The assumption that it's "just a pair of copper wires" is about 80 years out of date. The "line" is your part of the whole infrastructure, cabinets, exchanges, fibre, cables, all the physical parts that make up the network. It's not cheap to install (have you any idea what it costs to dig up a street and make it good?) or to maintain. I'm sure the equipment used for testing and maintaining it has become much more sophisticated than it was when my colleagues were designing it, I'm also certain that it hasn't become any cheaper or less sophisticated!
Over the last decade, BT alone will have raked in £10-20bn or more from line rental. The estimate for providing fibre connections for all of the UK was estimated at £30bn not too long ago, so I'm not at all convinced by your assertions that the level of line rental is justified.
But you are half right about the diagnostic hardware and software. It helped BT cut its maintenance costs by 4-5% in the year to April 2013. Did your line rental go down as a result? Mine didn't. If BKM is right and Wholesale Line Rental (WLR) hovers at under £10, we are being ripped off on line rental.
Sky rent space for their OWN equipment in BT's Exchange premises and connect this equipment via the own fibre LLU Network to their own network control centre.
Just HOW is this "using BT equipment"????????
All they use of OpenReach is the "bare wires" as I explained.
Slight correction, they rent the backhaul fibre from BT as well to connect to their own network control centre. They don't own any actual fibre other than the small EasyNet fibre network they bought years ago. But I'm going off topic.
You obviously have no idea of the setup inside a BT exchange, yes Sky have a few pieces of equipment in the exchange but within the exchange there is a tonne of BT's wiring and test equipment that connects it to the outside network. All of it is maintained by Openreach, in fact they even work on Sky's equipment in there. Line rental goes towards all of this stuff!
I don't know where to begin with your comments about the outside network, do you work for Sky or something? If you think a 50+ year old copper underground network doesn't need a lot of maintenance you're living on another planet! Especially in a wet country like the UK, trust me.
BT's annual report (2013) states that it has around 9.9m consumer fixed lines - it's unclear if they include Plusnet customers in that number. It says around 9.7m are active, in that customers take a phone or broadband service or both. Take an average line rental (saver at £159.84 a year and non-saver at £15.99 a month or £191.88 a year) - £175.86 a year. BT alone rakes in £1.7bn in line rental income from its 9.7m active fixed lines.
BT offers Wholesale Line Rental (WLR) so other ISPs can offer own-brand products which are, in reality, all run and maintained by BT. What does WLR amount to? It doesn't say in BT's annual report, but do you think it is anywhere even close to £15.99 a month? So what are the real costs? How many 3rd party/CP lines does BT look after? Another 3-5-7-9m lines and how much of the line rental imposed will BT get a large slice of? How much do 3rd party companies keep if they are not actually having to maintain the lines or exchanges themselves?
Show me where BT spends £2bn+ a year on the maintenance of its UK exchanges and self-funded improvements to the UK network. The taxpayer is still paying for too much of what BT does. Not too long ago, it had the gall to go cap in hand to UK Gov for £2bn to help pay for a network overhaul. A sign of a well-run company where line rental income is properly used? I don't think so. .
You're using the retail price list of line rental, I think the OR gets under £100/year. So suddenly your £1.7bn is less that £1bn. You also have to consider that OR have something like 25,000 technicians, lets say £40k to keep one on the road. Now you have a £1 bn labour cost before you've even started.
Here's some more 'anecdotal evidence' for you:
I lived and worked in a major city in Spain for some time and have friends who still do.
Like SteveMcK, we relied on an ADSL system, with a maximum download speed of 2mp and upload speed of 250k on a very good day. And most days (and particularly evenings) were far from good. Visiting recently, I found that nothing had changed, in fact it was worse.
I have an old Kindle 3g, and most evenings it was quicker to view my emails on that rather than wait for 'gmail classic view' to finally load on my laptop.
Movistar (Telefonica, AKA BT) own the whole phone network and lease line space to smaller companies (who then, of course claim to offer higher speeds and cheaper deals, which cannot possibly work).
So no. If a major city in Spain struggles with internet connections, I would say they are not ahead of the UK.
A totally anecdotal and small sample size of one, but a friend of mine in rural France gets 2Mbps on their ADSL on a good day. I am similarly rural in the UK, and I get 71Mbps on a good day (thanks to some public funding, although BT are still contributing the majority of the money).
The only odd and irritating thing is BT's seemingly arbitrary deployment plan. I have FTTC, but a nearby road has FTTP. Both have overhead wiring, both are not new build areas, there's an existing copper cabinet so it's not a case of the lines going direct to the exchange. I don't see the difference. If anything, my road would benefit more, as it's quite long and people at the other end of it will be getting piss poor FTTC speeds (the cabinet is where the road starts). As far as I can tell it's the only road in the village that has it.
How perculiar - I thought that France had much better rural broadband than we do?
Ofcoms Proposed Charge Controls Fully unbundled lines (MPF) The regulated wholesale price for this service today is £84.26 per year. Under Ofcom’s proposals this will fall in real terms by between CPI − 0% and CPI − 6% every year; Shared unbundled lines (SMPF) The regulated wholesale price today is £9.75 per year. Under Ofcom’s proposals this will fall in real terms by between CPI − 8% and CPI − 12% every year; Wholesale line rental (WLR) The regulated wholesale price today is £93.27 per year. Under Ofcom’s proposals this will fall in real terms by between CPI − 2% and CPI − 8% every year.
In a nut shell, it is the providers who are forcing the costs to go whilst they keep the headline price of broadband low. Openreach has been dropping prices on the above for the last 5 years or so.
When BT, Sky, Talktalk et al increase their prices it isn't down to Openreach, they are justing being greedy sods!
How perculiar - I thought that France had much better rural broadband than we do?
Every country is limited by the same laws of physics. Ifyou live 4km away from the nearest exchange, and your phone lines are old and hooked onto poles, you're going to struggle to do better than 2Mbit/s, no matter what country you're in.
France has a slight advantage in that there's a much higher level of apartment-living rather than individual houses, even in rural areas. That can make it worthwhile for France Telecom/Orange to run a fibre to a group of apartment blocks, where it wouldn't be economic to run it to a road of scattered independent homes.
Even so, UK penetration for "superfast" broadband (30Mbit/s or over) by end-2013 is roughly on a par with Spain and Germany, and approx 3x that of France (70% compared to 25%), going by EU figures. The UK is also cheaper than France for bundled service (broadband + voice).
Most of the major western euroepan countries are roughly on a par, smaller one slike Belgium tend to be slightly ahead because it's logistically easier to supply service over a small area. The ex eastern-bloc countries tend to come in well behind the others, but are catching up.
In a nut shell, it is the providers who are forcing the costs to go whilst they keep the headline price of broadband low. Openreach has been dropping prices on the above for the last 5 years or so.
When BT, Sky, Talktalk et al increase their prices it isn't down to Openreach, they are justing being greedy sods!
Not quite: Openreach is part of BT and was forced to lower its prices by Ofcom:
'These new prices will come into effect on 1 April 2012.'
So, ISPs offering a phone and broadband service are charged £87.41 a year. That's £7.28 a month, with prices set to decrease by 5.9 % under RPI (inflation). That appears to be a truer reflection of the cost of looking after the maintenance of BT's fixed line network.
£7.28!
BT charges almost £16 a month in line rental. Some ISPs charge over £17. Those are mark-ups of 120%-135%. Perhaps Steve McK et at could tell us all again how this isn't a rip off, how line rental is a fair charge and most of it isn't pure profit.
I fear you don't know what "anecdotal" means. I've lived in France for 20+ years. It's not anecdotal, it's personal experience.
Err...it appears to be you who has not the slightest clue what 'anecdotal evidence' means. It is evidence based on personal experience. A very small sample, which, in this case, is just you. It's usually evidence which is neither true nor reliable. Perhaps you should have looked it up before stabbing out a response at your keyboard.
But, hey, don't let that stop you trotting out the patronising and bizarre assumption that anyone who does not share your view on this matter is being 'taken in' by the Murdoch press.
A totally anecdotal and small sample size of one, but a friend of mine in rural France gets 2Mbps on their ADSL on a good day.
Wow, a whole 2mbps, well at least that allows them to do a bit of light streaming. In our village we get 1mbps on a good day, however most of the time its more like 512k, and we haven't really advanced since 2001. In addition to that we also get random disconnects, usually at least one every 15 to 20 minutes.
Given 512k - 1 mbps speeds from BT or 10mbps from Three you can probably guess which is the most popular option for internet connection locally, I also suspect that many of those who constantly vent about people using 3G / 4G as a substitute for ADSL / Fibre would be the first to do exactly the same if the ONLY option on offer to them was 0.5mbps and regular disconnects. No smoke and mirrors, no pack drill.
Its also a bit of a misnomer that everybody who uses 3G already as a home broadband substitute is a heavy user and must consume 100gb of data. I do exactly that and over the past few years I have never used more than 20gb in a month, with my average tending to run around 8gb to 12gb.
I've no idea why anybody would want to go to the effort of tethering from a phone 24/7, if there was a lovely 76mbps fibre cabinet in the street, bring one to this area and I will be the first to sign up, but that is a service which is unlikely to ever happen in my lifetime, 4mbps, for that matter at the moment, is looking equally unlikely.
Rural areas, the kind which will never get a decent ADSL connection but are already within a non congested 3G / 4G coverage area are the ones crying out for this kind of alternative service, however as usual its London and the other Cities which get it first
You're using the retail price list of line rental, I think the OR gets under £100/year. So suddenly your £1.7bn is less that £1bn. You also have to consider that OR have something like 25,000 technicians, lets say £40k to keep one on the road. Now you have a £1 bn labour cost before you've even started.
My figures were way off. According to ispreview, BT looks after 17.6m fixed lines.So, if £7.28 a month is a true reflection of what it costs to maintain a fixed line, it generates around £3bn a year to look after the 34-35m fixed lines across the UK. I have no problem with that.
I do have a problem with the fact that with line rental charges ramped up by 120-130%, £10bn-£11bn can be generated in revenues. Where do we think the other £7bn-8bn goes? On call centres? Plugging pension pot black holes? Rewarding shareholders? Other costs? All of which should be funded only by whatever profit can be made from the service offered, not the standing charge/s imposed.
It should be very easy for all ISPs to factor that £7.28 a month core cost into an all-in price for their various packages. That would make comparison much easier. But fair and open competition is not in any ISP's interest. They are quite happy to keep what parts of the old nationalised service model most suits them.
My figures were way off. According to ispreview, BT looks after 17.6m fixed lines.So, if £7.28 a month is a true reflection of what it costs to maintain a fixed line, it generates around £3bn a year to look after the 34-35m fixed lines across the UK. I have no problem with that.
I do have a problem with the fact that with line rental charges ramped up by 120-130%, £10bn-£11bn can be generated in revenues. Where do we think the other £7bn-8bn goes? On call centres? Plugging pension pot black holes? Rewarding shareholders? Other costs? All of which should be funded only by whatever profit can be made from the service offered, not the standing charge/s imposed.
It should be very easy for all ISPs to factor that £7.28 a month core cost into an all-in price for their various packages. That would make comparison much easier. But fair and open competition is not in any ISP's interest. They are quite happy to keep what parts of the old nationalised service model most suits them.
What the retailers charges on top of the wholesale price is their operating cost, profit and VAT. Its the same reason a £5 bottle of wine costs £20 in a restaurant.
What the retailers charges on top of the wholesale price is their operating cost, profit and VAT. Its the same reason a £5 bottle of wine costs £20 in a restaurant.
That is not what line rental is supposed to be there for. It's a hangover from the days of nationalisation. It is kept as a separate charge for a reason. It is there to reflect the cost of putting in place and maintaining the pyhsical network or delivery system - nothing else. Profit is supposed to be made on the service provided.
All standing charges are a nonsense. They enable sleight-of-hand when offering headline prices and that distorts competition because it's very hard to tell which company offers best value.
Every country is limited by the same laws of physics. Ifyou live 4km away from the nearest exchange, and your phone lines are old and hooked onto poles, you're going to struggle to do better than 2Mbit/s, no matter what country you're in.
France has a slight advantage in that there's a much higher level of apartment-living rather than individual houses, even in rural areas. That can make it worthwhile for France Telecom/Orange to run a fibre to a group of apartment blocks, where it wouldn't be economic to run it to a road of scattered independent homes.
Even so, UK penetration for "superfast" broadband (30Mbit/s or over) by end-2013 is roughly on a par with Spain and Germany, and approx 3x that of France (70% compared to 25%), going by EU figures. The UK is also cheaper than France for bundled service (broadband + voice).
Most of the major western euroepan countries are roughly on a par, smaller one slike Belgium tend to be slightly ahead because it's logistically easier to supply service over a small area. The ex eastern-bloc countries tend to come in well behind the others, but are catching up.
I don't think anybody could have worded that explanation better.
I thought that the ex-eastern-bloc countries were the most ahead in Europe due to the fact that they never really had much of an infrastructure to begin with, then when they did, they were able to leap ahead by moving directly from little or no infrastructure to FTTH/FTTP?
Sometimes I despair of DS threads - hoping to read about the new Relish service but get two pages of tennis about Openreach and the UK fixed line internet infrastructure :-(
That is not what line rental is supposed to be there for. It's a hangover from the days of nationalisation. It is kept as a separate charge for a reason. It is there to reflect the cost of putting in place and maintaining the pyhsical network or delivery system - nothing else. Profit is supposed to be made on the service provided.
All standing charges are a nonsense. They enable sleight-of-hand when offering headline prices and that distorts competition because it's very hard to tell which company offers best value.
You're talking as this is all fact. Where are you getting this information from ?
Sometimes I despair of DS threads - hoping to read about the new Relish service but get two pages of tennis about Openreach and the UK fixed line internet infrastructure :-(
Err...it appears to be you who has not the slightest clue what 'anecdotal evidence' means. It is evidence based on personal experience. A very small sample, which, in this case, is just you. It's usually evidence which is neither true nor reliable. Perhaps you should have looked it up before stabbing out a response at your keyboard.
I don't need to, I know what it means. It's evidence based on hearsay ('anecdotes') which cannot be verified, such as "I know, my family in France told me about it". The opposite is evidence based on verifiable documented fact, which I have since I was the person who signed the orders, kept copies of the registered letters of complaint, etc.
But, hey, don't let that stop you trotting out the patronising and bizarre assumption that anyone who does not share your view on this matter is being 'taken in' by the Murdoch press.
Not an assumption, just an opinion. Most people who subscribe to the "rip-off Britain" idea, contrary to published fact, seem to be Sun readers. If you've managed to come to that conclusion all by yourself, please accept my apologies.
. Most people who subscribe to the "rip-off Britain" idea, contrary to published fact, seem to be Sun readers. If you've managed to come to that conclusion all by yourself, please accept my apologies.
And that's not at all patronising. Just how big a hole do you intend to dig for yourself?
Sometimes I despair of DS threads - hoping to read about the new Relish service but get two pages of tennis about Openreach and the UK fixed line internet infrastructure :-(
And not a lot may get it, I live off Abbey Road NW8 and can drive into central London in less than 10 minutes but I'm out of range.
Might be a good deal if you live in town or have a business there, I think businesses are there main goal.
Comments
Over the last decade, BT alone will have raked in £10-20bn or more from line rental. The estimate for providing fibre connections for all of the UK was estimated at £30bn not too long ago, so I'm not at all convinced by your assertions that the level of line rental is justified.
But you are half right about the diagnostic hardware and software. It helped BT cut its maintenance costs by 4-5% in the year to April 2013. Did your line rental go down as a result? Mine didn't. If BKM is right and Wholesale Line Rental (WLR) hovers at under £10, we are being ripped off on line rental.
:
Slight correction, they rent the backhaul fibre from BT as well to connect to their own network control centre. They don't own any actual fibre other than the small EasyNet fibre network they bought years ago. But I'm going off topic.
You obviously have no idea of the setup inside a BT exchange, yes Sky have a few pieces of equipment in the exchange but within the exchange there is a tonne of BT's wiring and test equipment that connects it to the outside network. All of it is maintained by Openreach, in fact they even work on Sky's equipment in there. Line rental goes towards all of this stuff!
I don't know where to begin with your comments about the outside network, do you work for Sky or something? If you think a 50+ year old copper underground network doesn't need a lot of maintenance you're living on another planet! Especially in a wet country like the UK, trust me.
You're using the retail price list of line rental, I think the OR gets under £100/year. So suddenly your £1.7bn is less that £1bn. You also have to consider that OR have something like 25,000 technicians, lets say £40k to keep one on the road. Now you have a £1 bn labour cost before you've even started.
I lived and worked in a major city in Spain for some time and have friends who still do.
Like SteveMcK, we relied on an ADSL system, with a maximum download speed of 2mp and upload speed of 250k on a very good day. And most days (and particularly evenings) were far from good. Visiting recently, I found that nothing had changed, in fact it was worse.
I have an old Kindle 3g, and most evenings it was quicker to view my emails on that rather than wait for 'gmail classic view' to finally load on my laptop.
Movistar (Telefonica, AKA BT) own the whole phone network and lease line space to smaller companies (who then, of course claim to offer higher speeds and cheaper deals, which cannot possibly work).
So no. If a major city in Spain struggles with internet connections, I would say they are not ahead of the UK.
How perculiar - I thought that France had much better rural broadband than we do?
http://www.ispreview.co.uk/index.php/2012/12/bt-openreach-cuts-line-rental-fttc-and-llu-prices-for-uk-isps.html
http://www.ispreview.co.uk/index.php/2013/07/ofcom-force-bt-to-cut-uk-wholesale-standard-broadband-isp-prices.html
However I refer to the second link:
In a nut shell, it is the providers who are forcing the costs to go whilst they keep the headline price of broadband low. Openreach has been dropping prices on the above for the last 5 years or so.
When BT, Sky, Talktalk et al increase their prices it isn't down to Openreach, they are justing being greedy sods!
I fear you don't know what "anecdotal" means. I've lived in France for 20+ years. It's not anecdotal, it's personal experience.
Every country is limited by the same laws of physics. Ifyou live 4km away from the nearest exchange, and your phone lines are old and hooked onto poles, you're going to struggle to do better than 2Mbit/s, no matter what country you're in.
France has a slight advantage in that there's a much higher level of apartment-living rather than individual houses, even in rural areas. That can make it worthwhile for France Telecom/Orange to run a fibre to a group of apartment blocks, where it wouldn't be economic to run it to a road of scattered independent homes.
Even so, UK penetration for "superfast" broadband (30Mbit/s or over) by end-2013 is roughly on a par with Spain and Germany, and approx 3x that of France (70% compared to 25%), going by EU figures. The UK is also cheaper than France for bundled service (broadband + voice).
Most of the major western euroepan countries are roughly on a par, smaller one slike Belgium tend to be slightly ahead because it's logistically easier to supply service over a small area. The ex eastern-bloc countries tend to come in well behind the others, but are catching up.
Not quite: Openreach is part of BT and was forced to lower its prices by Ofcom:
'These new prices will come into effect on 1 April 2012.'
http://media.ofcom.org.uk/2012/03/07/ofcom-sets-wholesale-charges-for-openreach/
So, ISPs offering a phone and broadband service are charged £87.41 a year. That's £7.28 a month, with prices set to decrease by 5.9 % under RPI (inflation). That appears to be a truer reflection of the cost of looking after the maintenance of BT's fixed line network.
£7.28!
BT charges almost £16 a month in line rental. Some ISPs charge over £17. Those are mark-ups of 120%-135%. Perhaps Steve McK et at could tell us all again how this isn't a rip off, how line rental is a fair charge and most of it isn't pure profit.
Err...it appears to be you who has not the slightest clue what 'anecdotal evidence' means. It is evidence based on personal experience. A very small sample, which, in this case, is just you. It's usually evidence which is neither true nor reliable. Perhaps you should have looked it up before stabbing out a response at your keyboard.
But, hey, don't let that stop you trotting out the patronising and bizarre assumption that anyone who does not share your view on this matter is being 'taken in' by the Murdoch press.
Wow, a whole 2mbps, well at least that allows them to do a bit of light streaming. In our village we get 1mbps on a good day, however most of the time its more like 512k, and we haven't really advanced since 2001. In addition to that we also get random disconnects, usually at least one every 15 to 20 minutes.
Given 512k - 1 mbps speeds from BT or 10mbps from Three you can probably guess which is the most popular option for internet connection locally, I also suspect that many of those who constantly vent about people using 3G / 4G as a substitute for ADSL / Fibre would be the first to do exactly the same if the ONLY option on offer to them was 0.5mbps and regular disconnects. No smoke and mirrors, no pack drill.
Its also a bit of a misnomer that everybody who uses 3G already as a home broadband substitute is a heavy user and must consume 100gb of data. I do exactly that and over the past few years I have never used more than 20gb in a month, with my average tending to run around 8gb to 12gb.
I've no idea why anybody would want to go to the effort of tethering from a phone 24/7, if there was a lovely 76mbps fibre cabinet in the street, bring one to this area and I will be the first to sign up, but that is a service which is unlikely to ever happen in my lifetime, 4mbps, for that matter at the moment, is looking equally unlikely.
Rural areas, the kind which will never get a decent ADSL connection but are already within a non congested 3G / 4G coverage area are the ones crying out for this kind of alternative service, however as usual its London and the other Cities which get it first
My figures were way off. According to ispreview, BT looks after 17.6m fixed lines.So, if £7.28 a month is a true reflection of what it costs to maintain a fixed line, it generates around £3bn a year to look after the 34-35m fixed lines across the UK. I have no problem with that.
I do have a problem with the fact that with line rental charges ramped up by 120-130%, £10bn-£11bn can be generated in revenues. Where do we think the other £7bn-8bn goes? On call centres? Plugging pension pot black holes? Rewarding shareholders? Other costs? All of which should be funded only by whatever profit can be made from the service offered, not the standing charge/s imposed.
It should be very easy for all ISPs to factor that £7.28 a month core cost into an all-in price for their various packages. That would make comparison much easier. But fair and open competition is not in any ISP's interest. They are quite happy to keep what parts of the old nationalised service model most suits them.
What the retailers charges on top of the wholesale price is their operating cost, profit and VAT. Its the same reason a £5 bottle of wine costs £20 in a restaurant.
That is not what line rental is supposed to be there for. It's a hangover from the days of nationalisation. It is kept as a separate charge for a reason. It is there to reflect the cost of putting in place and maintaining the pyhsical network or delivery system - nothing else. Profit is supposed to be made on the service provided.
All standing charges are a nonsense. They enable sleight-of-hand when offering headline prices and that distorts competition because it's very hard to tell which company offers best value.
I thought that the ex-eastern-bloc countries were the most ahead in Europe due to the fact that they never really had much of an infrastructure to begin with, then when they did, they were able to leap ahead by moving directly from little or no infrastructure to FTTH/FTTP?
You're talking as this is all fact. Where are you getting this information from ?
Not an assumption, just an opinion. Most people who subscribe to the "rip-off Britain" idea, contrary to published fact, seem to be Sun readers. If you've managed to come to that conclusion all by yourself, please accept my apologies.
And that's not at all patronising. Just how big a hole do you intend to dig for yourself?
Probably because no one has the service?
And not a lot may get it, I live off Abbey Road NW8 and can drive into central London in less than 10 minutes but I'm out of range.
Might be a good deal if you live in town or have a business there, I think businesses are there main goal.