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Will Germany have the last laugh on broadband availability?
Tuesday 11 March 2014 09:35:03 by Andrew Ferguson

The UK leads Germany in a number of broadband metrics and it shares a common pattern that VDSL and vectoring have been backed by the commercial operators so it is something of a surprise to see the German chancellor make a joke of their nationwide broadband plan for 2018 being vastly superior to the UK plans that are actively being built.

The joke may actually have been less about the coverage targets, as finding a definitive percentage target for the German 2018 project is difficult as nationwide keeps being mentioned, and anyone following UK broadband knows that nationwide can mean anything from 48% to 100%. What is new in the last week or two is announcements about the amount of money available for the German 2018 broadband plans, which will be all the money raised by the sales of radio spectrum to mobile phone companies. The current estimate to hit the 50 Mbps speed across the country is €20billion to €34 billion.

The size of the spend suggests that a full FTTH roll-out might be in order, but given that the 60% of high speed broadband coverage includes VDSL already, it is not a total certainty, as rolling out FTTH in areas with privately funded VDSL would break numerous EU State Aid rules.

If the UK Prime Minister had been quick on his feet he should have asked the German chancellor how they intended to overcome the physics of signal attenuation in copper with VDSL to guarantee everyone 50 Mbps. In theory with enough cabinets you can do a FTTC roll-out with a minimum speed guarantee, but this is edging more towards fibre to the drop point (FttDP) in terms of the number of nodes required.

If Germany is to use the billions to fund a nationwide FTTH network, then it will be with great interest to see how EU State Aid rules are met in the areas that already have VDSL deployed.

What we do know is that if the German project is going to rely on sales from planned spectrum sales, they had better hurry up, or perhaps the reason the roll-out is costing more than in the UK is that it will be done on a shorter time scale and with a greater level of subsidy to make planning decisions less of an issue.

Comments

Posted by jabuzzard over 3 years ago
They could of course just be planning to "ignore" the state aid rules and pay the fine levied by the E.U. I am really pro Europe, but any forward thinking nation needs universal FTTP and that will require extensive state aid. If EU rules prevent that then they need changing.
Posted by andrew (Favicon staff member) over 3 years ago
The rules do not preclude FTTH per-se, but in areas with cable or VDSL2 already getting approval would prove very difficult to impossible.

In short is the 50 Mbps really 'up to 50 Mbps' in the same way as up to 80 Mbps in the UK.
Posted by TheEulerID over 3 years ago
@jabuzzard

The idea of changing EU state aid rules is surely a non-starter. Among other things, it would act as a huge brake on private investment if companies believed their investments might be undermined at any time by state intervention like this. There's nothing like uncertainty of this sort to deter capital investment - witness what's happening in electricity generation capacity for one.
Posted by cyberdoyle over 3 years ago
Pot meet Kettle.
Germany will have the same problem as the uk. It isn't really about the cost of fibre deployment, its a case of the incumbents wanting to sweat the copper assets a while longer. It all depends now on how soon the politicians get some physics lessons and are brave enough to declare that the emperor is naked.
Posted by TheEulerID over 3 years ago
@cyberdoyle

Many are in denial over the problems of getting a return on a full FTTP rollout. The way the industry is structured and regulated, it's impossible. That's especially when competition from copper loop pricing is regulated to low level as the majority market goes for lower pricing acceptable rather than premium services.

The US promotes fibre investment by allowing telecos effective monopolies, but that is not going to happen here.

Investors won't finance investments in such circumstances. Where there is, like mobile, they will.
Posted by Plankton1066 over 3 years ago
@Cyberdoyle if this new fibre stuff is so good why has BT on a new housing estate of 70 homes near me just provisioned copper,with no ducting pipe for fibre in the future and then hooked it back to a cab 1.5 km away?
Posted by ukwiz over 3 years ago
@Plankton Because it is currently the cheapest option? And also further down the line they will hope for more money to put in the fibre that should have been there in the first place.

But of course Ofcom will make sure something like that wouldn't happen
Posted by Gadget over 3 years ago
@Jabuzzard - if the aid is declared illegal by the EU it is the recipient who has to repay the amount, of course if the recipient is a government department then there is no issue of state aid in the first place.
Posted by Plankton1066 over 3 years ago
@ukwiz And this is the problem Ofcom/UK GOV are not regulating with any future vision in mind. So where there is no competition=no market forces, so profit maximisation kicks in. Vague notions of NGA for yy% by 20xx is just daft rhetoric. A frame work of subsidy, penalties, bonuses, network access and statutory duty where monopoly exists is required to deliver on a thought out vision.
Posted by GMAN99 over 3 years ago
@Plankton1066

That is a developer decision, the developer decides what access they want to make available to the new site

copper, fibre or both

https://www.openreach.co.uk/orpg/home/contactus/connectingyourdevelopment/documentationandinformation/buildersguide/buildersguide.do
Posted by Plankton1066 over 3 years ago
@GMAN99 Thanks for the correction. I guess this demonstrates the point, it absolutely shouldn't be the developers choice. FTTH or at least pipe runs to blow it should have been provided. How can we ever hope to compete in the UK if we let shonky developers, monopolies and sound bites decided our national infrastructure plan?
Posted by WWWombat over 3 years ago
@GMAN99 Plankton1066
It isn't as clear cut as that...

The Openreach Builder's guide does mandate fibre ducting nowadays, but it is only fairly recently that it does indeed mandate it - so older developments (including most housing that has reached the point of sale right now)

However, there is no mandate that Openreach actually puts any fibre in the ducting to connect anyone up. The choice is Openreach's, although larger developers and larger developers probably have the negotiating clout to get fibre installed - Openreach point to a case in Greenwich IIRC.
...
Posted by WWWombat over 3 years ago
BUT

There is no mandate on the developer to actually install anything at all. They aren't required to connect you up to Openreach at all. They can choose anyone they wish to, so there is no monopoly there.

The real clout comes from the people buying the properties. If they ask the questions about fibre provision, and walk away when the answer isn't what they want to hear, developers will start requiring it... which will put commercial onus on Openreach.

It all starts with the public being informed, and creating the demand.
Posted by Mosler over 3 years ago
'DP' stand for Distribution Point not Drop Point.
Posted by WWWombat over 3 years ago
Err...

Did anyone count the money before it hatched?

In our auction for 4G spectrum, we raised £2.5bn, less than the £3.5bn predicted and only one tenth of the amount raised for 3G spectrum.

Germany ran a major auction in 2010, raised 4bn euros, and it looks like the operators (and their investors) aren't too impressed at their being more spectrum up for sale in 2014.

I'm not so sure it is going to generate 20-30bn euro's for them...
Posted by PhilipVirgo over 3 years ago
Germany does not need "state aid" to upgrade its broadband. Unlike the UK it has a genuinely competitive market (i.e. not just local loop unbundling) with DT forced to respond to competition from competitively priced municipal enterprise (found not to be state aid because not subsidised) as well as Cable and 4G operators. By comparison the UK services to business users are indeed a joke.
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