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Sky uses USO speech to re-iterate calls for Openreach break-up
Monday 09 November 2015 12:40:04 by Andrew Ferguson

While many are working to the presumption that the 10 Mbps USO will fall onto the BT Group and mainly Openreach, until the obligation is enshrined in law it is just a talking point and a political football. The Prime Minister gave a speech as the CBI this morning that covered many topics but did cover the broadband USO and thus Sky has issued a statement in response.

"This is a welcome initiative and fits with Sky's belief that the UK needs to be more ambitious in its digital infrastructure. However, it is unthinkable that Government would hand an even bigger role to BT given problems with the current roll out, its history of poor service and the risk of declining competition. An independent Openreach, freed from the control of BT, would be able to work with the whole industry to deliver the investment and innovation that the UK needs."

Mai Fyfield, Chief Strategy Officer, Sky

At this time we do not know how the USO will operate or be funded, there is potential for it to be a tool to perpetuate a local loop monopoly in perhaps one third of the UK, and that applies even if Openreach was an independent FTSE 100 company. If the USO is to be used to create more competition then a legal way to create another local loop operator or assist existing alternate options needs to arise. Our money is on the USO operating via a clearing house type system, since some areas will have clusters of under 10 Mbps premises which are best dealt with en-masse but in urban and peri-urban areas we may be talking about one property.

Perhaps the question is what does the public want and not what we and other die-hard broadband campaigners say they need, because it is all too easy to say everyone should have a symmetric Gigabit point to point FTTH solution available but a very different matter to fund the massive labour effort needed to construct it and over what time frame you want to reach the 100% coverage goal.

Comments

Posted by ValueforMoney about 1 year ago
10 Mbps or 2MBps the answer is the same. Not withstanding Satellite, Fixed Wireless and 4G, it still requires fibre bundles to be taken deeper in to rural areas using Openreach for the most part and a little Gigaclear.
The interesting question is how far the existing funds (£1.7bn punlic + £356m BT) can go, underspends, BT capital and clawback suggests the last three years efforts in terms of work conducted can be repeated if resource can be kept in place.
Posted by davidinnotts about 1 year ago
Good final paragraph, Andrew. What does the public want?

All the surveys and the take-up figures when faster broadband becomes available show one thing: most consumers simply want a service that is invisible, at the lowest price possible. In other words, they'll buy the least of a Gigabit connection that will give them a smooth service.

So we can be pretty sure that few will want the maximum speed!
Posted by ValueforMoney about 1 year ago
Accumulated reported state aid receipts in BT accounts hit £685m to sept 2015, against some 17,500 cabinets or 3.5m premises passed.
There is now an accrual for BDUK in BT's accounts for £157m and still no sight of BT's capital contribution.
Your analysis by constituency presents interesting challenge given the money available.
Posted by ValueforMoney about 1 year ago
@Davidinnotts - I may not need or want a Gbps today, but what a geat thing that given the comparative cheapness of the upgrades, the potential exists for homes or buisnesses to access what they need in some very remote areas. It is recognition that this is achievable and do-able and should not be denied areas where the money was set aside to do what is once in a generation upgrade.
Posted by Somerset about 1 year ago
@VFM - how much FTTP in remote areas would the spare cash provide?
Posted by PhilCoates about 1 year ago
@Davidinnotts

Do the 'surveys' say the same in areas where there is little or no provision?
Posted by ValueforMoney about 1 year ago
I am guestimating some 200,000 fibre to the manifold type installs, but it would require the end user to pay final drop connection charge. Some self dig by landowners also needs orchestrating.
I assuming the power challengues (rn and reverse power mode) and low pop. densities make G.Fast/16port DSLAM impractical in rural, so demand aggregation will be needed to trigger a FTT dp(manifold).
Posted by ValueforMoney about 1 year ago
@Somerset - last comment for you, sorry.
Posted by ValueforMoney about 1 year ago
@Somerset this next bit is interesting as it will be tempting to say 'mission accomplished' based on largely cabinet solution. The in-fill demands a customer 'demand aggregation exercise' at a very local level. LA's could easily abort and take money back, which includes about £400m of underspend on phase 1 before BT's capital contribution.
Posted by andrew (Favicon staff member) about 1 year ago
On the money available, what sum of money available? Has the PM announced a figure that I don't know or are people making assumptions that the existing BDUK monies will just carry on being recycled to deliver USO?
Posted by Blackmamba about 1 year ago
Hi Broadband Watchers.
From Andrews Results in Surrey i am sure that the EU 30 meg will be over the 95% target by the end of this year 2015 even with out the OMR procurement money kicking in. The 24 meg target has just passed it even after the BDUK contract finished 6 months ago so there must have been a lot off filling in been completed (commercial section)
Posted by andrew (Favicon staff member) about 1 year ago
That may be the case from Surrey, but avoid projecting that picture to the rest of the UK.
Posted by leexgx about 1 year ago
still again as sky wants Openreach to be independent company how would that help Sky, are they going to pay for 1 billion pounds worth of (real) fiber installs ?

BT might be a bit late on the FTTC roll out by a year, but if they hired any more people they have to Fire them at after 2 years any way (ok End there contract..) i was surprised myself that warrington was at the end of the list of installs to FTTC (as we had a lot of 3 mile long lines and still do on some stupid new estates)
Posted by leexgx about 1 year ago
BT/Openreach approach of doing FTTC first , then planned G.Fast on the pole (or street level manhole) and then some FTTP where needed (and option for people who pay £500 for FTTP where FTTC is above 25mb/s) seem the best financial option as they are currantly doing it

doing straight FTTP would take a long time to do and would not meet the deadlines and cost a lot of money (would of taken 2-4 times longer to install due to ducts need fixing and access to houses)
Posted by TheEulerID about 1 year ago
I've no idea what VFM is talking about when he says there's no sign of BT capital on BDUK. The latest quarter's results show OR capex of £348m (net of any grant), £100m up from last year and, at a time when the commercial roll-out is largely complete. Of course there will be some of that which is not broadband, but surely most of it is given the increase.
Posted by Blackmamba about 1 year ago
Hi Andrews staff
I would think that the South East will hit the 30 Meg EU target at 95% by Q1 year 2016 end of June with the help of Surrey.
Posted by Bob_s2 about 1 year ago
There is Rural and Rural. Rural does not automatically mean a few scattered houses lots of large villages and sizable towns will be classed as rural.

The current vertical integration means outside of the cabled area there is no real completion so BT can drag its heels. ITs customers have no where else to go. There is also the issue of costs. Costs are likely to fall with completion
Posted by andrew (Favicon staff member) about 1 year ago
http://www.digitaltveurope.net/390352/sky-calls-for-probe-into-bts-hold-on-openreach/

Has Sky analysis of the cap-ex situation for Openreach.

To add with the current 5m FTTC/P customers they have around £444m annual revenue from them, but clearly a lot lower in previous years. Easy enough to work out if you use 40/10 at £88.80 per year.
Posted by fastman about 1 year ago
bobs cost go up as the bits get harder to do and more expensive per premise to cover
Posted by jumpmum about 1 year ago
TheEuleriD
VFM takes no account of cpaital spend in BT accounts, he wants it seperately listed for BDUK spend. The fact the 1/2 year results show OR capital £250m higher than last year, and the 4th qtr last year was up £26m the 3rd £50m up, with commercial rollout spend also dropping he says is nothing to do with spoend on BDUK.
Posted by Andso about 1 year ago
I used to have internet line capable of 7mbit, now I and neighbors barely get consistent 1mbit and sometimes worse than dialup at peak hours. Getting useless ISP's and BT to do anything about is a joke, it doesn't happen. And regulators are complete shit aswel. Between traffic shaping and just plain inadequate capacity issues.. How is this country even capable of handling a nation with 10mbit.

Posted by Andso about 1 year ago
10mbit adsl coverage is something Japan achieved for most its country in coverage YEARS ago, while there fiber speeds,usage allowances etc is on whole another level for the price.. this country is still ripping people off from sub 10gb allowances per month.. what a joke.

Posted by ValueforMoney about 1 year ago
@jumpmum @Euler Correct, the capital for NGA must be itemised and split between commercial and BDUK. There is capital for PSTN, Ethernet, etc within the numbers you quote. BT has so far received more than £650m for c17,500 cabs (3.5m premises passed). Not much room for a BT contribution there. This does not stop the blagging about costs but no evidence any where including Ofcom cost attibution study.
Posted by Andso about 1 year ago
The same goal of 10mbit coverage is set for another 5years, guess that's what you get with government protected monopolies like BT. Country spends more time spying on and fucking up its own citizens lives and that of foreign countries only to be inviting them back here. Than it does on investing in future, and providing services. You won't goto Japan and find its hiring Indians call centers to sort out your issues and messing it up even more. This country is a joke and its voters are morons for allowing such a feckless government of corporate sellouts listening to lying media.
Posted by ValueforMoney about 1 year ago
@JUmpmum @Eular There is a 25 pager on BT capex or lack of outlined in a paper for peer review at the bottom of this url http://www.conservative-technology.org/#!publications--meeting-reports/c1ziz Your critique would be most welcome with counter factuals.
Posted by leexgx about 1 year ago
@Andso
quite an interesting post

guess you got problems in your specific area/bit of road, dont assume your problem is every ones problem (but getting 10mb/s on ADSL is quite good as avg is less than that)

ADSL is limited by distance from the exchange and BT don't install ADSL cabs closer to an area (like in the USA) until FTTC comes or G.Fast , BT can correct the problem in your area as going from 10mb to 1mb is a massive drop and would mean there is a line fault somewhere on the wire (assuming your modem is locking at 1mb not 10mb)
Posted by CecilWard about 1 year ago
> what does the public want

Nothing at all, because they don't want to pay for it and "I'm alright Jack". Someone in suburban England who already has 50 Mbps downstream sees no problem that needs fixing.

Meanwhile those of us who enjoy 1.75 MBps and live 4.6 miles from the exchange need FTTP (or FTTDP).
Posted by CecilWard about 1 year ago
We don't need satellite with high latency, high costs and no chance of access to our chosen ISP (unless satellite providers were _forced_ to wholesale their services and do so _effectively_).

We certainly must have wholesale services so we can have our choice of quality ISP, and no local monopolies created by government, as has already happened. Otherwise we have a second class tier of Internet users, as happened in Plockton, in parts of Skye and in the Western Isles, who were stuck with a choice of exactly one ISP or else dialup.
Posted by CecilWard about 1 year ago
If your exchange is still stuck on 20CN, ADSL1-only, then that means an absolute maximum real downstream throughput of 7 Mbps, so no chance at all of _any_ of the users meeting the proposed USO, so 100% FAIL × number of prehistoric exchanges, which equals 100% too locally. So around where I live, in Skye, and on the West Coast of the mainland, we have a certain complete 100% FAIL all round.
Posted by themanstan about 1 year ago
@VFM what is your paper?

Position paper or an objective paper?
Posted by Blackmamba about 1 year ago
Hi CicilWard.
Sorry to say but you will have to wait for your Exchange to be entered on the Where and When list see PDF on Openreach at the bottom. This is updated I think in groups weekly. Check your exchange for working parties in the weeks and ask them.
Posted by ValueforMoney about 1 year ago
@themanstan a 'true up' paper - based on the evidence in the public domain. So only for comment. Objective would be to show the opportunity to re-double the effort. It needs futher de-toxifying. It can be win win for all. I have tried to fully salute the engineering effort.
Posted by csimon about 1 year ago
[Reposted here - posted in wrong thread initially]

"What the public wants...". Well, in my experience, it's about a solid, reliable service that is there when you need it and doesn't take 3 hours to download an app update, doesn't drop out when it rains, doesn't fluctuate when a second person in your house accesses the internet, isn't dead for 2 months every year, etc etc. FTTP might have its own issues (does it?) but it would get rid of all the ADSL/VDSL woes instantly. Speed is irrelevant, people should just pay for the bandwidth that they want. Therefore the USO is meaningless.
Posted by jumpmum about 1 year ago
VFM

Interesting read, couple of points spring straight out, Grant is likely to be 2/3rds of the original thought so figures should be based on subsidy of circa £755m not £1.2b ( Table page 20)There are likely to be more than 22k cabs as some Welsh/Scots ones are less than 50 and costs for these higher as they are completely new cabs (See pencelli in forums ).
I will look deeper when I have time to respond.
Posted by themanstan about 1 year ago
Some aspects then need riders with respect to source material.

I'd itemise your figures for subsidies as it jumps from £1.2BN to £1.7BN without clarifying where the money comes from. Confusing for the uninitiated. This is what you want BT to do, so not doing it in your paper is less than ideal.

Other examples are, source material for costs, e.g. NGA slide with £300-400M dropping to tens of million, contextually it's ambiguous. Is the presentation an NGA commercial presentation or is it something else? Are the figures NGA BDUK and commercial or solely NGA commercial.
Posted by davidinnotts about 1 year ago
It does seem that with current technologies, the 'last 5%' will get something workable for streaming. But that leaves the 'last 0.001%', if you like. When the government promises that networks will cover everybody, that includes remote cottages, visitors to Rockall (to be ridiculous) and so on. As with other utilities, how much public money should be spent to give Megabit access to all, even including these? Is a hamlet of 20 households worth spending half a million pounds to connect? That's the ultimate conundrum.
Posted by csimon about 1 year ago
What is the major cost in rolling out pure fibre as opposed to copper telephone line? Is it the fibre cable itself? Is it the routing it through ducting? Just wondering what the difference is between providing a new phone line and providing a new FTTP line.
Posted by ValueforMoney about 1 year ago
Jumpmum - Thanks £1.2bn is contracted so the excess needs to be referenced and held in place. I am assuming c3,000 cabs for Wales.
Part of the job will be to move money around to where it is needed. I resisted doing a separate paper for Wales as the proxy costs, and low capital contribution makes it very toxic.
Posted by ValueforMoney about 1 year ago
@themanstan Thanks that's helpful. I need to draw on both BT commercial and NGA BDUK as one extends from the other.
It needs to be win (rural economy) win (Gov) and win (Industry - including BT - long term).
Budgets will be lost to the rural economy and the rural networks in the current manner of working.
Posted by ValueforMoney about 1 year ago
@Csimon - for re-furbs and new builds they should be no debate - fibre only, it has a lower LRIC.
To contemplate a national fibre access transition plan, you need the ambition, the policy and the incentives (change in cost recovery regimes).
Current plan is a £1.7bn subsidies upgrade and it will go further than most predicted, but it cannot be equated to £15bn-£20bn programme over 20 years. This has no status but investment of £1.5bn a year is not a monster given the substitution on the £1bn a year already spent by Openreach. I think the biggest is the labour involved.
Posted by themanstan about 1 year ago
@VFM

Good, as you aren't looking at a position paper the quality of the data needs to be contextually correct.
With contextually correct data, the inferred data is of higher quality.
Posted by ValueforMoney about 1 year ago
@themanstan Contextually correct data! Is this numerical foreplay? There is no complexity in what is essentially a civil engineering project. The scale means logistical complexity but not engineering complexity. In data or cost terms all that is needed to determine is whether c£25k represents total aveage cost per cab/fibe path for the c17.5k BDUK cabs installed to date or is it £38k. The NAO is clear. There rests the existence of a £230m capital contribution or not as the case may be. Let you input in a dop box.
Posted by ValueforMoney about 1 year ago
@andrew thanks for the Sky reference and their referral to the Frontier work for Voda/C&W.

For me it fails, for the same way BT claims of £3bn fails. When BT is focusing on NGA other things slip, as all activity has to fit within resouce and capital budgets. The NGA funding is not new money, never was nor could be.

The split discussion is unrelated to upgrading rural and a local spat on whether BT is paying its capital contribution or not.


Posted by themanstan about 1 year ago
Your complicating things unnecessarily.

If for example, the slide is from an NGA commercial presentation, then the costs only relate to BTs commercial project. If you use figures relating to BTs commercial project for BDUK costings, then they are not contextually correct as they relate to a completely separate project and have zero meaning for what you are trying to achieve.
If you cannot see or understand the difference, then you are writing a position paper and you don't need peer review.
Posted by ValueforMoney about 1 year ago
@andew continued ..How can Ofcom decide on a referral to CMA when they have never questioned BT's approach so far but try to take credit for it?
The lack of investment issue is now being discussed where there is no notion or acceptance of the need for a fibre transition plan which would demand a change of many variables. This discussion was avoided during Ed Richards tenure, so it is tough to start than discussion now.
Posted by themanstan about 1 year ago
i.e. it's perfectly natural for peak expenditure for the commercial project to fall to tens of millions once into the BDUK phase.
Because funds for BDUK phase would be accounted for separately.
Posted by ValueforMoney about 1 year ago
@themanstan must disagree, BT evidence to PAC in 2013 made clear all learnings and costs from commercial rollout would be brought to bear on BDUK project. The NAO report II shows good progress towards this.
I do not know what you mean by 'positioning' paper. It attempts to summarise the data in the public domain. I am getting some good input and your will be welcome.
Posted by ValueforMoney about 1 year ago
@themanstan, no, surely not; it is all accounted for in the Wholesale Residual Market, the CL and Product codes are the same there are no new accounting codes. My understabding is that the allowed costs are tied down tight.
Posted by themanstan about 1 year ago
@VFM

I'm not talking about the PAC or NAO data.
You have a statement in your paper, where a slide from a BT on commercial rollout presentation states that expenditure for FTTC peaks in the hundres of millions and then drops to tens of millions.
There is nothing in the slide that provides information that can be attributable to expenditure relating BDUK. You have made an uncorroborated assumption that the tens of millions is the expenditure that BT will make during BDUK.
Posted by themanstan about 1 year ago
I could say that the tens of millions relates to backfill, additional cabs and cards in the commercial network, but again I would be making an uncorroborated assumption. Do you understand now?
Posted by andrew (Favicon staff member) about 1 year ago
Another issue to consider when using the £25k average cost, is what is the spread of costs like and also does that cost average take into account that a cabinet that serves 75 premises will have a very different payback period compared to one serving 250 premises.
Posted by themanstan about 1 year ago
And having taken a second glance I can categorically state this slide does not relate to BDUK and you should be able to deduce it too...
Posted by ValueforMoney about 1 year ago
@themanstan - but we are picking up the BDUK in the accruals, and we can see the FTTC costs in cost attibutions in the Cartesian study for Ofcom.
That investment piece does not stand on its own but the volumetric can be picked up in the application to the power meters. Nothing is used in isolation.
There is nothing that cannot be solved with an ammendment to the accuals, q2 alone added a further £27m to the previous adjustment for take up.
Posted by ValueforMoney about 1 year ago
@andrew the expansions are outside the state aid measure, although BDUK guidance from August 18th has BDUK authorising payments for additional cards.
The payback is almost irrelevant if the state has paid all costs to date. The allowable cost budgets permit this. Hence accumulated £682m (£126m 13/14, £392m, 14/15, £103m q1, £64m Q2) state aid for c 17,500 cabinets + a bit wip. This requires the accruals to build and build.
Posted by themanstan about 1 year ago
The slide was authored in 2013, phase 2 was announced in 2014. Big hint.
Posted by ValueforMoney about 1 year ago
The £682m state aid for c17,500 cabs to Sept 2015 includes over payments where proxy costs are used - possible first 1m in Wales + NYorls + Lancashire(?) of the 4.1m premises in phase 1.
The risk was removed by reducing the size of the intervention area to 4.1m and contracting for £1.2bn of allowable costs. Hence BT capital contibution yet to emerge - £230m due to Sept 2015. It is easy to fix.
Posted by ValueforMoney about 1 year ago
@themanstan the £1.2bn and the exta £500m was fully undestood when the Framework was agreed in June 2012. The slide for analysts was a year. If you though subsequent transcripts, Citi - Simon Weedon queries Chanmugan the detail, you see for youself what Chanmugan said.
Posted by themanstan about 1 year ago
Which means the values for tens of millions, 3-4 years later as stated in the slide,occur in 2016-2017 after BDUK phase 1...
Posted by themanstan about 1 year ago
Without providing all that additional information in a clear cut incontrovertible form with the slide with the statements have made you have only assumptions.
Posted by themanstan about 1 year ago
You wanted critique, if you make statements they need to be fully backed up. You need to ignore what I or you know. You need to reference everything relevant either in the paragraph, or if you have information later in the paper you need to reference that in the paragraph so that the reader knows that you will back up your claims with clear worked details.
Posted by ValueforMoney about 1 year ago
@themanstan ok this is what I need. It is turgid enough though, now you want it more turgid! Your being generous to TC. I only want to do enough to improve the outcome, I do not wish to suggest wrongdoing of any kind, just enough to keep the money visible and in play. Oddly enough it keeps the workers in work, clearing duct, laying duct and pulling cable, paying for honest work, not plonkers with spreadsheets.
Posted by themanstan about 1 year ago
Which is why there are annexes for supplementary information in good papers. It would allow you to place your statements and obseervations in concise form in the main paper and have the detail workings in the annex.
Posted by andrew (Favicon staff member) about 1 year ago
@valueformoney I was not referring at all to expansions for things like extra line cards, but the much simpler scenario that cabinets do not serve a uniform number of premises.

The issue of the FTTP overlays and native FTTP areas while small could be very important in counties where it is used more e.g. Surrey.

Plus the continuing infill in Northern Ireland shows that costs are still being incurred, i.e. cost per premise was low but benefit for some was NIL.
Posted by ValueforMoney about 1 year ago
@andrew @themanstan Look, the appendix on cost attibution is 12 pages, the BT capex analysis over 16 quarters is another 10, there is a spreadsheet and notes for each of the 44 projects, and this is before BT's pwpt presentations are used. More constructive is to use the existing infor to nudge the changes needed. Increasing the drama is not necessarily constructive.
Posted by ValueforMoney about 1 year ago
@andrew @themanstan ..not forgetting a line by line analsysis of the 2013 representations relied upon by BT at PAC. The fix is easy and outcome is good, so if absolutely needed it can be produced, but it would totally wrong to use it in any discussion on the future stucture of BT, that needs covering off.
Posted by Somerset about 1 year ago
@VFM - which document has notes for 44 projects?

How will your activity 'nudge' anyone when the counties have all the numbers?
Posted by Somerset about 1 year ago
@VFM - do you have the numbers of cabinets planned for each BDUK area?
Posted by ValueforMoney about 1 year ago
@Somerset - I can attached an appendix for the 44 projects.
@Somerset - I have estimates for each area. It is easy to calculate and there are some good BT presentations listing the number of network elements online.
Posted by Somerset about 1 year ago
@VFM - can you add the cabinet numbers and a link to the document.
Posted by ValueforMoney about 1 year ago
@Somerset - I will send to BDUK and BT Group first with a request to identify fundamental errors.
Posted by Somerset about 1 year ago
@VFM - how do you calculate cabinet numbers for each BDUK area?
Posted by ValueforMoney about 1 year ago
Somerset - The network is largely homogenous to at least 90% so the network elements tend to support an average distribution.
Press releases confirm phase 1 populations.
Some counties publish the cabs so you can count them.
I am not trying to be 100% correct but enough to disprove the arguement. The arguement on costs and capital is more true than I would like it to be.
Posted by Somerset about 1 year ago
@NGA - where are the county cabinet numbers? There are huge differences of £/property across the projects.
Posted by ValueforMoney about 1 year ago
@somerset I will add as an appendix in a future release.
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