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Tuesday, 15 July 2008

BT announce up to 10M homes to get NGA by 2012

BT has today announced it will spend 1.5billion pounds to connect 10million homes with NGA by 2012.
Using a combination of FTTC and FTTP, BT will work with local and regional bodies to decide exactly where and when this will occur. BT have asked Ofcom to give regulatory certainty.

Press BT press release here

It is impossible not to comment on this announcement!

Firstly, the sums. There are known to be about 25million homes and premises in the UK. This 1.5Bn quid (sorry, no pound sign on this eeepc!) for (note the up to!) 10M homes implies the 5Bn figure quoted at BSG conference is closer to the mark than the 16Bn. Although, it could mean a far higher proportion of FTTC than FTTH. One wonders though whether it also implies an urban/semi-urban 'cherry picking exercise' as one would expect the figure to be higher if many rural properties were being connected. Much of the middle mile is already fibred, even in rural areas, so how much of this is actually copper replacement? (market value of copper removed will offset some of the opex of this exercise!)

Looking at the working with local and regional bodies to decide where to connect, one hopes against hope that the RDAs etc have been taking note of work such as the Notspot survey, BBC website broadband map, and the growing frustration of rural businesses and citizens to get anything approaching first generation broadband still, particularly when it is so apparent from figures that the rural economy is a) in decline but b) has the potential to deliver the goods as it were into UK plc's economy if supported and able to communicate. (This was clearly given in evidence at a government select committee review in the Yorkshire Dales recently, and undoubtedly in many other places).

One also wonders whether this 'partnership' in deciding when and where will include, as it did the first time round with ADSL, polite requests (ROFL) from BT for interventions, match funding, contributions etc from these agencies/councils etc, which is of course government money. If it doesn't, then you can almost guarantee it will be a cherry picking exercise, and not necessarily picking the ripest cherries from a consumer/UK Plc viewpoint.

I stand by my long-held view that demand for FTTH is highest in rural areas, and until proved wrong by a rural FTTH pilot, will continue to do so.

Regulatory certainty undoubtedly implies lengthy discussions about sub-loop unbundling, which BT have always been unwilling to play ball with, citing lack of space in cabinets as the most frequent excuse, as well as price certainty if they are required to open up their network. Although they have SMP, one wonders about this figure of 10M as they could then say that Virgin must do likewise (Perhaps?)

The cynic in me says that this announcement has been made to delay others from investing; that far too many politicians etc will once again see an announcement by BT as meaning 'job done, end of problem'; and that many consumers will assume that if BT are on the case they will soon have super dooper fast broadband equivalent to that in Hong Kong, Korea etc. Ebbsfleet (bursts of up to 100Mbps down and 2Mbps up) and previous experience with BT's broadband announcements, will no doubt lead many of us to believe otherwise.

One awaits with interest the answers to the following questions:
1) What percentage of FTTC to FTTH is proposed? Just Ebbsfleet and Olympic Village as FTTH?
2) Which regions - 1.5Bn would equate to just over 100M quid in each of the RDA regions plus Scotland and Wales. That is not much, considering cost somewhere in the region of a third of that and has connected 75 users with 2Mbps wireless!!
3) Who else is going to invest regardless of this announcement?
4) Will Ofcom insist on sub-loop unbundling where FTTC takes place?
5) Will Ofcom control the prices so that we finally see a paradigm shift? And will it be on the side of the consumer (refer to Ofcom's statutory duties) or on the side of BT (refer to Ed Richards' recent announcement about telco risk)
6) How will RDAs etc assess the need/demand within regions to decide where BT should be deploying? And ensure that they engage all stakeholders in the decisions?
7) If interventions are made with public money to ensure that BT go into 'unviable' areas (rather than cherry picking urban areas), will these pots of money be up for public tender as per EU State Aid rules?
8) And finally, will BT do infill where Virgin have no cable, or will they be overlaying that network to offer choice to consumers? (Is this BT's attempt to reach the 80% coverage in tandem with Virgin - are we going to be left with 2 major ISPs, and a few 'boutique' ISPs?) In either case, by 2012, what percentage of the UK population will have access to NGA/FTTH, and choice of supplier? The sooner we know the answer to this, the sooner everyone can start laying fibre in the missing areas, and pushing for appropriate regulation so consumers have a choice, not a duoply.

Oh, and one final comment: "BT already provides fibre to the premises of more than 120,000 businesses,..." that will be ISDN then. How bloody misleading is that?! And ADSL 2+ is NOT next generation broadband, it is first generation broadband, but they are deciding to re-label it to suit them........again.....argggg.


Clayton said...

Just to pick a minor point, sub-loop unbundling already exists at every cabinet in the UK and per the regulatory agreement BT signed, will continue to be available. Anyone can buy this today and Openreach has sold exactly zero sub-loops. Its a completely moot point.

planetf1 said...

I expect there's a lot of housing estates around on the edges of towns, with lines in the 4-6km range.

Fairly densely populated, not currently getting good speeds. Distance from cab to premises is probably still small so FTTC would be fast.

ideal market? Hope so. I live on one.