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Openreach reshuffles top brass, brings in BT bods to make biz more independent of BT

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Screw BT

Who cares what they do any more.

Three price increases in less than two years to pay premiership footballers wages. It's all gone wrong.

And an insider tells me this time they are not allowed to negotiate as their computer system won't let retentions override preset prices.

Ah well BT, prepare for an exodus of people mid-contract. It's your own funeral.

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Meh

Re: Screw BT

This article is about openreach, not the retail division. Very little of your post applies.

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Re: Screw BT

"This article is about openreach, not the retail division. Very little of your post applies."

So when your home broadband packs up, and your ISP tries all it can, what happens then? "Yeah we'll send an Openreach engineer to the exchange to look at the problem".

Original post is totally relevant.

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Re: Screw BT

"Original post is totally relevant."

Nope. The original post makes 3 points.

Price rises for BT Broadband/TV/Phone packages - not relevant the article is about BT Openreach the infrastructure division and the provision of said infrastructure, not BT Broadband the retail ISP. These price rises do not affect Openreach or customers of other ISPs provisioned through Openreach.

The retentions team at BT Broadband the retail ISP not being able to override pricing - not relevant for the same reason.

Speculation that because of the price rises customers will leave BT Broadband the retail ISP for another retail ISP - not relevant for the same reason, you can leave BT Broadband for whoever you like but unless it's Virgin Media you'll still be provisioned through some part of BT Openreach's infrastructure to a greater or lesser extent.

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I think they're preparing to do what I suggested in an earlier post. Float off Retail. Float off or close all the non-comms stuff they've been trying to do ('cause it doesn't fall under OfCom) and failing at for the last couple of decades or so. Then all that's left is Openreach and that then is BT.

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I have never understood why national infrastructure such as telephone are not owned by the state. Then they can quite happily allow providers to each sell service to users and pay an appropriate amount for the infrastructure access.

Having the incumbent run the infrastructure as well as selling their own stuff was always going to be a problem.

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"I have never understood why national infrastructure such as telephone are not owned by the state."

It used to be. After serious under-investment by many successive governments it was privatised so that it would be able to use private sector money to catch up. Now do you understand?

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Corrected your post for you...

It used to be. After serious under-investment by many successive governments it was privatised so that it would be able to make private sector money. Now do you understand?

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BT and other infrastructure *was* national. However, thanks to @10 years of union strikes, successive weak governments and withdrawl of investment, the country was left almost bankrupt. In stepped Mrs Thatcher who had to turn all that around and she opted to sell what she could, such as rail, BT, gas and electricity. She did, however, retain a majority share in these companies that successive governments then sold until the companies are, essentially, private.

People can decide for themselves if the move was right or wrong.

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re: BT and other infrastructure *was* national.

BT was making a good profit for the country. In fact just after privatisation they made £400 million for the new shareholders by changing accounting practices!

As someone who was working on microchips at the time that BT and openreach would give their right arms for NOW but were ditched because they were spending more on new contract accountants in our department than they were on research and something had to give I can safely say that BT and Thatcher pissed in their chips

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"I have never understood why national infrastructure such as telephone are not owned by the state."

Because the state is pretty crap at running things so privatisation brings some benefit. The other major reason was the terribly clever stealth tax wheeze of selling to a subset of people what all the people already owned.

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MrT
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Efficiency...

If Openreach sent the right person for the job each time, they'd get most things done in one visit. Instead, since many of their experienced engineers have left, it always seems to take at least three visits over several months to get even basic BT line connection work done. Sorting that would save money and boost customer confidence.

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Boffin

Chairman reporting

FTA: "But Ofcom said the changes fell short. The main point of contention is that BT wants Mike McTighe ["independent" Openreach Chairman] to report to BT chairman Mike Rake, whereas Ofcom wants the reporting to be separate.®"

Exactly who should the Openreach chairman report to if not the Chairman of the parent group (i.e. BT Group)?

If BT Group wanted the Openreach Chairman to report to BT Group CEO (Gavin Patterson) then, yes, that isn't going to pass muster as "fully separate" but reporting to the group Chairman or the Group board (led by the Group chairman) does make at least some sense (even if you don't agree with it). Who would the Openreach Chairman report to otherwise? Above the Chairman/Board is direct to Shareholders but they're shareholders in BT Group plc not Openreach Ltd; and that's when the Structural separation looks more like a fudge than a workable solution to the problem (workable in that it achieves the most separation with the least grounds for legal challenge - note IANAL.).

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Anonymous Coward

Bottom Line...

How long does it take to make an actual decision.

We have every other Country moving ahead with its FTTP plans, yet we're stuck in a quandary, unable to move forward. Just separate Openreach off, other Telecom companies will fill the initial void, working with the new separate Openreach.

If BT Group want to argue it in court, let them waste their time doing so. They'll win no favours with the public doing so, consumers want to see progress, not rigged markets.

Having an Openreach Board makeup favoured by Ofcom is irrelevant, Board members can be changed just as easily again "post decision" if Ofcom decided to back down, regards Openreach. It's just more trickery by BT, that needs to be ignored by Ofcom.

The real point here, it's feeling like a quagmire with no way out, no progress.

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Re: Bottom Line...

Just separate Openreach off, other Telecom companies will fill the initial void, working with the new separate Openreach.

"Just"? However Ofcom might wish it to be so I very much doubt if it would be that easy. Like it or not BT has shareholders (with many shares being held by pension funds) and simply hacking Openreach away from its parent would probably have a catastrophic effect.

"Other Telecom companies will fill the initial void". Which "void" would that be, then? Which companies are likely to turn up wanting to compete on the "major network" side of the business, and likewise which companies are going to want to try to become major competitors for rolling out local networks?

Virgin aren't exactly rushing to expand their network which covers both disciplines. I look forward to someone (AC or otherwise) submitting a list on this forum setting out all the companies that are likely to step into the breach.

Having said that BT does seem determined not to even try to cooperate with Ofcom, and it is hard to avoid concluding that corporate foot - dragging is more likely to have negative outcomes than positive ones. At the same time I do wonder if an impasse of this sort is almost inevitable when an organisation that is a plc finds itself having to operate in a market that is controlled by a regulator. IMHO the two concepts (shareholder ownership and a regulator with different goals) are more or less basically incompatible.

I also wonder if a man whose background is in shampoo and a failed cable operator is really the right person for the top job.

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Re: Bottom Line...

"If BT Group want to argue it in court, let them waste their time doing so. "

Or just follow New Zealand's example and make all further broadband funding contingent on full separation.

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Anonymous Coward

Re: Bottom Line...

It's pretty much a given, there is no direct Government funding "handouts" for G.fast, UK Gov have seen through it.

Research is also scaling back in this area regards BT. BT have realised that cramming data into a minimal number of Fibre Optic cables/signals is far more beneficial, going forward. G.fast, badly deployed (esp. urban industrial locations), is a "can of worms" to fault find.

And why would they, rollout of G.fast only benefits existing customers currently receiving BT's top tier "upto" FTTC speeds, it's not an "inclusive technology", its a very selective one - so doesn't deserve funding.

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Anonymous Coward

Re: Bottom Line...

G.Fast looks to me like a technology being deployed to counter the competitive threat from Virgin's top tier services. BT needs those urban customers because they provide the income and subsidy for rural customers. If the urban customers leave for Virgin, the chances of rural people getting better broadband at a reasonable price drop to about zero.

It seems like a sensible logical response to what's happening in the market, not just here but globally. There are people who want faster broadband who can't or won't pay the 2000 Euros or so that an FTTP connection averages out at. Switzerland and South Korea are deploying G.Fast now to fill in the gaps that couldn't be affordably reached during their FTTP rollouts.

I don't think it will ever be a rural coverage technology so I don't know why BT would be asking the government for subsidy to roll it out. It solves a different problem. XG-Fast might well be a rural solution, but I don't think that's left the gold labs yet. (Gold is the project run by some universities and Ericcson and Alcatel to research better copper access).

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Re: Bottom Line...

" simply hacking Openreach away from its parent would probably have a catastrophic effect."

Perhaps for BT. But riddle me this: If Openreach is _so_ expensive and has _so_ many liabilities and is losing _so_ much money, why is BT trying desperately to hang onto it?

The effect of splitting in New Zealand was electrifying. Their version of Openreach went into high gear when the split happened and hasn't slowed down since. Almost all(*) customers are happy at paying 1/2 to 1/3 the rates they were previously forced to.

The incumbent telco isn't looking so rosy though. It advanced the exact same arguments and costs against splitting that BT has been using - including the claim that an independent openreach would have trouble raising financing.

Not long after the split, NZ Openreach (chorus) got lots of financing, whilst the former incumbent had its credit rating slide substantially. It seems that plant in the ground and hundreds of telcos as your customer is a better credit risk than being one of those hundreds of telcos (especially when customers are leaving like a plague of rats deserting a sinking ship. Most people stay with BT because they're the lines company. Once that goes away they're more inclined to move)

(*) The exception to the happy clients list being the former incumbent - which despite the line charge figures being set based on information it passed to the regulator about costs, etc. claimed that the charges were far too high, they couldn't possibly make money and they demanded a special deal.

Everyone laughed at them and the damands weregiven short shrift. That little tantrum demonstrated what everyone else already knew - that the outrageous costs they claimed were involved in running the lineside operation were made up figures to cross-subsidise the other divisions.

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Facepalm

Openreach group strategy propositions

There was a story on the wireless today about the employment conditions of plumbers working for a Pimlico company. As in the plumbers had to provide their own transport, uniform and tools and presumably there was only the one full time plumber. Make one wonder about the shape of the Openreach employee org chart. As in how many engineers do they employ full time in the field as compared to those working in a warm office. I do know it's a bad sign when you can't figure out from someones title exactly what they do to draw their salary.

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Anonymous Coward

The whole idea of opening up the Telecomms market was a bit like letting another rail company come along to a formerly nationalised British Rail and saying:- "We're going to hitch three coaches on to the back of every one of your trains that run on the most profitable routes, and we'll ignore the rest. Then we'll undercut the prices that you charge on these very profitable routes."

The fact that British Rail have spent decades using taxpayers money to build the railways and maintain everything from track to stations and locomotives, just doesn't bother the new company. Their only mission is to make a profit on the back of British Rail.

This is exactly the case with BT. They have developed everything from day one and were the first to come up with fibre optics and broadband. Yet apart from Virgin Media, all these other companies just 'hitch their coaches' on to BT's coat tails and reap the profits. No engineering staff, no development costs, nothing in fact apart from a few staff in call centres who are useless if a fault occurs.

The whole idea should be scrapped and everything given back to BT as a non profit making company. The shareholders should be paid off and Ofcom would regulate BT regarding any excessive staff numbers, prices, and staff salaries.

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