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Poll Results: Should Openreach be nationalised?
Thursday 24 September 2015 12:09:53 by Andrew Ferguson

Lots of our visitors will be old enough to remember when the BT Group was the GPO and one of a number of Government owned industries that in the last three decades have been sold off into private hands, so with the current cries from campaigners and chunks of the broadband industry for Openreach to be split away from the BT Group completely and with nationalisation of utilities back on the Labour Party agenda we thought we would ask our visitors their opinion and the answer is:

Should Openreach be nationalised

Nationalisation is a very different proposition to the hiving off of Openreach which is something we asked back in July 2015. Nationalisation is something that none of the major operators have called for and there is no evidence Ofcom is considering it and with a Conservative Government it is never likely to happen, unless Openreach became such a disaster that it delivered nothing from the BDUK process. The new Labour leadership and a 2020 General Election does raise the possibility though.

The voting was pretty consistent over the 7 days that the poll ran and had over 1,400 people vote, the fact that even after the first few hours the almost even split in the results in support of nationalisation suggests that this was real people voting as opposed to one political campaigner trying to make a point.

Of course nationalisation while an interesting avenue does not come with automatic guarantees on things improving and the same applies to creating Openreach as its own FTSE 100 company which is why we asked the second question.

Should Openreach be nationalised

This question on whether nationalisation would create more FTTP coverage was asked because if going to the effort of nationalising the local loop once more it makes no sense to continue with the incremental improvements unless the deadline for improved coverage/speed is pretty so tight that this is all that is possible. The fact that only 28% believe a Government owned Openreach would deliver more FTTP suggests maybe some votes from the first question may not just be linked to giving the UK faster and faster broadband.

Should Openreach be nationalised

Gazing into the broadband crystal ball is always dangerous and the final question did precisely that. The UK currently has native FTTP from Openreach available to 0.82% of the nation, with the contribution from Hyperoptic, KC, Gigaclear, IFNL, B4RN and others we are at over 1% availability so the pessimists voted for less than 2% in five years time. In theory if the Sky/TalkTalk/CityFibre venture delivers then we should be in the 25% to 50% range. Our expectation at this time is that we will actually be in the 10 to 25% range, an often missed contribution to this total is that while the majority of the Virgin Media Project Lightning expansion will be DOCSIS cable based, they are using some FTTP.

Comments

Posted by TheEulerID about 1 year ago
All that goes to prove is that many people are clueless about the implications (and they don't remember the pre-privatisation phone system).

Just look at network rail. Hugely expensive and with £38bn of debt in public debt and investment plans in chaos.

Posted by mollcons about 1 year ago
My guess is that a large percentage of the respondents will not be old enough to remember Post Office Telecommunications.

One of the principal reasons why Margaret Thatcher's government privatised BT as we know it, was precisely because it required vast amounts of capital investment which the taxpayers would have complained about, especially when it would have been botched anyway.
Posted by csimon about 1 year ago
I remember pre-privatisation, what I don't remember is the phone line being dead for 1-2 months every year, waits of up to 5 weeks for a fix, multiple engineers being sent out ebcuase the first only has a limited amount of skill/ability to diagnose and fix, and now a wait of 2 months and counting for an installation order.
Posted by csimon about 1 year ago
^^ which, incidentally, if it's not obvious, is what I get now.
Posted by csimon about 1 year ago
@mollcons: Yes, the electorate are rather fickle aren't they? They expect the country to be run by not contributing any money to it. I think it's time people started waking up to the fact that taxes are actually necessary so that public services are there when we need them, not there for only the people that private companies can make a profit from.
Posted by TheEulerID about 1 year ago
@csimon

It happened, it happened. As did waiting several months to get a phone line, wrong numbers, noisy lines, locks on phone dials as they were so expensive. No itemised bills and no way to realistically contest them.

nb. far from PO telecoms getting vast investment, it was actually starved of it. The vast majority of local exchanges were Strowger in 1984.
Posted by Somerset about 1 year ago
A nationalised Openreach would outsource all the different functions to various companies.

FTTP in VM etc. areas? Unlikely.

Why not nationalise the network elements of all telcos.
Posted by TheEulerID about 1 year ago
Oh, and lead times of 6 months and more were pretty common too - at least in the 1970s.
Posted by phil_cooke about 1 year ago
'lead times of 6 months and more were pretty common too' sounds the same as any attempt to get FTTPoD then!
Posted by RuralDavid about 1 year ago
Another regular feature of the nationalised phone system I can remember cursing in the 1970s was the oft-repeated message "all lines to London are engaged. Please try later".
Posted by TheEulerID about 1 year ago
@phil_cooke

No doubt, but in the 1970s they really didn't have much more than phone lines and exchanges to look after. PO telecoms had a workfore of over a quarter of a million.

To be fair, there was an enormous growth in the number of phone lines from the 1960s onwards. This was the era of party lines and there must have been a huge number of copper pairs being installed.
Posted by AndrueC about 1 year ago
I always think it's sad that people can think that the answer to any problem is to give control to the government. They must be living with their heads in the sand. I bet if you asked those same people if they trusted politicians you wouldn't get 52% of them saying 'yes'.
Posted by Llety about 1 year ago
The result does not suprise me. Those who read this site are either looking for some hope of an improvement to their situation or work in the area. For the former they feel the have been very let down by BT and various levels of government, have little/no forward visability or confidence they will see an improvement. So any chance that might improve their situation is worth a try. Openreach being nationalized would also be seen an a punishment for BT for failing to deliver and thats fair game.
Posted by AndrueC about 1 year ago
Yeah we had a party line in the 70s. And struggled on occasion to make a call from Exeter to Plymouth because the trunk line was busy. And when I did get though to my girlfriend my parents would be breathing down my neck to make it a short call to keep the cost down.
Posted by AndrueC about 1 year ago
I think my views can be summed up by this image - we have the picture framed on one of our office walls:

https://humoresyamores.files.wordpress.com/2011/07/government-problems-solutions1.jpg
Posted by TheEulerID about 1 year ago
@Llety

You do realise that nationalising Openreach would cost the thick end of £25bn, even before any money for investment was found. They'd also be taking over most of the pension fund debt.

For those who think there won't be any shareholders to pay, think again. PO Telecoms were required to give money to the Treasury every year in lieu of dividends. The same is happening in Jersey just now.

http://www.ispreview.co.uk/index.php/2015/01/jt-warns-fibre-optic-broadband-rollout-delay-island-jersey.html

(£6m in Jersey, scaled by population is £3.6bn in the UK).
Posted by TheEulerID about 1 year ago
@Llety

On the other point (and something that needs to be emphasised in large letters) is that those voting in a TBB poll are self selecting. That sort of poll is absolutely the worst way of garnering an accurate view of public opinion, or even the opinion in this site. There will be a strong selection bias to those who feel strongly, and quite possibly from those not well served.
Posted by Llety about 1 year ago
@TheEulerID

You miss my point by some distance. The members of the 10% don't care how much it would cost and want something better than we have now (which is marginally worse than ****). If BT want to avoid call for OR being split off at one end of the spectrum and nationalization at they other, they need up their game and be less opaque and be straight as to when a service will be delivered. It's BT's own fault.

The cost to UK plc of having a 3rd world telco infrastructure is > 25 billion.
Posted by TheEulerID about 1 year ago
@Llety

You called it "punishment". It's hardly that if a market price has to be paid for the company.

Also, there's this sense of entitlement. Something paid for by others. If we had a market that was allowed to reflect different costs in different prices then there could be a resolution.
Posted by Llety about 1 year ago
@TheEulerID

What are you talking about? "Something paid for by others"? You know nothing of my situation to make such a claim. You know nothing of my tax contribution or my willingness and ability to lay duct and pay the actual cost of an installation. I have no sense of entitlement, reliable 2 MB would be enough.

Are you in favour of large scale rural depopulation so enable BT have pay a higher dividend? Expect not, so don't make similar claims about a sense of entitlement when we only want an working 2MB
Posted by TheEulerID about 1 year ago
But it's true though. As for taxes, we all pay them and there is no subsidy in my area.

In addition, rural lines are already cross-subsidised from more profitable areas. If we had a system where costs were more accurately reflected, then lines in urban areas would be considerably cheaper and those in rural areas more expensive. It's just the fundamental economics.
Posted by Llety about 1 year ago
You get street lights, bins collected, roads gritted, local doctors, local hospitials, public transport, police, job opportunities, etc, etc so you get lots of subsidy rural areas don't get (lets not bring the specific case of farmers into this, different web site).

The lack of usable internet increase the cost of providing many of the above to rural areas, its just fundamental economics.
Posted by TheEulerID about 1 year ago
Those are local services, and on a per-property basis emptying bins etc. cost more in less densely populated areas.

To be clear I'm in favour of subsidy to rural areas (maybe by a levy on BB users) to bring services to a usable level for "essential" services including video streaming, video conferencing etc. But I'm not wild about complaining commercial companies are working on a rational basis, especially given the way the market is regulated, which gives no benefit to servicing uneconomic areas.
Posted by AndrueC about 1 year ago
@Llety: You need to think a bit more carefully. One dustbin lorry can probably service several hundred houses in an urban environment in one morning and only burn enough fuel to travel 5 miles.

In a rural environment in one morning that same lorry might serve less than one hundred properties and burn 20 miles worth of fuel.

Yet the two areas may well pay the same council tax. Who's getting the subsidy now?
Posted by AndrueC about 1 year ago
(cont'd) that's the same council tax per property I should say. There's a reason why human beings invented urbanisation and it's because providing services is easier and cheaper. Pretty much any time a rural dweller is paying the same price for something as an urban dweller either the urban is getting overcharged or the rural is getting undercharged.
Posted by fastman about 1 year ago
so liety re you or my willingness and ability to lay duct and pay the actual cost of an installation. I have no sense of entitlement, reliable 2 MB would be enough. -- have you contacted openreach see FAQ. Rural broadband not on a plan then ?
Posted by Llety about 1 year ago
@fastman. Yes, many times. As a member of the welsh public I can't contact OpenReach, there is no path.

@AndrueC. We don't get bin lorries, we have to take our refuse to a central point. I think very carefully, particulary about the damge to communities that poor broadband is causing. If you are in favour of rural depopulation, you are welcome to keep that view. I guess you live in a town?
Posted by lelboy about 1 year ago
Oh we do,The EulerID!I well remember how British Railways were starved of investment along with the GPO, so that they were both set up to be hived off to the highest bidder. You say nowt about the advances that likely would have improved those that I have mentioned.The BBC is at the forefront of all things digital, and still developing media structure - all without "private" ownership!
Posted by TheEulerID about 1 year ago
@lelboy

The BBC is financed by a hypothecated tax. It's rather easier to run a business if you have a guaranteed income and have what is a huge budget to Internet presence (way, way higher that any of the commercial operators who have to cover their own costs).
The problem with the GPO (which ceased to exist in 1969) and the PO was that it was astonishingly inefficient and expensive to customers. It has 260,000 employees, very resistant to change.
Posted by TheEulerID about 1 year ago
Bear in mind that PO telecommunications had little more than the phone system to run.

Before privatisation PO telecoms was by far most overmanned state telephone operator in the major European countries with about twice the number of employees per line.

In addition, the whole supply chain was dreadfully expensive and the appallingly wasteful System X exchange was a financial disaster. Very late, very expensive and a complete export failure.
Posted by TheEulerID about 1 year ago
Finally, as you are such a fan of the BBC's digital prowess, there was this little waste of £100m on a scrapped IT project.

http://www.alphr.com/news/enterprise/382057/bbc-admits-100-million-it-project-was-a-waste
Posted by fastman about 1 year ago
leiby then obviously not the right place

http://www.superfast-openreach.co.uk/rural-broadband/Fibre-roll-out.aspx
Posted by Llety about 1 year ago
@fastman if thats the right place, then we are stuffed. They are not interested since it is Wales and said I needed to go to the Welsh Government who in turn said "wait and see", we can't get involved.

Despite having a 12 ton track machine and being able to use it, unless you are part of a far sighted community, the odds are stacked against a partnership with Openreach.

Posted by fastman about 1 year ago
interesting -- suggest you try again !!!!!
FYI most of those one have been far sighted
Posted by jabuzzard about 1 year ago
What most people who complain about pre-privatization BT don't understand is that it all got better afterwards not because it was privatized but because all the Stroweger exchanges where replaced with SystemX, and fibre optics came along to vastly increase the number of lines. They had lots of engineers because the electromechanical exchanges required lots of maintenance.

One should note that the UK was the first country in the world to have an all digital trunk telephone network.
Posted by TheEulerID about 1 year ago
Of course all the strowgers were exchanged, but investment was vastly increased after privatisation to allow it. In those days, BT were able to invest over £3bn a year (which, adjusted for inflation is over double that in today's money).
The reason they could do that of course was the incredibly high cashflow from what very high priced phone calls, such was the legacy of a state monopoly despite the huge inefficiency involved.
Posted by TheEulerID about 1 year ago
In real terms the revenue from both voice services is a tiny fraction of what it was in those days.

Also, PO telecoms was effectively used to prop up a horrendously inefficient telecom equipment industry with companies like Plessey. Consequently telco equipment was vastly inflated in price as there was a captive customer.
Posted by csimon about 1 year ago
LOL, 1970s telecomms, getting all lines engaged! That was 45 years ago, if you do the math. Things do move on, whether it's privatised or nationalised. The equivalent today is ADSL slowing down when more people use it or, in my case, unable to use internet and getting timout errors on one device when another is downloading because the bandwidth is all used up. So it still happens, so do lengthy delays in installation, fault fixing etc.
Posted by Blackmamba about 1 year ago
Hi Csimon.
On all my three Exchanges 1970 1980 there was no congestion in or out of the exchange all E Faults were cleared in the window of 1-2 hours 24 hour service A fault (no service) were cleared in the 24 hour slot Monday to Friday. Remember today it is the responceibility of the ISP some good/bad should clear the problem on a Referance Number and inform the customer.
Posted by RuralDavid about 1 year ago
@csimon It was a while ago, yes: the point is there was underinvestment then as there is now. Renationalising the network won't solve its problems.
Posted by johnhodge about 1 year ago
In the early '70's I started working for the Post Office (GPO) then it was separated off as PO Telephones.as a separate company we made a lot of profit which was ploughed back in NOT to us but other Goverment purses ie roads etc . Very limited investment was spent, BT was sold off as the goverment could see shareholders being happy .High speed data transfer developement was stopped by the announcement of the sell off .
Posted by JacktheMac about 1 year ago
Nationalise Openreach, penalise BT for lack of transparency and failure to connect rural communities. Handicap BT until they have accounted for every penny spent (like the mythical "£100,000 cabinets”). Encourage/subsidise all new installations to be future-proof FTTP.

Most important: introduce a law that prevents BT coming back for a second tranche of public subsidies in 5-7 years when everyone releases FTTC is not fit for service.

It Thatcher hadn’t sold our telecoms off for a pittance, we could have had universal FTTP for a fraction of the cost of the half-baked BT/OR rollout.
Posted by csimon about 1 year ago
Latest update (from my ISP) is that my order is still with the survey dept of BTW who promised it 3 weeks ago. Apparently the survey dept is small, backlogged and inexperienced with FTTP. So much for being so much improved since the 70s.
Posted by csimon about 1 year ago
I'd like someone to recommend an ISP who could get my FTTP installation done in less than 3 months and fix times down from 5 weeks to 24 hours. As it's not the ISP that at fault, it's Openreach. Openreach just can't do it, full stop, no matter how many times we are advised to contact our provider or switch providers.
Posted by rickw about 1 year ago
BT/Openreach behave just like a publically owned business. The ethos of service is perhaps better that the old pre-privatisation era but not that much better.
A friend worked for the GPO. He started 8 ish and was finished by 1pm to make sure he had the afternoon off.
Truly a shocking experience getting anything done from the GPO.
Posted by JacktheMac about 1 year ago
Posters are equating 1960-70s levels of customer service with Nationalisation. Had the GPO been privatised in 1950 it would have even been worse in the 70s. Nationalisation now would bring benefits to all instead of wealth to a few.
Posted by roughbeast about 1 year ago
To me the whole point of having a nationalised network would be to make FTTP a universal provision.
Posted by DrMikeHuntHurtz about 1 year ago
Socialism is always a failure.
Posted by GMAN99 about 1 year ago
@jackthemac doubtful indeed it was actually thatcher that stopped the rollout of fibre in the UK by BT so I think you are off the mark a bit there. The government is broke they won't buy openreach back
Posted by JacktheMac about 1 year ago
GMAN99 I didn’t claim that Thatscher stooped fibre rollout. I said that had BT not been privatised, universal FTTP provision would have been achieved for less than BT are ripping off the country for FTTC.

DrMike - I take it your Phd is not in history, politics or economics. Or indeed linguistics: Socialism is no more a ‘failure' than Capitalism is a success. These are approaches, not absolutes.
Posted by JacktheMac about 1 year ago
Apologies: ‘Thatcher stopped'
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