Broadband News

Have your say on proposed new duties for Ofcom

If you are not on the list of people to be consulted over the proposed new powers for Ofcom and many broadband providers are not then now is your chance. The full consultation document is on the Department for Business Innovation & Skills website, the process started on 13th August 2009 and ends 25th September 2009, with responses published on 16th October 2009.

The consultation is aimed at consulting on the idea that Ofcom be given new remits with respect to the communications industry:

  1. Promote efficient investment in communications infrastructure; and
  2. Provide a full assessment of UK communications infrastructure every two years and to alert Secretaries of State to any matters of high concern regarding developments affecting the communications infrastructure.

The consultation is taking place as the Government considers that the current Ofcom powers have tended to emphasis short term cost reduction rather than longer term investment in future infrastructure. In laymans terms this can be read as meaning that while Ofcom has managed to make UK broadband very cheap, in comparison to other countries investment in improving networks is lacking, i.e. networks are not expanding to cope with increased usage and newer technologies are delayed as they would raise prices in the short to medium term.

The UK is unusual in that while it has massive competition at the retail level across the country and at the wholesale level in the more densely populated parts, there is little competition at the infrastructure level, e.g. all DSL still travels across an Openreach local loop. Changes to the rules might make it more attractive for firms to take the sub-LLU route and unbundle street cabinets, or encourage retail providers to sign up to use the Fibrestream, H2O or Digital Region networks.

Encouraging investment in the current economic climate will be a tough challenge, but as some critics say if we continue to squeeze every possible bit out of a Victorian technology we will be left behind.

Comments

I totally agree, we cannot continue to use 1st gen broadband when the rest of the world moves on. Ofcom wouldn't take a haporth of notice of what the people say, but if only someone could make them sit up and take notice of what is happening maybe they could do something? Or maybe its one quango we can do without. I don't see the point in spending two years researching something to deliver a 'report' which will already be out of date before it is printed.

  • cyberdoyle
  • over 7 years ago

I agree, OFCOM should go, it's a complete waste of time anyway.

  • mitchja
  • over 7 years ago

"as the Government considers...Ofcom powers have tended to emphasise short term cost reduction"

Wow. Someone in power has noticed? Maybe there's hope after all. Not much of course since this is just a consultation document. It'll have to be reviewed by a committee first.

  • AndrueC
  • over 7 years ago

If the current powers encourage a 'grab and run' mentality, the Government should recall that they were the ones who established this narrow, short-termist remit in the first place. The ire at Ofcom's general uselessness would be better directed at the Labour puppet masters (who seem to entirely avoid the blame) than the Riverside House Muppet Show.

If Ofcom is a failure, it only emphasises Labours inability to understand business in general, and communisations in particular. But then, if the only ones whose advice you listen to is those in the industry, where's the surprise.

  • carrot63
  • over 7 years ago

Someone finally realised that with infrastructure competition and open infrastructure come far healthier wholesale and retail competition than can be achieved with single infrastructure. Not to mention that infrastructures will compete on more than just price, but performance too, raising quality of the wholesale and retail products. Wow.

  • Dixinormous
  • over 7 years ago

careful... when they all realise a cosy agreement that makes them all money and only keeps a few customers peeved then it will need regulation again... see roaming charges.

Unfortunately, quango's are biased towards industry, not the customer... such is the deal that gov has with money these days.

  • whatever2
  • over 7 years ago

Simply removing business rates on fibre deployment would go a long way towards resolving all of this.

  • Dixinormous
  • over 7 years ago

Surely they will need to farm out to some University the job of compilating of what a 'good' infrastructure looks like.

You cam imagine that without any public investment then you would expect such and such, ie what we've got.

With a publicly backed plan to deliver care, reduce traffic congestion, the investment and infrastructure looks different.

At the very least, the goal setting and reporing should be separate from the those charged with delivering those goals.

  • mikeblogs
  • over 7 years ago

[email protected]

No. Again, to overcome the existing infrastructure there would need to be government investment. Where there's massive upgrades, it's related to a lack of deacent existing infrastructure or government investment in every case I can find.

And screw "open". Again, it was bad enough that the government decided BT was going to do LLU not FTTH in the past...

  • Dawn_Falcon
  • over 7 years ago

£7.50 pa rates is neither here nor there. Just something to hide behind.

  • herdwick
  • over 7 years ago

Remembering the Muswell Hill saga how would unbundling cabinets work?

  • Somerset
  • over 7 years ago

Dawn you ickle corporate whore you. The business case is more than present in some areas, it's a national investment that would be the issue.

Likewise lack of decent infrastructure isn't the be-all as decent infrastructure tends to very quickly appear from incumbents when others begin deployment of NGNs.

So yes partly agree but partly certainly not. You've missed Paris I'm guessing, no shortage of quality infrastructure there and no government money but competing fibre networks being built.

  • Dixinormous
  • over 7 years ago

Last I checked also the government didn't tell BT they couldn't FTTH apart from many years ago, a network which would have needed loads of cash to have been brought to modern standards assuming it had been built in the first place. The lack of competition it would have caused would have been awful, especially given BT's hamstringing of FTTC/P in their trials (100/2, yay). No competition would have left us a potentially world class infrastructure with 3rd world products running on it.

  • Dixinormous
  • over 7 years ago

Anyways I'm a telecomms guy who is an open FTTP networks zealot, you're a games developer who never says a bad word about BT apart from to blame others for their shortcomings, we'll never agree and this isn't the place to do it again :)

  • Dixinormous
  • over 7 years ago

Andrew - what changes to the rules are these regarding making SLU more attractive? The only rule changes were to allow Openreach to locate MSANs within PCPs or extend the PCPs, other operators still cannot unbundle cabinets they have to build their own cabinets with all the fun that entails and buy expensive tie pairs.

  • Dixinormous
  • over 7 years ago

Products are easier to fix than infrastructure.

I'm someone who's worked on both sides of the divide, both for an ISP and someone delivering services across them, and bluntly there are far more challenging networks to deliver across than BT's.

(At least one of the games we made plain didn't work multiplayer for KCom ppl, frex)

  • Dawn_Falcon
  • over 7 years ago

And in Paris the builds started funding at roughly the same time, so there was no incumbent infrastructure.

  • Dawn_Falcon
  • over 7 years ago

Oh, totally. France doesn't have upwards of 15 million ADSL subscribers, nor an incumbent operator (France Telecom/Wanadoo/Orange SA) with roughly 50% of the market.

Oh hey, and all the broadband offers are apparently unmetered. What was that you were saying about BT's egregious bandwidth costs?

  • ElBobbo
  • over 7 years ago

I've been involved in a campaign to stop Ofcom doing something extremely silly - charging vast amounts for maritime and aircraft radio (needed for safety). Ofcom is pretty much a tax-gathering outfit, and if they get their claws into broadband we can expect to see the prices rocket.

Fortunately, it's unlikely Ofcom will exist after this Government goes.

We should oppose this!

  • KeithJillings
  • over 7 years ago

EbBobbo? It's regional, not country-wide that infrastructure matters. Look at the interest in fibre builds in Hull, where the incuumbent is indeed crap.

Keith - True, it's likely that the Tories will being in something far worse, along with far more stringent mandatory filtering.

  • Dawn_Falcon
  • over 7 years ago

If I'm reading this correctly you're saying that Paris with its' coverage of large swathes by Numericable along with unbundled triple play ADSL2+ from free.fr, etc had poor infrastructure?

I also question what the Tories will do, given that they are supposedly more free market and libertarian and far less of a babysitter than the more socialist Labour.

  • Dixinormous
  • over 7 years ago

The Tories need to differentiate themselves, Dixi, and they've made it plain that they will be doing things "For Our Own Good, To Restore Our Values" (caps deliberate) including internet filtering.

And you need to look at both the funding dates and tax breaks in Paris.

  • Dawn_Falcon
  • over 7 years ago

Do you have any kind of links for these tax breaks? I'm also confused as to what you mean regarding funding dates, unless this came from the government it'd be commercial funding wouldn't it?

  • Dixinormous
  • over 7 years ago

When the various projects hit their private funding targets.

Local authorities in France have been offering *very* good terms on loans to companies rolling out infrastucture.

And I'd suggest you look at precisely how badly France Telecom got shafted on LLU, it makes BT's situation look good, and has completely starved them of funds. Now, those companies are cherrypicking FT's best areas for FTTH.

Also, FT's cabinets serve wider areas than BT's.

  • Dawn_Falcon
  • over 7 years ago

http://net.educause.edu/ir/library/pdf/EPO0801.pdf

Good summaries there, also a good view on why America is screwed in the medium term.

  • Dawn_Falcon
  • over 7 years ago

I see - so there was no direct public funding involved but preferential loan rates. The fibre build out was born from operators gaining market share through LLU and then receiving the kind of stimulus, rather than obstruction, that should be present here.

Looking at FT's figures. http://www.francetelecom.com/en_EN/group/global_footprint/countries/france/france-fi.jsp they don't seem too agonised or short for cash, and BT were according to your document merely brought in line with mainstream Europe.

  • Dixinormous
  • over 7 years ago

Some areas naturally breed more competition in the same manner that for example some exchanges have 5 LLU operators others have 0. If this could be extended to layer 1 infrastructure this would seem good. Posts like http://forums.thinkbroadband.com/notspot/t/3690692-re-cable-upgrade-fttc-or-community-fibre.html don't fill me with joy that it'll ever happen here though.

Either way FT seem to be doing just fine. Good thing they didn't sell their mobile company or are losing a bucket load subsidising a poorly performing consolidated IT division.

  • Dixinormous
  • over 7 years ago

Is it just that OFCOM are another government-based organisation that have 'dentures' only instead of a full set of healthy teeth? The situation with LLU and funding as described sbove, needs to be 'got a grip of' in order to prevent the french situation occuring here in the UK.From what has been described previously, it seems like the us 'the consumer' may end up bearing the brunt of these changes, either through taxation of some kind or a significant increase in the cost of our communications requirements.

  • Charlie1375
  • over 7 years ago

What French situation is that Charlie, the one of having multiple operators laying fibre optics?

  • Dixinormous
  • over 7 years ago

Dixi - As I've said before, government funding is funding, regardless how-delivered. Cheap loans certainly count.

And I said it was a good summary of the situation, I don't agree with it's "why" reasoning in most cases.

FTTH in France is cherry-picked areas, not a wide rollout.

  • Dawn_Falcon
  • over 7 years ago

Since when does a few easy loans make something suddenly become commercially viable when it would apparently require decades of operation before it turned a profit, hmm?

  • ElBobbo
  • over 7 years ago

What's the issue with cherry picked areas? Surely that's better than no rollout at all? Lessons learned, economies of scale improved, etc.

  • Dixinormous
  • over 7 years ago

More regulations just mean an even more stifled industry. Death to Ofcom (or at least vastly slimmer).

"If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidise it" Ronald Reagan

  • labrat
  • over 7 years ago

Dixi - Because it dosn't lead to wider rollouts. VM's experiences here hilight that as well, they're only now moving even to infill!

Elbobbo - My point about government investments stands.

  • Dawn_Falcon
  • over 7 years ago

Wouldn't that be more related to VM's finances than anything else though? Rollouts were stopped part way through because ntl and Telewest ran out of money.

Incremental rollouts are the only viable option for most players, to expect a national one straight off the bat is unrealistic. Even Verizon are only covering about 50% of their passed areas. National FTTP isn't going to happen any time soon, this should *not* prevent those areas which are viable from receiving it. Mine might not even be in that group who knows but it certainly shouldn't preclude it.

  • Dixinormous
  • over 7 years ago

It's all to do with finances.

Look, as I said, in every case I can find of FTTH rollout there was either government funding or the existing infrastructure was, bluntly, crap.

The UK's broadband rollout is very unusually wide, and that is down to BT alone. I think that is better than smaller, faster rollouts and think that BT's FTTC rollout should be in some way government subsidised.

It's not like FTTC connections won't be avaliable to LLU operators either.

  • Dawn_Falcon
  • over 7 years ago

The charge will in no way cover the actual cost of rolling out fibre. BT missed the boat several years ago, as did Oftel and now that disaster known as Ofcom. No one in either Government or the relevant Regulator(s) ever looks far enough ahead to see what will be needed. Let's face it hard drive capacity is now in terabytes, software patches come in megabytes, we have HD TV on demand and no one sqaw this coming? Come on, please!! Moores Law anyone?

  • Gryfon
  • over 7 years ago

BT didn't 'miss the boat' - they were refused entry.

Thatcher's government was persuaded by cable operators (and probably Sky) not to allow BT a broadcast license. Without that ability BT made the sensible decision not to bother.

FTTP is not viable unless it comes with a PayTV package. That's a big part of the problem. The UK already has excellent PayTV options available to 99% of the population. That takes a lot of the wind out of the FTTP sails.

  • AndrueC
  • over 7 years ago

For more information: http://business.guardian.co.uk/economicdispatch/story/0,12498,1207132,00.html

  • AndrueC
  • over 7 years ago

Gryfon - Moore's Law says nothing about bandwidth. Hardware quadruples in power for each time bandwidth doubles, more or less.

  • Dawn_Falcon
  • over 7 years ago

"Since when does a few easy loans make something suddenly become commercially viable" - when it eliminates all commercial risk and reduces the necessary return by 10% ? ie from 15 to 5%.

  • herdwick
  • over 7 years ago

Preferential loan rates would not have that severe an effect.

  • ElBobbo
  • over 7 years ago

@Dawn_Falcon

You are correct about Moores law, I think the appropriate ref should be Nielsens law:

Nielsen's Law of Internet bandwidth states that:
•a high-end user's connection speed grows by 50% per year
•you don't get to use this added bandwidth to make your Web pages larger until 2003

http://www.useit.com/alertbox/980405.html

  • lordchea
  • over 7 years ago

"Preferential loan rates would not have that severe an effect. "

if they are interest free and underwritten by local govt they would.

  • herdwick
  • over 7 years ago

Sure, and what evidence do you have to show that all of the companies rolling out fibre are getting interest free loans?

  • ElBobbo
  • over 7 years ago

Dunno... but looking at the article, I think companies might use technologies like H20 when they actually announce they have actually installed more than a single line.

Still no mutterings from them

  • whatever2
  • over 7 years ago

ElBobbo - Er, some French local authorities offered those loans for FTTH rollout, as previously stated...

  • Dawn_Falcon
  • over 7 years ago

Having done some research, specifically:
http://www.cullen-international.com/cullen/cipublic/studies/broadbd.pdf and http://www.itif.org/files/2008BBAppendixB.pdf
1) Local authorities were offered reduced interest rates (4.95%) - certainly not interest free.
2) The total investment by the government in loans cannot exceed 1.7bn euros and may be significantly less.
1.7bn euros is a drop in the bucket when it comes to rolling out FTTH/FTTP. The companies are not getting free loans.

  • ElBobbo
  • over 7 years ago

1.7bn Euros of guaranteed low-rate funding is a far cry from "no funding".

  • Dawn_Falcon
  • over 7 years ago

That 1.7bn euros is the total amount of funding and only a very small fraction will be seen by any one organization - it's a 20 year funding amount.
So again, many competing FTTH companies in France (the 1.7bn covers the country) and very little in the way of funding.

  • ElBobbo
  • over 7 years ago

Ofcom is a waste of space. The money that goes to them could go into infrastructure. Every little helps...

  • cyberdoyle
  • over 7 years ago

It's funds which can be levered into commercial funding, ElBobbo. It had an influence out of all proportion to its size, and in some cases is even being matched by further funding.

Cyberdoyle - Given there's no "little" at present being given by the government..

  • Dawn_Falcon
  • over 7 years ago

So.. what you're saying is that it's all being done on a much, much smaller budget than BT by several companies with much, much better results. Great, we're in agreement.

  • ElBobbo
  • over 7 years ago

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