‘Ofcom have bottled it over Openreach’ – Farron



Tim Farron by Paul Walter

Tim Farron has commented over Ofcom’s decision over the future of Openreach:

Ofcom had a chance to make a massive change in the sector and have bottled it. I am now calling on the Government to be bold and bring forward plans to break up Openreach and BT, and inject real competition into internet provision. If they won’t, we will, and I will challenge them to back it. Are they on the the side of entrepreneurship or not?

Most of my constituents count themselves lucky if they can get above 2mbps download speed, and if they are in business that means that they have to cope with upload speeds that are a fraction of that.  How can they hope to compete internationally when countries like South Korea are already rolling out speeds of over 1Gps.

Fast and reliable broadband is a utility and I believe it must be treated as such.

We also need the Government to finally put its money where its mouth is and look at providing real, direct investment that treats broadband provision as the vital piece of national infrastructure it obviously is.

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  • And how do you intend to get fast and reliable broadband into rural areas, unless somebody pays to lay optical fibre, or some other more expensive satellite or radio network based system.

    When the original fibre optic licences were issued, it was understood that it would be economically impossible to fibre every small settlement or house dotted around the countryside, so the licences only required a high percentage but not complete coverage, simply because nobody would have taken up a licence on the basis of 100% coverage.
    As it was most of the original cable companies effectively went bust on the installations, which were mostly rapidly sold off to successive bigger companies which have now generally consolidated into Virgin Media today. It cost £175,000,000 to lay fibre to every house in the urban Tees Valley and the larger dormitory settlements in 1995, some £320,000,000 at today’s prices.

    Asymmetric digital subscriber line (ADSL) is the system that all those left behind use and is based on a pair of copper wires (BT local loop), that have probably been hanging off a pole near to your house for 50 years. Despite the clever electronics at the exchanges this local loop will never have the capacity or realiability of fibre, and the only solution is fibre.

    Who is going to pay for it, certainly not BT or any other private company, so it is down to the government, well good luck with that because the cost would probably end up in the billions.

    As for threatening breaking up OpenReach or BT, might I suggest you shouldn’t threaten unless you have a big stick which you don’t. I would imagine BT and Openreach would be singing from the rafters if somebody removed from them the requirement to pay for the poisoned chalice of marginal telephone and ADSL provision to rural commiunities, which is nothing but a giant money pit for them.

  • Break up Openreach AND BT?

    I have no objection to a change in the provision of updated infrastructure. Perhaps we could be plugging the idea of a mutual, here? Co-owned by all the companies, and (shock horror) HMG (on behalf of the people)?

    But I and millions of others who buy them seem perfectly happy with BT services, and we should not be attacking the company as a whole. It is one of the only companies with the clout to challenge Murdoch’s Sky, e.g. over football rights.

  • Matt (Bristol) 26th Feb '16 - 10:44am

    GP Purnell – I think he meant ‘separate Openreach FROM BT’

  • Eddie Sammon 26th Feb '16 - 10:47am

    I recently switched from BT to Virgin and I prefer BT. The party should be careful it doesn’t go down the Ed Miliband route of thinking breaking up big things is necessarily the best thing to do.

  • Gwyn Williams 26th Feb '16 - 1:35pm

    We must getbehind Tim on this. BT still behaves as the arrogant public sector monopoly it once was. Competition is the answer. The traditional British approach of wait and see and muddling through will leave many areas of the UK behind many countries not just asian tiger economies such as South Korea.

  • Yes Matt, but he didn’t, and so needs to clarify.

  • Gwyn, do you actually know anything about this subject? ‘Few of the world’s whizziest networks were built without state subsidy’ (Economist).

  • I actually agree with the idea of splitting up Openreach and BT. When a service provider also controls the infrastructure upon which the service is provided, they invariably engage in anti-competitive practices. This is why, as a party, we support net neutrality, and would most likely oppose a return to the days where train companies built their own lines.

    The idea of the physical telecoms infrastructure being controlled by a mutual between the government and all of the major telecom service providers (BT, Sky, TalkTalk, and Virgin) has some legs.

  • @ Gwynn William

    “many areas of the UK”

    What you mean is sparsely populated rural areas with not enough subscribers to make it economically feasible to spend the millions required to put the infrastructure in.
    Even if money was spent on getting fibre to the smaller villages across the country, there is not the remotest chance in hell of individual houses, farms, hamlets ever getting it even if the government coughs up the money. You cannot spend £20,000 to £50,000 laying an optical fibre to a hamlet of 4 houses, and then charge them collectively about £1000 a year to use it, and that assumes all 4 will take it, and that there will never be any maintenance issues.
    If you think competition is the answer, who are you suggesting, which company is rich enough or daft enough to do it. I imagine they could do it now if they wanted, nothing stopping SKY asking the government for a licence to build a rural fibre network.

    You should be grateful that BT once was a government monopoly which was presumably obliged to maintain the rural telephone network on privatisation, as I have no doubt they would drop everything outside of towns smaller than 2000 people if they could.

  • @ Sarah Noble
    If Virgin is to be nationalised into a mutual, who will pay the billions of compensation Virgin would expect in payment for their fibre network.
    Why would Sky and Talk Talk wish to become financially involved with the management and maintenance of the existing BT copper pair ADSL network, when they can simply pay BT a fee for each of their subscribers and have the best of both worlds, access to a fully maintained network, with all the donkey work around maintenance and uprgrades the responsibility of BT

  • I wonder if it’s too late to fight this battle. I think the solution for faster broadband to rural communities will be based on 4G wireless, rather than fibre.

  • @ Nick Baird
    ” I think the solution for faster broadband to rural communities will be based on 4G wireless, rather than fibre.”

    That Nick is the only logical solution going forward.
    However the mobile networks as they currently exist also do not offer anywhere near 100% coverage, and are not likely to under the current architecture. When the government replaced the analogue radio network for the emergency services with the digital Airwave network in the early noughties, propagation charts in North Yorkshire suggested a requirement for 99 hilltop masts across the national parks to give county wide coverage. In the end they went initially with 25 and worked on the basis of comms along the road system, using other emergency service vehicles as repeaters to get onto the system if they went out into the boondocks.

    A 4g system might work in East Anglia or Lincolnshire, no chance I would suggest in the knobbly areas of Cumbria or the linear valley’s of the Pennine Dales.

    I would suggest there is no current system that will give anywhere near 100% fast internet, not without spending billions or covering the countryside with masts every few miles.

  • @Raddiy: Sky and TalkTalk are actually in favour of splitting BT and Openreach apart, primarily because of issues regarding Openreach favouring BT’s service provision over theirs.

    There are really only two proper options for genuine competition when it comes to infrastructure: either have one company that deals with infrastructure but must not provide services (e.g. Network Rail); or have each company provide their own infrastructure and services (e.g. pre-grouping rail). The latter provides quicker results, but at a cost of inefficiency as infrastructure gets duplicated.

  • @ Sarah Noble


    I can understand Sky and Talk Talk wanting to remove the inbuilt advantage that BT has, however wanting change to give themselves competitive parity is one thing, putting their hands into their pockets to pay for it is another. Are Sky and Talk Talk wanting to invest and help pay for the maintenance and upgrades of the infrastructure, or do they just want the government to remove the competitive advantage of BT, whilst expecting BT to continue to maintain the system.

    Somehow in political discussions there is an assumption that there will always be a queue of companies waiting to jump into old public sector money pits, well the railways, Royal Mail and our base load electricity generators proves there isn’t, all now completely subject to the whims of disparate companies who are under no obligation to provide what the country, government or politicians want and need.

    I would be confident of the following:

    1. Only the government could provide the billions required to bring hi-speed broadband to rural areas.
    2. Even after spending billions non ADSL broadband will still not be accessible for anybody living in communities of less than a couple of hundred.
    3. Emasculating BT will ensure that BT does not have the financial incentive to upgrade its current systems, resulting in probably a poorer service for many going forward.
    4. Installing and maintaining communication infrastructure is an incredibly expensive and technical business, the government no longer has the technical knowhow in its departments to either understand what is needed, how it would be achieved or more importantly how to maintain it, and from what we are told it doesn’t have the money to invest either.
    BT do a lot more than run telephone and broadband services, for example they installed from scratch, maintain and manage the whole emergency services digital communications network.

    Just be careful what you wish for Sarah, to use an old technical saying, ‘If it’s not broken, don’t fix it’.
    You are not going to get 100% high speed broadband in the rural communities under the current technologies or potentially EVER, whatever fiddling about you do with the current system, you should accept that and stop selling a false prospectus to rural dwellers.

  • Ronald Murray 27th Feb '16 - 12:31pm

    Pleased to agree with everything you have posted. Sadly the political world lacks technical knowledge and often realism. Knocking BT and Openreach the successors to a body which served and generally continues to serve this country well. The Tory obsession of selling all public assets to their pals has put us in this position if BT had not been privatised it would have been possible to expand broadband more but not to every hamlet using public money. As has been said why should they to let cherry picking multinationals get the benefit.

    I spent twenty years in private telecomms and twenty two years with BT. As a qualified telecommunications engineer. I am also a member of the IET.

  • This discussion simply demonstrates how useless private companies are at providing high quality utilities to all. I have a full fibre connection (currently rated at 200Mb) which was installed over 20 years ago by Nynex (now Virgin), but of course they only provide this kind of service in cost-effective towns and cities. It’s ludicrous that most people are still connected by copper.

  • @ Ronald Murray.

    i have a similar background predominately in radio, rather than fixed comms, until recent years when I have been heavily involved in digital networks, although I have never worked for BT, I understand their importance across a whole range of areas unknown to the public.

    The system has gone to hell in a handbasket since the government sold off the old Home Office Communications to NTL in the early 1990’s, with hundreds of years of technical expertise sold off for a pittance.
    Since then we have had a succession infrastructure projects that have been politician led incompetent overbudget disasters, with politicians paying compliant private consultants to overpromise on system viabilities

    This whole debate on rural broadband is a perfect example of naive hope and expectation, triumphing over technical feasibility. I despair sometimes!

  • I had to double check that Tim wasn’t one of the 121 MPs who put their names to the ill-informed “Broadbad” report from the recently formed British Infrastructure Group (BIG), which was setup by Grant Shapps (Conservative MP for Welwyn Hatfield)…

    I also had to check that he had in fact been an MP since 2005 – so was an MP and member of the Coalition when the BDUK project was debated and objective set, specifically:

    to provide everyone in the UK with access to broadband with a download speed of at least 2Mbps (megabits per second); and to bring ‘superfast broadband’ (at least 24Mbps) to 90% of UK homes and businesses. with a target completion date of 2017…

    If he had been paying attention, he would have known that the government did consider setting a higher target of delivering fibre-to-the-premises/home (FTTP/FTTH), until it was presented with the costs and timescales and decided that it could only afford to subsidise a fibre-to-the-cabinet (FTTC) deployment that would support a future FTTP deployment.

    But just to provide an update on just how expensive in time and money a FTTP deployment is, I refer people to the article: http://www.thinkbroadband.com/news/7363-can-the-uk-afford-2-6-billion-a-year-on-ftth-roll-out.html

    Yes Ofcom have bottled it, but not in the way Tim and others think!
    As the regulator, Ofcom have to option to both determine the price BT charges for broadband, but also to set a levy on top of those charges to provide a discrete revenue stream to fund infrastructure maintenance and upgrade. So Ofcom have bottled it, as they have by their actions provided no incentive for Sky, TalkTalk, Vodafone etc. to start doing business with Virgin, nor provided any real means for BT Openreach to create ring-fenced pots of money for network enhancement.

    It is sobering to realise that without government obsession with privatisation and trying to create competition where none effectively existed, we could now be enjoying the fruits of BT’s unhindered investment in fibre…

  • I have been battling for nearly a year because Openreach refuse to renew a copper cable serving our house and immediate neighbours, despite the fact that at least four of their engineers have said independently that this is what needs to be done. It seems that this is not an isolated problem, but part of an organised abuse by Openreach of their monopoly position, which Ofcom are not getting to grips with. I notice that a recent LSE article says “Openreach engineers speak of joints decayed by water and limescale, and problems being ignored in the interest of meeting artificially-set regulatory targets. They speak of management by numbers, whilst street cabinets are left in disrepair. If this is correct, then it signals an investment issue.”

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