BT dismisses MPs' calls to snap off Openreach as 'wrong-headed' BT has dismissed calls by more than 100 MPs to separate broadband arm Openreach as "wrong-headed", in response to a damning report that found that despite the telco having received £1.7bn in subsidies to get Britain online, 5.7 million people still cannot access the internet. The report, titled "Broadbad" was from a coalition …
Openreach is the supplier to Sky, so yes I can well believe that there is some Murdoch influence at work here but I doubt it has anything to do with stitching up BT in a legal battle since doing so would likely only disrupt the infrastructure upgrades which Sky needs. It might bring long term benefits for Sky if Openreach was independent of their competitor (BT) but in the short term the transition would hurt them just as much.
"since doing so would likely only disrupt the infrastructure upgrades which Sky needs."
I guess that depends on the output of a sum. The sum would weigh up the cost to Sky of having BT compete against it for the sport coverage, versus how much extra profit it could make from a better UK broadband network. Which business is most important to Sky - sports and satellite TV or Internet?
Remember that BT makes money from all phone lines regardless of the phone/internet provider, except Virgin.
If Murdoch can get that revenue stream away from the company that makes the BT Sport-Vision-thingy then it's a big win for Sky. The calculation will be based on how much Virgin can gain while Sky and BT are squabbling.
The gift that keeps on giving.
There speaks a boy not old enough to remember how expensive voice calls were under state ownership, how it took six months to even get a line installed, and how the state owned operator thought it acceptable to offer only "party lines".
But don't let any inconvenient facts stand in the way of religious belief: Vote for Jezza and we will soon have a Venzuelan style workers' paradise here in the UK.
> how expensive voice calls were under state ownership
Have you tried roaming abroad? Until the EU put the boot into European charges, the very efficient and customer-friendly privatised mobile networks could gouge you almost all they wanted.
> how it took six months to even get a line installed
Now it takes six years to get broadband installed. And you have to pay for it twice - once in handouts to BT from your taxes, and again in monthly charges.
>But don't let any inconvenient facts stand in the way of religious belief:
Quite.
>> how it took six months to even get a line installed
>Now it takes six years to get broadband installed. And you have to pay for it twice - once in handouts to BT from your taxes, and again in monthly charges.
Years ago, it could take 6 months for everyone to get a new line installed. Yes, for some people, it might take 6 years now to get broadband now, but those people are in the, what, 5% of the population that live in 'remote' (geographically distant from central communication) areas.
So - treat everyone equally and give everyone a shocking service? Is that really the way to go?
Keep up pressure (and subsidise if appropriate) to ensure that as many people have access to the Internet as possible. But let's stay sensible and proportionate. I may well retire to the Highlands in a few years - if I do, I may have to accept a measly 1Mb connection whilst my family down south will be enjoying Gb to the door. But that is my choice...
I'm not in the 'Privatise everything' camp. Nor in the 'It is private, so it must be better" camp. And FWIW, I'd bet that I've been on more picket lines sacrificing my salary to support others, than most people reading the Reg. But this rose tinted view of the history of state run enterprises (British Layland. British Rail. British Coal, GPO etc.) doesn't cut it and distracts from the real problems and challenges facing us today.
I lived through privatisation in New Zealand.
We _had_ similar problems to UK users, although the party lines were targetted ruthlessly for elimination.
When the Post Office Telecoms department was turned into a State Owned Enterprise (and broken up into multiple operating companies under head office), the first thing they did was eliminate most of the middle management - end result usually being that when you applied for a phone line, you'd get home and find dialtone, or a man preparing to dig up the footpath to run a cable.
It was also profitable.
Everything went to pot when ideologically driven sales resulted in the SOE being sold off. All infrastructure projects got cancelled, plans to dump short-distance toll zones were axed along with plans to majorly drop LD charges(*) and all the operating companies were repaidly remerged into one body. what followed was 20 years of flagrant market abuse (which is why NZ is held up as the poster child for how not to private your telcos). Based around the telco being secure in its belief that as 40% of what traded on the NZSE, plus the single largest investment the NZ govt had in its pension schemes, they were too big to tangle with (and they were, effectively dictating telecommunications policy, despite a "hostile environment" being cited time and time again by external outfits which declined to set foot in NZ)
One of the telling things when the NZ government finally couldn't ignore the problem any longer and moved to curb the telco was that TCNZ attempted to sell the BT/Openreach model, preemptively creating divisions.
The NZ regulators studied what had happened in the UK, realised the extent of market abuse BT has been perpetrating and made any further broadband funding contingent on the breakup of the companies.
The EXACT SAME ARGUMENTS were raised against breaking up TCNZ (Spark/Chorus) as BT is making now, down to the pension liabilities and Openreach not being viable. In the end it's the Openreach side which is robustly healthy(*), whilst the old dialtone company is in serious trouble.
(*) And so is the market. Chorus (NZ's Openreach) sells copper/fibre/duct access to all comers at the same rate, actively seeks out customers instead of hiding and without the dead hand of head office dictating anticompetitive behaviour, things get fixed or installed quickly, no matter who the customer is.
The real irony is that Spark (the old dialtone company) is loudly griping that Chorus charges too much for lines, despite the (govt regulated) figures being based on what was provided pre-breakup, substantially lower than what non-TCNZ customers were paying pre-breakup and the very same company was whining that the proposed line charge figures were too low, pre-breakup.
One caveat though: The NZ regulator has been tough on line charges and may have recently pushed them too low to be sustainable, although it's more likely that they've pushed them out of being "comfortably profitable". They're also strongly encouraging move to fibre everywhere.
Bollocks.
I'm old enough to remember when you could make a call from a phone box using just a 2p piece.
Today? I pay £40 just for the fucking "rental", without even making any calls.
Greed may be "good" for the greedy, but it doesn't really do much for the rest of us.
Actually part of the GPO really was. I sent some time working in Martlesham 25 years ago, and in between watching US training flights (how can you tell when one of the A38's has crashed - there's another one circling just above the crash site), got to see and participate in some rally interesting stuff.
Now the GPO business units - I agree, they were another matter altogether. I fondly remember 5 years before, rewiring some US socketed phones to provide multiple phones at a reasonable cost in my own house.
Now living in the Scottish Borders, I get a princely 1.5M land line from BT - on a dry day. I get 8M on my 4G mobile, which very conveniently is an unlimited data plan (a very nice offer from 3 a few years ago). Guess how the house network reconfigures when I am at home....
"Now living in the Scottish Borders, I get a princely 1.5M land line from BT - on a dry day. I get 8M on my 4G mobile, which very conveniently is an unlimited data plan (a very nice offer from 3 a few years ago). Guess how the house network reconfigures when I am at home...."
You mean you have a choice of provider? That can't be right, Shapps said BT has a monopoly.
I live just outside a metropolis - Cambridge.
I live in an area BT are allowed to colour 'green' as they have enabled us for superfast broadband.
Guess how fast my broadband is.
1.5Mb/s on a dry day. And no-one offers unlimited 4G anymore.
Hey - Maybe BT can buy a mobile phone company and offer a fixed price 4G contract to all those customers otherwise stuffed by them when it comes to cabled Broadband.
Now there's a thought....
And no-one offers unlimited 4G anymore.
Well Three will transfer existing One Plan contracts with All-you-can-eat-data and Unlimited tethering (this is most important as not all All-you-can-eat-data plans included unlimited tethering) to a new subscriber. I would hope that owners of one of these SIMs/Plans would, rather than simply trade them in as part of upgrade, sell them on ebay etc.
You mean you have a choice of provider? That can't be right, Shapps said BT has a monopoly.
Quite right, I do have a choice - but not one that a lot of people have in the UK. I was lucky - really. Walking past a 3 store, I saw a big handwritten poster - a 'managers special offer', £15 per month for unlimited data, 5000 minutes a month and 5000 texts. Well I took it.
Funnily enough, I get a call from 3 every couple of months or so (I have retained the contract for about 4 years) offering me a great new phone with a new contract - funny though, never with unlimited data. Now as a bear with little enough brain to like shiny things (even if I am a generation or two down on my iThingy), I know enough about marmalade to understand that buying something outright is often a little cheaper than paying on the never never, and just enough self restraint to be able to resist really expensive immediate gratification. So I disappoint them...
"Yeah, because the GPO was such a proactive bastion of forward thinking and cutting edge tech. Oh, wait..."
Funnily enough in 1990 they had a microchip design that could have received and driven 2.4Gbs over 10Km of fibre for $5 and they were pulling the fibre at around £10 for the 10Km.
So your house could have had 2.4Gb fibre installed 25years ago for massively less than the cost of the actual installation.
And what stopped it? Privatisation!
@veti
I believe this relates to the contracts for providing new local loop services in urban areas, which were offered to US cable companies to install coaxial (badly in many areas, requiring lots of remedial work to pavements etc.). This strange decision by Thatcher forced BT to abandon its cheaper and faster fibreoptic service, which was all ready to roll, and would have given us FTTH/P 25 years ago. The argument to go with an additional copper rather than fibre optic local loop was justified on the grounds of "competition". In retrospect it seems a strange competition when the winners were offering a poorer technology at a higher price, especially given that there are other mechanisms for allowing competition over local loop services. Compare and contrast with what other countries were doing at the time with their national telecoms companies.
http://www.techradar.com/news/world-of-tech/how-the-uk-lost-the-broadband-race-in-1990-1224784
Instead it looks like we will end up stuck with some Frankenstein's monster of power hungry technology that will spew ever increasing amounts of hash over the radio spectrum for many years to come (unnotched VDSL, and G.Fast, I'm looking at you).
[quote]
Funnily enough in 1990 they had a microchip design that could have received and driven 2.4Gbs over 10Km of fibre for $5 and they were pulling the fibre at around £10 for the 10Km.
So your house could have had 2.4Gb fibre installed 25years ago for massively less than the cost of the actual installation.
And what stopped it? Privatisation!
[/quote]
I though that Thatcher blocked BT from rolling out Fibre as she wanted to provide some breathing room for the new cable TV networks to get a foot in the door.
With claims like that I think we need to see evidence. Maybe, at a stretch I could believe the whole $5 chip thing even though that feels well ahead of the curve. Pulling in anything over 10km though is going to cost a lot of money, if it was cheap someone would have done it already.
If they won't do it, tax them into the ground and do it for yourself... THIS IS what governments are for, after maintaining a military to keep the peace from abroad and a police force to keep the peace within.
...Cirdan...
(a very confused libertarian)
[edit... Yeah, Zog, ya beat me to it]
Yup, who needs schools, hospitals and other cool stuff :)
I almost agree with you, though. The only problem is that nationally owned infrastructure is generally mismanaged by a committee. I've no idea why, as it should be able to operate as any other large business.
In theory, you could re-nationalise Openreach, apply the charges set by Ofcom for the supply of circuits etc to non-BT ISPs to BT, and just shovel the govmt subsidies into Openreach rather than BT, and BT can then die off as it's a rather poor service provider.
Openreach can then be given the remit to do stuff to get broadband available to everyone without having the conflict of interest tie-in to BT. No doubt some effort will have to be directed at working out what should drive a change to the infrastructure (e.g. coverage of houses, average achieved speed during peak hours, local demand).
Perhaps BT just don't want to have to talk to the Indian call-centre Openreach uses as they know nothing will get done...
"The only problem is that nationally owned infrastructure is generally mismanaged by a committee. I've no idea why"
No incentives to do the job well since most of the boards of nationalised industries were in jobs for life given to them by mates in the government of the time. And this attitude trickled all the way down to the shop floor. Couple that with workers in a monopoly having the country over a barrel if they strike because one of their lazy arsed colleagues got fired or they don't like the colour of the bog rolls, and you have the perfect recipe for an inefficient mess. If you need a current example - the endless problems on London Underground (nationalised transport) with the bolshie RMT union.
Openreach can then be given the remit to do stuff to get broadband available to everyone without having the conflict of interest tie-in to BT.
Sorry; that won't work. Openreach only operates the bits between local exchanges and customers. The main network is, and would have to remain, in BT's hands unless another operator came along and somehow offered a "spine" service that terminated on BT property.
"unless another operator came along and somehow offered a "spine" service that terminated on BT property."
There are other national networks and they can be hooked into in BT exchanges. That's been the case since the days of Mercury. I buy services from KCOM that terminate in BT sites.
Sky has the only LLU kit in my local exchange, and they run / offer the spine service
And have you dug a little deeper and found out who supplies Sky with it's backbone circuits...
Whilst there are several providers of fibre circuits, I think you will find that many operators will still have contracts with BT for secondary circuits and even primary circuits...
I almost agree with you, though. The only problem is that nationally owned infrastructure is generally mismanaged by a committee. I've no idea why, as it should be able to operate as any other large business.
I'll give you a clue. They're called politicians and they don't give you a chance to get the first project done before they have changed the requirements, pulled the funding and generally had a great time destroying what hasn't been built in the first place.
@Bluenose: while that's true, it's not the whole story.
The politicians will change the requirements (etc.) because the requirements issued first time were pants. And everyone knew, back in the day, that they were pants and would need to be redone. But it was in no-one's interest to say so: the politicians would lose face, the contractors would lose money. So they went ahead anyway.
"Getting the first project done" is an exercise in futility, it's aiming to achieve something that is, at best, completely useless. At worst, it's some combination of ruinously expensive, lethally dangerous and hilariously illegal.
Utilities should be publicly owned, run as a business with the government as a silent owner. Profits to be ploughed back into infrastructure investment for the benefit of the tax-payer. I'm sure it will be a difficult balance to achieve, as politicians can't resist meddling, but it has to be more reasonable than the ripoff fest that is the current status quo.
It's a sensible approach but the 'hands off' bit never works.
When BT was publically owned it was starved of investment funds (hence the long delays for phone service) because the government took the revenue - all the revenue - and dispensed it as it saw fit. The postmaster general was given back an 'allowance' by the government to pay his staff and suppliers. BT was a source of income to the government rather than a subsidised entity.
I don't get the rip off bit - UK Internet prices are below the EU average, there's a lot of choice in terms of ISP and the availability of broadband is better than average, though the speeds are below average (but not by a huge amount). That's all detailed here;
http://www.ispreview.co.uk/index.php/2015/10/mixed-uk-results-in-eu-study-of-broadband-speeds-price-and-coverage.html
Some people may wish to read the article at the following site, http://www.techradar.com/news/world-of-tech/how-the-uk-lost-the-broadband-race-in-1990-1224784. Makes for interesting reading and shows once again how the party of business is more about the party of making money for its mates.
As a counter to that suggestion, let me point you to the success story that is the railways under national ownership.
The railways were actually nationalised three times. During WW1, the government took over all the railways and worked them in to the ground and failed to maintain them. Then at the end of WW1, when they were knackered, the government handed them back to the rail companies. Then it hiked wages for workers. Then it fixed ticket prices.
As a result of that section of brilliant actions lines closed and the companies were merged in to the 'Big Four' rail companies. They pretty much got back on their feet and started doing well again by the time WW2 came around, when the government did exactly the same thing - taking them over, running them in to the ground and failing to maintain them properly.
Finally, of course, it nationalised them after the war. It then chose to keep operating steam services when diesel was the way forward. Then it closed down two thirds of the rail network, stripping out the inter-city lines and designing a train network focused entirely on the needs of the capital. British Rail was a byword for incompetence and poor quality. They were still closing down rail lines right up to privatisation. Near where I lived they closed down a line and a set of stations by altering the timetable to ensure there weren't any connecting services, and then saying there 'wasn't any demand'.
This is the nature of nationalised public services. They are uniformly awful. The socialist ideal is fine but when it hits the buffers of reality it all falls apart. Like every socialist ideal.
"This is the nature of nationalised public services"
Have you by any chance ever heard of the Societé Nationale des Chemins de Fer?
The state of Britain's railways is nothing to do with nationalisation per se, and everything to do with the long standing belief of Conservatives that anybody who has to use public transport outside Central London has failed in life. If you make getting around the place too easy, people might be able to find better jobs and provincial cities might develop, providing alternative power centres to London as happens with those appalling Froggies and Krauts, dontcherknow.
The state of Britain's railways is nothing to do with nationalisation per se, and everything to do with the long standing belief of Conservatives that anybody who has to use public transport outside Central London has failed in life
I'll think you'll find the railways were just as shit under labour, if not worse as they were on strike every other week.
"During WW1, the government took over all the railways and worked them in to the ground and failed to maintain them."
"by the time WW2 came around, when the government did exactly the same thing - taking them over, running them in to the ground and failing to maintain them properly."
You may, or may not have a point about government ownership, but you rather shoot yourself in the foot by citing these two examples. There was a reason why a lot of things, not just the railways, fell into disrepair during these periods and it had absolutely nothing to do with government ownership - the guys responsible for doing the work of maintaining things were all busy fighting.
>Then it closed down two thirds of the rail network, stripping out the inter-city lines and designing a train network focused entirely on the needs of the capital.
To correct your history - Beeching was Marples' pet rottweiller. Marples was a (Tory, of course...) minister who made a lot of money from road building.
The whole fiasco was a result of his naked, cynical self-interest.
>British Rail was a byword for incompetence and poor quality.
BR had a brilliant engineering department, which produced the 125 - which is still one of the most popular and comfortable trains today. It also experimented with the APT, and would likely have got it right after another couple of iterations.
But BR was consistently starved of funding. So instead of high speed rail competitive with the French TGV, and proper electrification (planned since the 1960s, but never invested in) BR had to make do with crappy hand-me down trains. And those 125s on a few premium routes.
After privatisation, rail subsidies increased, and fares skyrocketed. But safety went down, so a lot of people died in disastrous accidents (Paddington, etc.)
>This is the nature of nationalised public services
But unlike privatised services, they don't routinely gouge their customers. Or sometimes kill them through negligence.
This is the nature of nationalised public services. They are uniformly awful. The socialist ideal is fine but when it hits the buffers of reality it all falls apart. Like every socialist ideal.
Counter-example: Vienna's public transport system. Fully integrated tram/bus/rail. Cheap. Everything runs on time, regardless of the weather. The tube runs all night and there's a fill-in night bus service that can get you to more or less anywhere on the network at 4am if you don't mind waiting around. They regularly extend the network with major construction projects through densely populated areas and these projects seem to mostly run to time and budget. And it's state owned, using the 'silent owner' approach described above. Like in London, public transport is seen as a strategic asset for economic wellbeing of the city, not something to make a quick buck from.
https://en.wikipedia.org/wiki/Wiener_Linien
I don't know how or why it works, but it does. Heck, it's not even inefficient: 900 million passenger journeys and 8,000 staff compares favourably with TFL's 2.4bn journeys with 28,000 staff!
As a counter to that suggestion, let me point you to the success story that is the railways under national ownership.
Although I'd like to draw your attention to the curious correlation between passenger numbers and ownership ;)
Although I'd like to draw your attention to the curious correlation between passenger numbers and ownership
I suggest you do some more research, the industry experts are clear, there is no correlation between passenger numbers and ownership. However, there is a correlation between passenger numbers and (government) investment in the railways! Basically, without the investment in the network, it wouldn't of been able to support the massive increase in passenger numbers (which started before privatisation). Naturally what confuses things is that the government only made the investment, because it had to if it were to attract private companies to run it...
[Aside: Apologies, there was a piece on this last year, but I've not bookmarked it and hence am unable to supply a URL.]
Utilities should be publicly owned, run as a business with the government as a silent owner.
I'm not sure where you think the governance of an organisation comes from if the government are somehow a "silent owner". In practice it would be run by the management based on what they think best. Do you really think that if the management of a company are accountable essentially to themselves, that will lead to an efficient and effective, customer focused organisation?
I'd have thought there were more than enough utterly ineffective, unaccountable quangos with obscenely over-paid management to give you an answer. Like, in this case, OFCOM.
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