Broadband News

The FoD dream becomes a FoD nightmare

Fibre on Demand (FoD) which put simply is an option for those served by a VDSL2 to order a full fibre (FTTP) service from Openreach via a retailer and pay towards the costs of installing just fibre for them has existed for some years but the old contract terms and monthly costs made it unpopular. In November 2017 changes where announced to how Fibre on Demand would be priced and it seems that many got too excited and may have underestimated that changes that shifting from an expensive three year contract to a cheap one year contract with most costs front loaded into the setup fee.

The old system with its three year contract would see people/businesses paying an upfront fee in the region of £2,000 to £5,000, but a monthly cost of £200 or more for 36 months.

The new system dropped to just a 12 month contract with monthly cost dropping to the standard GEA-FTTP pricing and a variety of speeds available, but the downside was that 36 months x £100-£150 was going to be added to the up front build cost. The actual upfront cost previously used a set of distance based prices, but the new system is more bespoke to reflect what is actually needed in terms of distance of fibre, splitters, new pavement chambers etc the cost for the various elements are defined in the Openreach ECC Price List.

So March arrives and the quotes start to emerge for the new Fibre on Demand pricing and it is hard to find anyone who is really happy with the new system when they are discussing their quotes on our forums. The new system should mean that households on the same segment of the PON (Passive Optical Network) will be able to order GEA-FTTP at the standard install and monthly pricing once the Fibre on Demand customer is live and allowances are made in the pricing for the FoD customer and the variations between what the public think the number feeding into the discount and the initial quote are common.

A common misconception is that FoD is built out from your VDSL2 cabinet, the reality is that as part of the VDSL2 roll-out the fibre network between the cabinets and the handover exchange is dimensioned so that at a future date if the VDSL2 is replaced by FTTP that the core number of fibres to support GPON are available at various aggregation nodes. Each aggregation node can support some 1440 GPON premises and the small number of fibres that feed each VDSL2 cabinet (one of which is used for G.fast in areas where that is available). The aggregation node is often close to a cabinet, but since it might service anything from 2 cabinets to maybe 10 the exact location is not easy to predict and the per metre costs for blown fibre or fibre cable in the Fibre on Demand service are from your premise back to the aggregation node. The key to guessing where an aggregation node would be is to plan a GPON full fibre network in the area using the existing poles and ducts but ignoring the VDSL2 cabinets.

The quotes that we are seeing people posting varying from several thousands of pounds for the upfront build charge to a whopping £39,000 are not the final quotes, but a rough and ready estimate designed to give people an idea of the costs involved thus decide whether they wish to proceed with the full £250 survey which will nail down the costs. The £39,000 figure repeats enough people thought there was a cap, but while it seems the Openreach system has a limit to what it reveals it would appear that this figure is more of a holding price to say its going to cost a lot and the full survey is needed.

There is no doubt that Openreach is going to be accused of ripping people off, but we suspect that if you approach any other operator and ask for a similar distance bespoke build that pricing is not going to be that dissimilar for the same amount of work. In some cases for businesses the competition in the Ethernet/leased line market may make ordering that service cheaper over a period of a few years, and is worth exploring. Also since the EAD/Ethernet services are not designed to maybe expanded to cover hundreds of homes in a decades time the deployment can often involve less components reducing costs to build it.

There is an argument that the Fibre on Demand adopters are helping Openreach build their FTTP footprint, and where groups of businesses or home owners club together in theory joint orders are possible to reduce the impact of the upfront cost but the mechanisms behind this are not working too well it appears. An interesting observation on full fibre take-up comes from the Gigaclear roll-out where in rural areas which often have just ADSL or ADSL2+ type speeds take-up is still only running at 25%, if Gigaclear was able to boast of 75% takeup and others showed similar take-up we bet that there would be a lot more FTTP activity from Openreach and others.

Delivering fibre to the premises is generally only reality cheap when you can cover a lot of premises in a short distance, hence why apartments get so much fibre love on the continent or if you can get volunteer labour to do all the slow jobs i.e. with full fibre it is not the technology or fibre that is expensive but the labour involved and when working on pavements and roads all the planning and safety aspects to be considered. This is precisely why CityFibre via its Vodafone FTTH partnership is aiming to cover complete areas rather than just a few homes in a few random streets.

So why did Openreach change the pricing system, well we have believed all along that it was to make the fibre on demand service fit in better with the various voucher schemes and help to grab some of the money from the £200m Local Full Fibre Network scheme which might expand to a nationwide voucher based full fibre scheme in time. Dare we suggest that how local authorities run that scheme could also be used to adminster any Universal Service Obligation scheme?

Why do we believe Openreach is after the vouchers? Put simply they've seen others make good use of older schemes where sometimes it felt like install fees jumped from a £200 before a scheme existing to 1 pence short of the voucher limit when the scheme started.

So now that the first eye watering prices for the build cost are out there we suspect that some Walter Mitty types may stop obsessing over the service and the few small providers who are working to deliver Fibre on Demand services will hopefully have a much improved ratio of inquiry to person who actually orders a live service.

Comments

No ones willing to pay for the survey £250 exc vat because it non-refundable if the person decide to cancel after the survery real cost has finally answered by openreach. By the way my DSL Checker has appear to show up G.Fast of 246 down and 35 up with planned on my street cabinet. So, I will take the G.Fast rather than expensive FTTPoD but one day it could change to become FTTP and much cheaper FTTP to order.

  • adslmax
  • 4 months ago

My G.Fast Checker here: https://postimg.org/image/u03rixn5h/

  • adslmax
  • 4 months ago

It should be pointed out that at least for the next few years, cabinets which get G.fast will not be seeing FTTP deployed for those who can benefit from G.fast.

  • andrew
  • thinkbroadband staff
  • 4 months ago

If Gigaclear can only attract 25% of ADSL/ADSL2+ customers what proportion of FTTC customers who must already have good VDSL2 speeds, are going to adopt G.Fast even if it just costs £5 to £10 per month more?

  • Michael_Chare
  • 4 months ago

Michael - it will come down to the next "Killer Application" that drives ever increasing speeds.

First it was the ability to load websites quicker, and maybe download some songs.

Then came along streaming Video from the likes of Netflix - but even 4K only uses around 40Mbps.

  • pjohn
  • 4 months ago

I think the article is confusing the underlying costs 0f £2-£3 a metre for overlaying fibre on existing poles, and the payments needed to get BT Group out of bed on this matter.

Your correct it is hard to orchestrate but plenty is being done and the monies available in LA accounts and sums owed by BT make much more possible.

The barrier is the shift from needing to provide an estimate of £3,000 a property and a quote which for very many projects are in £800-£1,200 range. The nightmare is the lack of resource rather than the funding. You point about the role of LA in the B-USO is a good one

  • ValueforMoney
  • 4 months ago

Fibre on Demand and individuals talking about their quotes is nothing to do with Local Authority accounts. Unless you the LA are the customer, e.g. ordering FoD for a council property.

The reason projects are in the £800 to £1,200 range is because they don't do just one property usually, but a number in an area and there is cherry picking involved.

  • andrew
  • thinkbroadband staff
  • 4 months ago

Andrew, most DP serve more than one customer. In Co. Fermanagh recently, BT installed connectorised FTTP on a DP for two customers outline Derrylin - remarkable and wonderful to see. FoD is just a means of aggregating demands for small FTTP-PONs. We at the stage where a few years ago where folk thought an FTTC cabinet and path averaged £50k, Phase 1 was half that minus the BT contribution. There is a similar learning curve taking place here. Openreach keen to do more, the hand of BT Group is still acting as a restraint. Interesting to see if English County Councils keep going or stop.

  • ValueforMoney
  • 4 months ago

"In Co. Fermanagh recently, BT installed connectorised FTTP on a DP for two customers outline Derrylin"

So how is that the FoD product?

Surely that is just the ongoing NI work deciding to deploy native GEA-FTTP to that location?

  • andrew
  • thinkbroadband staff
  • 4 months ago

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