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Sky sends it final submission into the Ofcom market review
Thursday 08 October 2015 15:42:52 by Andrew Ferguson

The war of words on the Ofcom Communications Market Review continues and Sky has published for all to read a summary of its final submission to Ofcom and we expect there to be a counter argument from the BT Group soon.

"We believe that for the UK to keep up with the rest of the world the focus has to be on investing to make Gigabit broadband widely available to homes and businesses. It’s what our international competitors are doing. The New Zealand government has accelerated roll-out of fibre to 80% of the population by 2022. In Japan and Korea, more than half the population already receives connection speeds above 100Mbps.

Openreach’s ownership structure means that companies that compete with BT, like Sky and TalkTalk, cannot work with Openreach on innovations like fibre to the home. And, with no prospect of BT’s retail arm using an alternative high speed fibre network to deliver services to customers, there is limited scope for new infrastructure entrants as they would only be able to compete for Sky and TalkTalk’s business.

The current market structure has enabled ambitions to remain modest, with Openreach’s total capital expenditure remaining broadly flat over the last few years. Even now, when the opportunity is so clear, the plans BT have already shared for Openreach such as ‘G.Fast’ still rely on the old copper network when we know that we can only achieve the speeds the UK needs with fibre."

Extracts from Sky summary of market review submission

The Sky statement is interesting in that there is no mention of rural issues and the 48% availability of ultrafast broadband connections from Virgin Media is neatly side stepped. Rather telling is that while Openreach FTTP availability is low at just over 1% in England both Sky and TalkTalk have to date refused to sell the Openreach service, would that change if Openreach overnight became an independent operator or would it require a revamp of the product at the direction of Sky and TalkTalk?

The massive problem facing Ofcom is that being bold can produce massive benefits but it can also fail in a really bad way, and with increasing calls for more speed now and not after a 10 to 15 year nationwide FTTP/FTTH building programme, it has to balance short term with long term.

Ofcom has a very tricky balance to strike between the urban, peri-urban and rural parts of the UK, the majority of urban areas already has a choice of local loop providers and if CityFibre, Sky and TalkTalk deliver 10 million are probably going to have a choice of the unreliable Openreach copper network (borrowing Sky phrasing), Virgin Media DOCSIS cable network and Gigabit FTTH.

Outside the various polls the issues appearing fromn the general public are usually:

  • Engineer did not arrive
  • My broadband has been broke for a day and has not been fixed yet
  • Why is it three weeks form ordering to getting fibre installed
  • When will faster broadband be available to me
  • Fibre is available, but my provider says they cannot provide it yet
  • We have even had people saying that in areas where Gigabit is available it is too expensive

A doctor being able to download a GigaByte image file in 8 seconds is better than waiting 100-200 seconds to download it over a VDSL2 connection, but is the benefit much better than say having to wait 25 to 30 seconds? Gigabit is transformative but how often does a doctor need to consult with such large data files when outside of a normal hospital environment? Coming up with uses for Gigabit is easy, with the Internet of Things being an often quoted favourite when it reality the things benefit most from wireless connectivity with a relatively low latency rather than raw speed.

Maybe the choice for Ofcom is between the devil you know and creating a new beast that may or may not deliver all that is promised.

Comments

Posted by WWWombat about 1 year ago
The Sky press release says this in consecutive paragraphs:

"In Japan and Korea, more than half the population already receives connection speeds above 100Mbps.

The reality in the UK today is very far from that goal."

It seems that Sky seems to have forgotten Virgin in their haste here. Once you bring them into the equation, you realise that half the country already has access to speeds of 100Mbps+ ... if they chose to.
...
Posted by WWWombat about 1 year ago
While I agree with some of Sky's points, the fundamental flaws make it look like political campaigning to score cheap points, rather than a serious attempt to improve UK infrastructure.

It'll be interesting to see their full submission to Ofcom, to find out whether it is worth backing, or just continues in the same vein.
Posted by Blackmamba about 1 year ago
Hi broadband Watchers.
Remember Openreach has spare fibre to the CAB nodes total ? so the 1% fibre could cascade out towards the customers very quickly so where will SKY and talktalk be.
Posted by TheEulerID about 1 year ago
@WWW

You are quite right. The OR/BT split issue is an irrelevance. It won't magically find the a couple of tens of billions to invest in a national fibre network. The line revenue part of OR is a roughly £2.5bn a year business, or about half the turnover of the BBC. GEA produces does lead to some revenue growth, but by going up the value chain (which the LLU operators hate for obvious reasons). What they want is a cheap optical fibre network at MPF prices, and it simply won't happen.
Posted by TheEulerID about 1 year ago
"GEA products", not "GEA produces". Apologies.
Posted by fastman about 1 year ago
Sky and Talk talk could have sold FTTP for the last X years in same way as others have made the commercial decision not to
Posted by gerarda about 1 year ago
"The current market structure has enabled ambitions to remain modest, with Openreach’s total capital expenditure remaining broadly flat over the last few years." - BT's lack of vision and ambition may yet prove their downfall
Posted by Blackmamba about 1 year ago
Hi Broadband Watchers.
If all the Cabs with Fibre on Demand were opened up and reversed to FTTC/P which I feel is the same product which is starting to happen in Surrey the % leval will incress very quickly to 10 %. Fibre.
Posted by andrew (Favicon staff member) about 1 year ago
You cannot simple reverse a cabinet to be a FTTC/P one, you either build out to the fibre manifolds at the DP or you don't.

Surrey is seeing limited rollout of P in C areas to meet a 15 Mbps target but that is all. Other places like Northern Ireland and Worcestershire also have limited amounts of this.
Posted by fastman about 1 year ago
Gerada !!! so circa 50,000 street boxes covering 20 odd million premises in 5 years using the Business own money is lack of Vision and ambition !!!!
Posted by fastman about 1 year ago
Blackmamba the surrey is very specific only don't expect that to be expanded in any shape or Form
Posted by Blackmamba about 1 year ago
Hi Andrew Staff and others.
Please remember you build the service from the the node to to the DP so you can switch options very quickly. When Openreach has provided the opertunity for Fibre on Demand at many Cabs and ISP,s have not taken up the service it in their court.
Posted by andrew (Favicon staff member) about 1 year ago
@Blackmamba ISPs have not taken up fibre on demand because

a) Three year contract
b) Setup fees ranging into the £1000's
c) Wholesale cost £100+VAT per month
d) NOT available to order
e) Long build times, the few that got in before closure seemed to take around a year

Theoretically you can switch switch quickly, after you've installed the fibre tubing from the ag node to the dp, then spliced and blown the fibre and then had a customer actually order it.

If it was quick easy and cheap, then Openreach would have done a higher proportion of P
Posted by gerarda about 1 year ago
@fastman Failing to roll out ADSL without publicly funded demand stimulation, failing to roll out FTTC except where Virgin were competing, failing to spend more than the their annual depreciation charge in capital. No vision No ambition. Still a public sector dinosaur at heart.
Posted by andrew (Favicon staff member) about 1 year ago
@gerarda the FTTC footprint from commercial roll-out exceeded Virgin Media foot print by around 17 percentage points.
Posted by mervl about 1 year ago
Just out of interest where does the Martlesham labs, which I thought was BT's research arm for technological innovation, fit in a split?
Posted by ribble about 1 year ago
@mervl. Adastral park (Martleham) r&d is run by TSO (Technology Services & Operations)
Posted by TheEulerID about 1 year ago
@mervl @ribble

That may be where the labs fit (and isn't it called Adastral now), but it's a shared technical resource - one of those allowed with the undertakings. Following an BT/OR split, it would also probably have to be split in some way according to the functions it performs. One of the ways that costs might rise if some functions are duplicated. There are many questions like that.
Posted by gerarda about 1 year ago
@Andrew -would BT have ever rolled out FTTC without the presence of Virgin's network and it upgrade to superfast speeds 8 or 10 years ago?
Posted by andrew (Favicon staff member) about 1 year ago
Maybe, maybe not

Vdsl and vdsl2 had been worked on by the labs people for many years so an intent to go faster than adsl2+ being the end of the world was there
Posted by fastman about 1 year ago
we have deployed FTTC in many places commercial where there a no virgin network
Posted by WWWombat about 1 year ago
@gerarda
Or should we think of it the other way around, perhaps? Did Ofcom's process to release the regulatory choke on BT kick VM into action?

The Ofcom investigation into NGA's started in 2006, before either VM or OR had any kind of superfast speed. But it was a great warning to VM that BT would eventually be allowed to do things.

In 2006, BT were busy investing in their 21CN NGN core upgrades. A total rethink of their network isn't exactly a lack of ambition.
...
Posted by WWWombat about 1 year ago
At the same time, VM was newly created from NTL and Telewest. NTL's final broadband offering in 2006 was for 1, 4 or 10Mbps.

Ofcom's final consultation on NGA was late in 2008 ... which coincidentally was when VM launched their first superfast service. The consultation finally resulted in approval in 2009.

Would VM ever have had a lead in superfast speeds if they hadn't been given a 3 year head start? Or did the head-start date back to Thatcher's days?
Posted by WWWombat about 1 year ago
BDUK reckoned the superfast coverage footprint looked like this:
http://postimg.org/image/7aaoorj4v/

That's:
9% VM without BT, commercially
36% VM and BT together, commercially
31% BT without VM, commercially
24% left for subsidy.
Posted by TheEulerID about 1 year ago
@gerarda

There is not doubt BT's FTTC rollout plans were cautious, but the rollout schedule was based on commercial grounds. Clearly competition plays its part; why would you leave a competitor to pick up the most promising areas? Do you think OR's wholesale customers would applaud leaving those areas to VM? It's simply ridiculous. Also, many areas were enabled where VM did not have a presence.

Additionally, Ofcom caused a lot of delay by prevaricating over their regulatory response to NGA networks. Investing when the regulatory rules are highly uncertain is not an easy sell to shareholders.
Posted by AndrueC about 1 year ago
Where's the evidence for the statement that we all need gigabit speeds? The UK already has some of the cheapest residential internet access in the world but high speed take-up is running at, what, 14% where available? And even then it seems most people are opting for 40Mb/s even if they could get 80Mb/s.

VM keeps have to shunt customers onto faster services because they won't move over themselves.
Posted by AndrueC about 1 year ago
A family of four can each be watching an HD TV stream and browsing/chatting/tweeting on a 60Mb/s connection with plenty of bandwidth to spare. Upgrading to UHD (assuming there's any point) would be too much for a family of four but not by a huge amount. G.FAST or VM cable would ample even for that.
Posted by AndrueC about 1 year ago
"FTTC footprint from commercial roll-out exceeded Virgin Media foot print by around 17 percentage points."

Is that all? That doesn't sound right. I thought FTTC was at 95%+ availability. VM hasn't even reached 60% yet has it? Even in towns where VM has a presence it's not available to all (eg; Bicester).
Posted by themanstan about 1 year ago
I think that soon enough headline speed will become irrelevant. As sustained backhaul and core network capability will show that burst speeds are less important for day to day residential than adequate sustained bandwidth per customer.
Posted by andrew (Favicon staff member) about 1 year ago
@AndrueC given overall fibre (with no speed qualifier) coverage is at 90.9% of UK, then no way is it 95% for FTTC. Who is saying that officially?

https://labs.thinkbroadband.com/local may be worth a look.

Posted by WWWombat about 1 year ago
@AndrueC, @andrew
Building on the graphic I showed earlier, and with a current superfast (24mbps+) coverage of 87%, and fibre coverage of 91%, I reckon the breakdown is:

9% VM without BT, commercially
36% VM and BT together, commercially
31% BT without VM, commercially
11% BT without VM, subsidised by BDUK
4% BT without VM, fibre below superfast threshold
9% untouched by fibre.

That means the Openreach fibre network probably covers 82%, with 78% above the superfast threshold.
Posted by andrew (Favicon staff member) about 1 year ago
My figures give 83.6% Openreach FTTC/P coverage (0.881% is GEA-FTTP).
Posted by RichBeardman about 1 year ago
As a Sky customer, I am waiting till they upgrade their pathetic router before even taking their "slow" fttc service so them talking about gigabit fibre when they don't even have gigabit ethernet on their router is a joke. If BT had a phone package to rival Sky Talk International I'd change to them but BT's phone packages are pathetic.
Posted by csimon about 1 year ago
"Where's the evidence...that we all need gigabit speeds?". This sort of question was directed at me here about 8yrs ago when I suggested 2Mbps should be minimum at that time. I got comments that there is no demand for it, I should provide proof of the demand otherwise provide the infrastructure myself, or that I should move closer to the exchange if I want better BB is it's my choice where I live...

FTTP is the way ahead & it's really irrelevant then what speed as people can choose what they want. Bandwidth probably the major consideration. Speed has only ever been an issue because of DSL.
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