaper to acheive. I would also, recommend a minimum percentage of cabs for BT to call an exchange enabled for FTTC or FTTH... I'd like to see at least 75%... This would reduce the suburban shortfall...
Posted by Dixinormous over 7 years ago
Cyberdoyle - How exactly are the 'rural poor' going to pay for this fibre connectivity if they are so poor?

Presumably the government subsidise that as well?

That or you start complaining about overly contended fibre networks like you are the overly contended copper networks.

I have no idea what you're talking about, the relevance of competition, etc. You grow food, I work in IT, I moved from a small-medium town to London to further my career, we change ourselves rather than expecting the world to change for us and pick up the tab.
Posted by Dixinormous over 7 years ago
Incidentally the Isle of Dogs, that place in travelcard zone 2 near the financial centre of Europe, and all the people there stuck on dial up would probably be quite envious of the crap copper contended connection you have.

What on Earth is this sense of entitlement that so many people seem to have, I just don't get it. If infrastructure isn't appropriate for your way of life you move to it, you don't expect others to pay to bring the infrastructure to you, hardly rocket science.
Posted by michaels_perry over 7 years ago
As a rural broadband user, I would like to see a much faster service than we get now, only just crept over 2 Mbps. But why do some posters think that urban users should get a better service than rural users? We pay the same, so should get the same service. Fibre can easily be strung alongside existing copper so it is cheaper per mile to install than in towns, as no digging or ducting needed. So FTTC or FTTP/H would bring alive all the rural small businesses that would create more jobs and more GDP.
Posted by chefbyte over 7 years ago
Well something has to be done, as we are dragging our heels according to this report
Posted by GMAN99 over 7 years ago
"Posted by Somerset about 19 hours ago
What's this 'BT monopoly' that's holding back VM etc.? " - Exactly, he's well with the times then, you mean the monopoly that was broken with LLU? Oh Osbourne you fool
Posted by SheepFarmer over 7 years ago
Saying that rural types only milk cows and therefore can't benefit from faster broadband is just showing ignorance.

The modern economy requires fast internet connections to be viable - modern farming included. This will be even more important as the years go by. If doing business in rural parts of the UK becomes more expensive, nearly everybody will feel the difference in increased prices for the goods we enjoy today.
Posted by themanstan over 7 years ago
As for telecoms monopolies... there are 2.

BT - you use their infrastructure and you are stuck with that infrastructure, apart from the space you rent from them... and you hope there is space for someone to put their equipment in...

VM - you can't use their infrastructure and you can't rent anything...
Posted by SimonKemp over 7 years ago
As a University sports administrator I attend meetings in London several times a year, travelling there and back by rail -two hours each way! It would be better, cheaper and more convenient to do business from home via a video link but because the upstream speed with ADSL is so poor this isn't possible. What use is 2Mbps download if you really need to upload lots of data?
Posted by GMAN99 over 7 years ago

Sure but they are both private telco companies who have invested to put that infrastructure in place, why should a.n.other telco start up do little/no investment and just leech from others? If a.n.other won't put in their own infrastructure they can use others instead
Posted by SimonKemp over 7 years ago
Am I alone, then, in thinking that slow upload speeds - which are the Achilles' heel of ADSL - need to be improved? Or is there no need/demand for truly symmetrical Broadband which uploads as fast as it downloads?
Incidentally, the South coast mid-way between Portsmouth and Chichester is hardly the back of beyond, but my download speed can drop from an average of 3.5 Mbps to as low as 750 Kbps on busy evenings. Nor have I ever streamed HD content from the BBC's I-Player successfully ....
Posted by themanstan over 7 years ago

pointing out that there isn't one Monopoly in Broadband delivery, but two... so more of a duopoly...

Posted by themanstan over 7 years ago

If reselling was allowed through the VM network like BTs then this nonsense which FTTC competition from BT for VM customers would not be necessary. This is market forces at work... Regulation of reselling is the key here for Broadband Britain... and it simply hasn't happened, the market needs to be nudged in a particular direction. VM can sell via BTs Network, but no one can via VMs. So instead of increasing their network capability and reach to get customers, they compete with each other for customers within cost effective geographical areas.
Posted by Dixinormous over 7 years ago
michaels_perry - You might pay more but your services generally cost more to supply and maintain. I should also mention a number of urban areas have the same issues, it's not some personal thing against rural areas. Your comments regarding cost of rollout are simply not true, the numbers have been calculated and in most cases urban areas are cheaper per home.

Companies want to make money, if you were cheaper to upgrade they would upgrade you, not cities.
Posted by Dixinormous over 7 years ago
themanstan - without infrastructure competition where is the incentive to improve the infrastructure? Look what happened with LLU and wholesale services? A dash to the bottom for low margin, low cost, low quality services which has prejudiced investment, not enhanced it, because people expect unlimited services for a tenner a month, at a stretch 20.
Posted by mishminx over 7 years ago
"Posted by mikeblogs
Overall - Tories now proposing some public investment, which is quite a change."

There is no change, this is still a market-led approach with public investment then used for infill. As opposed to a let's just subsidise everyone approach.
Posted by mikeblogs over 7 years ago
Labour is also just infill - enough to do market 1 perhaps, and the 'do' bit could just be the cable to carry the fiber, and the metal boxes and the power.

The outcome is cheaper wholesale prices for all retailers.

If market-led approach, Tories would see spectrum as dirt and ensure we do away with this anachronism we call fixed /mobile. They are still hoping to make money from sustaining oligopolies.

Posted by mikeblogs over 7 years ago
Interesting to see if anyone would be interested in leasing BT exchanges to do the upgrades, to cut costs and boost connectivity.

I do not believe a particular dogma will solve this, but the focus on delivering quality homeworking everywhere (sufficient bandwidth - with low loss) is a good place to start as per the next Gen consultation.

Posted by toftman over 7 years ago
What a total load of clap trap. Typical politcal promise from a crowd who have no idea whatsoever of the technical problems involved. I very much doubt if any of them know ohms law, let alone anything about digital data transmission. Nothing at all will happen until BT starve their share holders a little and install fibre optic lines to replace Queen Victoria's corroded copper rubish. I, like many others in South Cambridgeshire, have broadband (in name only) which runs at around 180Kbps, it's a sick joke and a rip off.
Posted by Somerset over 7 years ago
mikeblogs - why lease an exchange - LLU companies rent their own space. What do you mean 'cut costs'?

Home working happens how, only needs a few megs for most people. What do you mean 'low loss'?
Posted by meldrew over 7 years ago
I remain unconvinced that faster access to Facebook, Spotify, YouTube and Iplayer will actually improve our balance of payments deficit. I would agree to a basic speed of 2Mbs (up and down) but if anyone wants more they should pay for it via the private sector.
Posted by cyberdoyle over 7 years ago
meldrew - you can't have a steady 2 meg symmetrical without a leased line (cost a fortune)and what passes for 2 meg 'broadband' is shared with up to 400 others once you hit the exchange bottleneck. As a comparison why wait for a dripping tap to fill a bath? Get the bathing done and then get on with living.
Posted by mr_flibbles_twin over 7 years ago
Interesting reading the townies vs rural comments. Thanks for that I needed a good laugh!

Posted by searcher100 over 7 years ago
My town is classed as rural market town nearest working fibre 16 miles. Pre virgin took fibre to outskirts of town and stopped. no one ever finished it. A massive fibre cable was laid though the centre of town I asked where is it going and what is it? to BT engineers his answer, fibre optic with 500,000 capacity but it kept going out of town to the east. To the East of us is 10 miles of marsh farm land then Mablethorpe, North Somercoates. I dont think you could find 500,000 homes even if you included every bird nest and rabbit hole. Why do they lay these cables then never connect anyone?
Posted by Somerset over 7 years ago
searcher - what's massive? It will be linking exchanges together for voice and data cicuits.

500,000 probably means simultaneous voice calls.

Fibre does not mean internet.
Posted by searcher100 over 7 years ago
Yes maybe not massive to you but we dont have 500,000 people in the whole of East Lindsey its mainly Industrial Farming with light engineering and a Gas terminal. talking about sheep or rabbits probably 500,000 and with rising sea levels even less as most is below sea level
Posted by Somerset over 7 years ago
So maybe it's specifically to link the gas terminal to somewhere else. Maybe part of the gas companies computer network.
Posted by mikeblogs over 7 years ago
low loss - .1% packet loss for key applications - compared to 1-3% packer loss we see today.

Lease Openreach facilities for upgrade.
1.) assumption - single vendor non 21C design could replace 3,700 market 1 exch with 850 MSANs - but some relief on PSTN regs is needed.
2.) Ops savings allows FTTC to remaining market 1 (18000) PCPs
Posted by mikeblogs over 7 years ago
Somerset continued
3) includes facilites for mobile using
4) last 2000 exchanges? I still thinking

These resources are wholesaled back to all operators including BT.

I was thinking Yorkshire Foreward and fiberwales community.
Posted by searcher100 over 7 years ago
possibly gas terminal but easier to route it down coastal road from grimsby shorter distance and less disruption. why take it 10 mile inland then 10 mile out again in an L shape? I just dont understand it. Maybe some BT bod reading this knows what they were up to. Or is there some Secret handover of land back to the sea on the agenda we dont know about and that route will be under the sea sooner than 2050 (There Im off on a conspiracy theory again and the reason the wind turbine blade fell off just down the road was nothing to do with the light show that night lol)
Posted by Fixer109 over 7 years ago
@osted by mishminx 4 days ago

Please remember that it's Maggie that stopped BT From laying a fibre network and therefore gaining the uperhand
Posted by Fixer109 over 7 years ago
I live in Rugby (Warwickshire) and the gas comany are riolling ourt new ducts for their gas as they deem to both eradicate the posssibly of gas leaks and future upgrades.

My question is:
Posted by BackStabber over 7 years ago
"The trick to get a real digitalbritain is to do the rurals first..."

Sorry, but this seems nonsensical to me. The closest thing to it is that the government should concentrate heavily on the backbones which with increased redundancy may cover more rural areas, and let private entities deliver to the home.

Cities are a better start, higher density, more customers for your investments, provides profits for development in rural areas. I suspect you may be rural and have some bias.

Anyway conservatives are in power now, anyone going to remind them about this?
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