BT Chairman selling next gen fibre to the Welsh Assembly
ISPreview spotted some interesting news that it would appear BT is sending out a very senior salesperson in the form of Sir Michael Rake the BT Chairman. It would seem the chairmans role is to sell the idea to the Welsh Assembly that with some financial input that Wales could be at the forefront of any fibre improvements that BT carries out. The full quotes can be read over at WalesOnline.co.uk.
While many see the £1.5 billion announcement from BT as a certainty, it is worth remembering that BT see this spending as conditional on Ofcom giving BT what it views as attractive terms. His comments also give some idea of the timescales BT are looking at.
"What BT have said is that we believe it’s important and we’re willing to make an initial investment of £1.5bn in fibre, which could serve up to 10 million people, subject to Ofcom giving us the right pricing mechanism, ie that there’s not a cap on the price that makes it completely unacceptable from our shareholder point of view to take the risk of investment.
We need that from Ofcom, and we need it quickly if we are to move forward.
Then we’ll go to the Cabinet, but it’s going to be three, four or five years before we can start making an initial impact on this. Taking it to the whole country would obviously cost a lot more and take more time."Sir Michael Rake, BT Chairman
Interestingly BT seems to be taking the view that there is no need for central government money, which fits in with the recent BERR report, but rather BT is looking at the regional power bases for assistance from a funding point of view. In all probability what is likely to happen is agreements on for example Cardiff and Swansea areas getting FTTC in the first wave, and then money from the Welsh Assembly being used to subsidise network roll-out in areas where commercial roll-outs would never go.
Oddly Sir Michael Rake appears to be saying that one reason why areas should help subsidise the next generation products is that people sometimes dig up and steal the local copper network. A fibre network and its hardware is not immune to similar problems. One could counter this by pointing out, perhaps Openreach could reduce its network maintenance costs by upgrading to fibre which has a lower scrap value, with the thieves saving Openreach the task of pulling copper out of the ground to make space in existing ducting.
One real danger in seeking money from the regions, is that many may feel hoodwinked in that they provided funds for an ADSL roll-out, only to find the same firms coming back asking for more within a couple of years. Any not-spot scheme that deploys now is potentially a waste of money if it does not provide an easy low cost path to being able to support speeds of 50Mbps and upwards. While broadband of 0.5Mbps is more than adequate for shopping and mainstream tasks currently, in the same way that dial-up was 10 years ago, in another 5 to 10 years slow broadband will limit people in what they can do.