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TalkTalk CEO does not know if Openreach fibre a good price?
Wednesday 31 October 2012 10:21:41 by Andrew Ferguson

The Register has covered a session of a meeting at Westminster which saw discussion of the UK present and future position with regards to broadband. The meeting even included a ministerial statement from Ed Vaizey declaring the UK was ahead of France and Germany.

Of particular interest are comments by Dido Harding the TalkTalk CEO, when discussing Openreach and their wholesale fibre products, there was a call to ensure that the regulatory framework was such that firms buying the fibre service from Openreach were paying a fair price. In a surprise statement, she announced that she had no idea whether TalkTalk was paying a fair price, which given that the UK is so far behind (or so we are often told) on its roll-out and thus there should be many other EU countries with VDSL and FTTP roll-outs to around 40% of households and growing. Comparisons with countries like France and Germany should help to judge whether Openreach is overcharging, but even in terms of the UK it is surprising that the CEO of one of the massive telco's has not been briefed in this area.

While Openreach is open to criticism, it is the one that the major broadband providers appear keen to do business with, and this is a big difference to parts of Europe, where regulatory holiday were given to the incumbent. These holidays give the incumbent 3 to 5 years usually when they can build their new fibre based network, and run it as a vertically integrated affair, which reduces the payback period on the capital investment. The certainty can also mean that competitors actually invest and thus we are seeing some cities in Europe have competing fibre infrastructure. Though it could be said in the UK that Openreach is catching up to Virgin Media, the advantage Openreach has is that while its often criticised FTTC deployment seems backward, it can form the basis for a full fibre deployment in time.

Squaring the circle that is the need to encourage fibre investment in the UK, while meeting requirements to ensure a vibrant (read cheap) broadband service to the public is firmly in the hands of Ofcom. The bulk of telecom regulation carried out by Ofcom is to price regulator the prices of products from the BT Group, often to service the needs of Sky and TalkTalk, this worked with great success in the LLU area. The question really is how far does the religion of competition need to go in the broadband arena? If nothing changes drastically we can see a UK where around 60% have the choice of two or more from Openreach, Virgin Media or altnet infrastructure, and 40% where the Openreach wholesale products are still the single choice.

Comments

Posted by Spectre_01 over 4 years ago
Guess the fibre prices can't be that bad if TalkTalk's CEO hasn't had cause to give it any thought. I'm sure in time TT will put together some sort of complaint over the matter since they've now been asked it should get those little cogs turning in the CEO's head at night.
Posted by FlappySocks over 4 years ago
How much reliance on Openreach do TalkTalk have these days? Last mile obviously. What about FTTC/P? If they have a presence in the exchange, are they using it to maximum advantage?
Posted by tommy45 over 4 years ago
As i understand it BT only offer other isp's their wholesale products, and the isp has no or little control of it, apart from using their own network for data flow, instead of buying capacity from bt , Maybe if openreach allowed a similar setup like LLU where the isp concerned has full control would be a step in the right direction
Posted by themanstan over 4 years ago
Sub Loop Unbundling SLU is an option for FTTC, but it relies on the provider building their own FTTC/H cab next to the BT cab.
Posted by tommy45 over 4 years ago
@themanstan I don't see any isp's doing that somehow,But i don't see why a virtual sub loop service couldn't be offered which should give full control to the isp buying it ?
Posted by andrew (Favicon staff member) over 4 years ago
VULA - which is what the GEA service offers visibility to some data, but NOT port control at the VDSL DSLAM.

GEA is designed to offer FTTP to ISP too, so by not exposing a lot of VDSL control makes adoption of full fibre easier.

Multiple VDSL DSLAM in same cable bundle can also stop any future vectoring deployment.
Posted by eviemai2011 over 4 years ago
@tommy45 DRL did this with the help of euro funding then signed up ISP's. the project was a bit of a disaster for them and there are also quite a few things to consider as its not that straight forward. Even timescales for connecting customers over has to go through BT so it's not really economincal if there's a big demand/take up. A lessons learnt project tbh.
Posted by Dixinormous over 4 years ago
Quite an interesting viewpoint compared with those taken by The Register and ISPReview.

Pretty selective too:

'Harding added that she had no idea whether TalkTalk was paying a good price for superfast broadband from BT.

"I simply don't know, but there's also no alternative," she said. "Over time, as we consume more of it, I should know and so should Ofcom."'
Posted by GMAN99 over 4 years ago
There is an alternative, they can run fibre from the exchange to properties themselves but that I'm sure would be even more expensive for them
Posted by themanstan over 4 years ago
The standard model for commerce is that it should be more expensive if you "rent" something off someone than if you build your own.
Fine capital outlay if higher at the beginning, but the long term is more profitable.
Are all BB companies so short term in their outlook...
Posted by GMAN99 over 4 years ago
Its true themanstan, I'm actually wondering, with PIA could another ISP even build their on PON network or does it only cater for point to point fibre
Posted by Ascottgent over 4 years ago
I have just been talking to TalkTalk about changing to fibre via Cotswold Broadband who intend to FTTP in much of OX7 in March/April 2013 but was told by TalkTalk that they were putting their own fibre network into this area - to be annouced shortly.
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