BT criticised for potential monopoly on fibre optic broadband:
With BT rolling out its super-fast up fibre optic to the cabinet (FTTC) to many parts of the UK, it appears that not all of the UK’s broadband operators are happy with this move which sees potential subsidy from government as incentive to provide the improved service to UK residents.
TalkTalk boss David Goldie has said in an interview in the Observer on Sunday that BT is looking to regain its former dominance and warned that the methods they are using could leave the UK with a sub standard broadband infrastructure.
David Goldie says:
“At all times BT is thinking about how it can recover the monopoly position that it lost many years ago, I don’t think that is going to represent good value for the British taxpayer.”
Where were TalkTalk at the start of these improvements though?
Many observers are warning that BT could indeed have a monopoly on fibre optic broadband in rural areas if the UK government goes ahead with support for it’s proposals.
Now while this may sound bad for the consumer, it has to be said that when BT asked operators if they wanted to join forces in providing fibre to the cabinet, they all said no. And from what I can gather no real alternatives were proposed by their competitors.
So BT have (apparently) given their competitors the chance to go into partnership prior to this construction phase, though I doubt any of these companies would have been keen to start such a large construction project without BT.
So surely, had nothing happened without BT doing the work, this would have left UK consumers worse off despite David Goldie sounding off in such a manner?
Back in 2010 BT had stated that it was going to invest some £2.5 billion in providing fibre to some 2/3’s of UK homes by the year 2015. With government subsidies for pushing this out to rural communities, BT is also applying for a further £360 million to help deliver this promise and increase its penetration of fibre to rural homes.
Now I dislike BT with a passion most of the time for their inflexibility as a company, but I do not hear Fujitsu or TalkTalk or Sky or o2 putting so much money into the UK’s broadband infrastructure (currently) to improve things for consumers as BT are doing. So forgive me if I have missed a point here but I am glad that BT are getting somewhere, it is about time. Our broadband speeds in the UK are average at best and need to improve.
Fujitsu will challenge BT in providing fibre to the cabinet
It does however appear that TalkTalk and Virgin are prepared to talk with Fujitsu, who put a proposal together last April to build super-fast fibre optic broadband infrastructure within the UK, but it appears that they were only prepared to speak with Fujitsu in order to minimise BT’s monopolistic tendencies.
BT need to reduce charges to access their network:
In order for Fujitsu to successfully enter the marketplace in providing fibre to the UK, Fujitsu rely on BT reducing the costs associated with accessing their own telephone poles and ducting needed to gain access to fibre optic cabling at the cabinet. A group of ISP’s had stated in a letter to Ed Vaizey the communications minister and BT CEO Ian Livingstone earlier this year that prices needed to come down in order to promote healthy competition in the marketplace that benefits consumers.
BT have said in response:
“It is highly ironic that we are being criticised by some companies who provide little or no wholesale access to their assets,”
BT went on to say that duct access costs were comparable to equivalent European charges.
CEO of BT Openreach Olivia Garfield, has responded to the claims laid out by TalkTalk CEO saying that BT has always provided access to its fibre network from the very beggining.
“This allows other operators to piggyback off our investment, while encouraging competition and the take-up of fibre services to thrive. We’ve also volunteered to provide additional forms of wholesale access via our ducts and poles. We expect to announce revised pricing for such access shortly.”
Regulation may help the issue:
Ofcom CEO Ed Richards has said that BT are due to release revised pricing for accessing their networked services by September but he feels likely that BT will not reduce these charges significantly and therefore regulation may be needed in order to improve competition and lower costs to the consumer without stultifying progress of the fibre optic infrastructure and construction programs.
Fibre to the cabinet not the right approach:
With the current program only bringing fibre to the cabinet (FTTC) some say that BT have not gone far enough to push fibre optic to the home (FTTH) as consumers will still have to obtain their broadband on copper cables for that “final mile” with the inherent loss in data transfer/speeds associated with copper compared to fibre optic.
I am unsure as this is such a bad thing when you see how quickly things are changing in the mobile world. Will we still need a wire at all in the not too distant future?
I for one have been running my home broadband on a tethered mobile phone at speeds faster than my new BT broadband connection perfectly fine till I ran out of data….maybe BT know something we do not, especially as 4G is soon due to be available globally.
Anthony Munns