Ofcom considers forcing BT to fully separate Openreach

Everything Goes · 16-07-2015, 16:18

Ofcom are considering forcing BT to fully separate Openreach. BT's ambitions to buy EE along with their significant holding of network infrastructure gives them far too much power in my opinion. Along with the CMA looking at EE's takeover bid perhaps BT have bitten off more than they can chew?

http://www.ispreview.co.uk/index.php...h-from-bt.html

moox · 16-07-2015, 19:09

I agree with the idea (I think I've probably bored people to death with the number of times I've suggested it).

It's time the national infrastructure was run in the interests of the country and the entire industry, rather than simply furthering BT's interests and using monopoly revenue to subsidise BT Retail endeavours e.g. sport. It'd also eliminate any possibility of special treatment (not that there has been any evidence of that happening, BT/Openreach has been pretty good at following the rules)

I'd also question whether the inevitable use of 4G for rural broadband is really a good idea too. It might have a place in the real back of beyond, but BT might do as the US telcos have done and attempt to use it in areas that could easily sustain a wired service

enapace · 16-07-2015, 19:20

Would a seperate openreach have enough money to be able to afford significant investment. Lets be honest we all know eventually that UK wide FTTP has to happen and if they are doing it in stages it likely means it will be around £30-35 Billion in total investment needed in the next 5-10 years.

japaul · 16-07-2015, 21:28

Quote:

Originally Posted by enapace

Would a seperate openreach have enough money to be able to afford significant investment. Lets be honest we all know eventually that UK wide FTTP has to happen and if they are doing it in stages it likely means it will be around £30-35 Billion in total investment needed in the next 5-10 years.

It would depend on how it's structured and financed as to what levels of investment it would be capable of and I think it's probably a mistake to assume the separate entity would be the same as Openreach today save for not being part of BT.

The current boundaries were drawn up around 10 years ago during which time competition in the various markets and technologies have changed so it's not easy to get right and you can't afford to get it wrong as it'll be virtually impossible to correct since you would be transferring commercial ownership of assets. In fact the current system relies on the fact that since all the assets belong to the same legal entity you can ignore the sort of problems that arise if the separation was real.

clewsy · 16-07-2015, 22:54

Plus wpuldvthe EE deal then fall through as BT shareholders won't be happy

david16 · 17-07-2015, 01:43

If openreach was divested they would be just like every other telecommunications company in a level playing field.

That can only be fair and it would be great meaning lower prices all round for the consumer.

clewsy · 17-07-2015, 06:33

No chance on lower prices. They will be higher as it would be a network rail job all over.

I think keep it as it is, but stop all this merging in the mobile market. This effectively is making it more anti competitive.

DevonBloke · 17-07-2015, 09:17

Quote:

Originally Posted by moox

I think I've probably bored people to death with the number of times I've suggested it.

Zzzzzzzzzzzz................

Aye Up · 17-07-2015, 19:48

If it were to happen then I would think BT will probably have to spin off Wholesale in whatever the rump looks like when divested.

This is going to be a tough one, BT has invested a lot of time and money rolling out FTTC/P to areas which turn a profit. Its only right that other companies like Sky ot TalkTalk are able to piggy back if you will. I just wonder whether those who use BT via LLU or Wholesale really just want the free lunch? Openreach's rollout for FTTC/P has been a bloody mess, wasteful use of resources from LA and BDUK.

I would love for Openreach to be spun off and the government take charge. There does need to be a unified approach to investment in digital infrastructure and services. But that probably won't ever happen, not while the government commits so much money to BDUK.

Gigabit · 17-07-2015, 20:05

The issue is that for most people, there isn't an alternate network. So basically one provider is going to have a monopoly over it.

What we need (and what should have happened) is for the BDUK funds go to companies that aren't BT.

moox · 17-07-2015, 20:48

Quote:

Originally Posted by Gigabit

What we need (and what should have happened) is for the BDUK funds go to companies that aren't BT.

The problem with this idea is that you lose the economy of scale. A patchwork quilt of networks will be even worse than BT's crap strategy of "flip a coin to choose whether to do FTTH or not". At least Openreach gives you consistency in terms of price, service, type of technology and so on.

Look at Digital Region as an example of what could happen when local authorities spaff tons of money into doing something their own way.

Everything Goes · 24-08-2015, 16:42

UK Labour Party Joins Calls for Ofcom to Split BT from Openreach

The Labour Party’s Shadow Culture Secretary, Chris Bryant MP has joined the chorus asking Ofcom to split up Openreach from BT.

http://www.ispreview.co.uk/index.php...openreach.html

http://www.telegraph.co.uk/finance/n...-services.html

Gigabit · 24-08-2015, 17:16

Jeremy Corbyn probably wants BT to be completely nationalised so when we're living in a dystopian society, at least we'll know that we're paying for each others' calls.

Zebb · 24-08-2015, 17:30

Quote:

Originally Posted by Gigabit

Jeremy Corbyn probably wants BT to be completely nationalised so when we're living in a dystopian society, at least we'll know that we're paying for each others' calls.

What do you mean when, it's already here.

wb9999 · 24-08-2015, 17:30

Quote:

Originally Posted by Aye Up

I would love for Openreach to be spun off and the government take charge.

Please, anything but that. Living in South Yorkshire, I saw how badly planned and operated Digital Region was. It's a perfect example of why the public sector doesn't know anything about technology and spending millions of pounds efficiently.

Aye Up · 24-08-2015, 17:46

Would it make much of a difference if Openreach was spun out? BT itself is a massive global company with an equally massive size balance sheet. Openreach on its own would potentially be only around a 5th of the value of BT Groupe PLC.

As I said earlier the other big players Sky and TalkTalk seemingly want free lunch and not pay charges which are appropriate to the installation and running costs.

I would love for there to be a state owned company whose sole purpose is on digital infrastructure and rolling out fibre everywhere. But lets be real that is not going to happen. What may pose a problem is the funding arrangement with BDUK and the LAs, I am unsure as to who gets the money first BT Group PLC or Openreach?

I know the purpose of those funds are for superfast rollout across the UK, how would the Local and National Government claw that money back of Openreach was siphoned off?

Even if its the wish of the big players for Openreach to be separated, I suspect OFCOM has a duty to ensure value for money with BDUK. I should add thay BDUK isn't controlled by OFCOM either (Culture Secratary), given it is a Government scheme I suspect final say will be down to them. £1.7B is the potential losses if BT keeps those funds should Openreach be separated, assuming the money doesn't follow division itself.

clewsy · 24-08-2015, 17:48

It won't happen.

There are shareholders involved and that means all of this talk will never be anything other than that.

Seen legal papers already that are on this topic and trust me this would go on for years. You could have 20yrs of battles as someone has to compensate them. Believe the shareholders would choose open reach over being forced to spin off to by EE.

Can the government afford for them to drop out? I think they are banking on them holding 3 to task.

It's a total mess and really is going to probably all fall flat.

david16 · 24-08-2015, 17:49

I will just use the commercial mno or mnvo that offers the best value for money PAYG mobile phone sim rather than suddenly switch to BT if Corbyn becomes prime minister.

Why is BT still classed by many as the uk telecommunications company with serious clout when on reality they are truly dreadful and it's ridiculously expensive to use their telecommunications services.

Why does it have to be the awful BT to automatically be the nationalised telecommunications company, Scottish Power, Hydro Electric etc automatically earmarked to be the nationalised electricity companies, and British gas to be automatically earmarked as the nationalised gas company once again if Corbyn becomes prime minister? They are some of the most expensive utility companies around in the privatised era and all provide terrible customer service too.

david16 · 24-08-2015, 18:02

Quote:

Originally Posted by clewsy

It won't happen.

There are shareholders involved and that means all of this talk will never be anything other than that.

Seen legal papers already that are on this topic and trust me this would go on for years. You could have 20yrs of battles as someone has to compensate them. Believe the shareholders would choose open reach over being forced to spin off to by EE.

Can the government afford for them to drop out? I think they are banking on them holding 3 to task.

It's a total mess and really is going to probably all fall flat.

Government closing down all these commercial utility companies down and forcing everybody who dislikes BT, Scottish Power and British Gas to have to use them again would be ridiculous.

Have the nationalised utility companies but not as the only utility companies you have to take.

Gigabit · 24-08-2015, 18:03

Quote:

Originally Posted by Zebb

What do you mean when, it's already here.

So wrong, so very wrong.

Gigabit · 24-08-2015, 18:05

The Tories will never nationalise a business like this and that's a good thing.

I personally think an independent private company which the ISPs own shares in is a good idea.

clewsy · 24-08-2015, 18:21

It's really complex though as there were some very detailed negotiations that took place to get BT / Open reach to roll out fibre.

Lets be honest its not that fair of playing field when BT/Open reach have to pay to build the network (or purchase from the Gov in the first place) , yet then are made to open it up and charge a set price for access.

If that was your hard earned investment and then your made to open it up to all, with no say on price. You wouldn't be impressed.

You can't really nationalise something that has been sold off years ago. Way too complex and this is why all this Labour stuff is pie in the sky.

frankie_baby · 25-08-2015, 23:33

It's worth remembering that the whole opening up of the market by the (tory) government to competition is the reason why we didn't get a national FTTP network from BT over 20 years ago

Ashley_Bradbury · 25-08-2015, 23:59

wait... so we would have fiber everywhere with a closed market?? sure, it totally worked for other countries.

Aye Up · 26-08-2015, 00:50

Quote:

Originally Posted by frankie_baby

It's worth remembering that the whole opening up of the market by the (tory) government to competition is the reason why we didn't get a national FTTP network from BT over 20 years ago

Its not the opening up of competition which prevented BT rolling out fibre. Thatcher was too scared of BT getting a monopoly yet did very little to overcome it. BT was blocked from fibre and broadcasting , the Tories began throwing out cable licenses to anyone that would want them. Stupidly it was also based on a different standard (now DOCSIS) compared to BT. It was the lack of competition which stopped BT rolling out fibre, had BT been allowed to proceed with the rollout, competition would have been higher.

Even the Tories make stupid decisions and distort the market, look what are left with today, FTTC which isn't real fibre. Blame the Tories not BT for this, ironically its cost us more down than it would have done back in the late 80s, yet that would have been rolled out using private finance.

16-07-2015, 16:18	#1
Everything Goes Forum Member Join Date: Mar 2002 Location: In the future.... Posts: 11,259	Ofcom considers forcing BT to fully separate Openreach Ofcom are considering forcing BT to fully separate Openreach. BT's ambitions to buy EE along with their significant holding of network infrastructure gives them far too much power in my opinion. Along with the CMA looking at EE's takeover bid perhaps BT have bitten off more than they can chew? http://www.ispreview.co.uk/index.php...h-from-bt.html

16-07-2015, 19:09	#2
moox Forum Member Join Date: Oct 2004 Posts: 14,645	I agree with the idea (I think I've probably bored people to death with the number of times I've suggested it). It's time the national infrastructure was run in the interests of the country and the entire industry, rather than simply furthering BT's interests and using monopoly revenue to subsidise BT Retail endeavours e.g. sport. It'd also eliminate any possibility of special treatment (not that there has been any evidence of that happening, BT/Openreach has been pretty good at following the rules) I'd also question whether the inevitable use of 4G for rural broadband is really a good idea too. It might have a place in the real back of beyond, but BT might do as the US telcos have done and attempt to use it in areas that could easily sustain a wired service

16-07-2015, 19:20	#3
enapace Forum Member Join Date: Mar 2013 Posts: 4,249	Would a seperate openreach have enough money to be able to afford significant investment. Lets be honest we all know eventually that UK wide FTTP has to happen and if they are doing it in stages it likely means it will be around £30-35 Billion in total investment needed in the next 5-10 years.

16-07-2015, 21:28	#4
japaul Forum Member Join Date: Apr 2013 Posts: 1,662	Quote: Originally Posted by enapace Would a seperate openreach have enough money to be able to afford significant investment. Lets be honest we all know eventually that UK wide FTTP has to happen and if they are doing it in stages it likely means it will be around £30-35 Billion in total investment needed in the next 5-10 years. It would depend on how it's structured and financed as to what levels of investment it would be capable of and I think it's probably a mistake to assume the separate entity would be the same as Openreach today save for not being part of BT. The current boundaries were drawn up around 10 years ago during which time competition in the various markets and technologies have changed so it's not easy to get right and you can't afford to get it wrong as it'll be virtually impossible to correct since you would be transferring commercial ownership of assets. In fact the current system relies on the fact that since all the assets belong to the same legal entity you can ignore the sort of problems that arise if the separation was real.

16-07-2015, 22:54	#5
clewsy Forum Member Join Date: Mar 2003 Location: Midlands Posts: 2,860	Plus wpuldvthe EE deal then fall through as BT shareholders won't be happy

17-07-2015, 01:43	#6
david16 Forum Member Join Date: Nov 2001 Location: Central Belt Posts: 12,290	If openreach was divested they would be just like every other telecommunications company in a level playing field. That can only be fair and it would be great meaning lower prices all round for the consumer.

17-07-2015, 06:33	#7
clewsy Forum Member Join Date: Mar 2003 Location: Midlands Posts: 2,860	No chance on lower prices. They will be higher as it would be a network rail job all over. I think keep it as it is, but stop all this merging in the mobile market. This effectively is making it more anti competitive.

17-07-2015, 09:17	#8
DevonBloke Forum Member Join Date: Apr 2011 Location: Totnes, Devon Posts: 6,694	Quote: Originally Posted by moox I think I've probably bored people to death with the number of times I've suggested it. Zzzzzzzzzzzz................

17-07-2015, 19:48	#9
Aye Up Forum Member Join Date: Mar 2001 Location: North West Posts: 4,885	If it were to happen then I would think BT will probably have to spin off Wholesale in whatever the rump looks like when divested. This is going to be a tough one, BT has invested a lot of time and money rolling out FTTC/P to areas which turn a profit. Its only right that other companies like Sky ot TalkTalk are able to piggy back if you will. I just wonder whether those who use BT via LLU or Wholesale really just want the free lunch? Openreach's rollout for FTTC/P has been a bloody mess, wasteful use of resources from LA and BDUK. I would love for Openreach to be spun off and the government take charge. There does need to be a unified approach to investment in digital infrastructure and services. But that probably won't ever happen, not while the government commits so much money to BDUK.

17-07-2015, 20:05	#10
Gigabit Forum Member Join Date: Aug 2014 Location: United Kingdom Posts: 2,887	The issue is that for most people, there isn't an alternate network. So basically one provider is going to have a monopoly over it. What we need (and what should have happened) is for the BDUK funds go to companies that aren't BT.

17-07-2015, 20:48	#11
moox Forum Member Join Date: Oct 2004 Posts: 14,645	Quote: Originally Posted by Gigabit What we need (and what should have happened) is for the BDUK funds go to companies that aren't BT. The problem with this idea is that you lose the economy of scale. A patchwork quilt of networks will be even worse than BT's crap strategy of "flip a coin to choose whether to do FTTH or not". At least Openreach gives you consistency in terms of price, service, type of technology and so on. Look at Digital Region as an example of what could happen when local authorities spaff tons of money into doing something their own way.

24-08-2015, 16:42	#12
Everything Goes Forum Member Join Date: Mar 2002 Location: In the future.... Posts: 11,259	UK Labour Party Joins Calls for Ofcom to Split BT from Openreach The Labour Party’s Shadow Culture Secretary, Chris Bryant MP has joined the chorus asking Ofcom to split up Openreach from BT. http://www.ispreview.co.uk/index.php...openreach.html http://www.telegraph.co.uk/finance/n...-services.html

24-08-2015, 17:16	#13
Gigabit Forum Member Join Date: Aug 2014 Location: United Kingdom Posts: 2,887	Jeremy Corbyn probably wants BT to be completely nationalised so when we're living in a dystopian society, at least we'll know that we're paying for each others' calls.

24-08-2015, 17:30	#14
Zebb Forum Member Join Date: Apr 2014 Posts: 652	Quote: Originally Posted by Gigabit Jeremy Corbyn probably wants BT to be completely nationalised so when we're living in a dystopian society, at least we'll know that we're paying for each others' calls. What do you mean when, it's already here.

24-08-2015, 17:30	#15
wb9999 Forum Member Join Date: May 2008 Posts: 139	Quote: Originally Posted by Aye Up I would love for Openreach to be spun off and the government take charge. Please, anything but that. Living in South Yorkshire, I saw how badly planned and operated Digital Region was. It's a perfect example of why the public sector doesn't know anything about technology and spending millions of pounds efficiently.

24-08-2015, 17:46	#16
Aye Up Forum Member Join Date: Mar 2001 Location: North West Posts: 4,885	Would it make much of a difference if Openreach was spun out? BT itself is a massive global company with an equally massive size balance sheet. Openreach on its own would potentially be only around a 5th of the value of BT Groupe PLC. As I said earlier the other big players Sky and TalkTalk seemingly want free lunch and not pay charges which are appropriate to the installation and running costs. I would love for there to be a state owned company whose sole purpose is on digital infrastructure and rolling out fibre everywhere. But lets be real that is not going to happen. What may pose a problem is the funding arrangement with BDUK and the LAs, I am unsure as to who gets the money first BT Group PLC or Openreach? I know the purpose of those funds are for superfast rollout across the UK, how would the Local and National Government claw that money back of Openreach was siphoned off? Even if its the wish of the big players for Openreach to be separated, I suspect OFCOM has a duty to ensure value for money with BDUK. I should add thay BDUK isn't controlled by OFCOM either (Culture Secratary), given it is a Government scheme I suspect final say will be down to them. £1.7B is the potential losses if BT keeps those funds should Openreach be separated, assuming the money doesn't follow division itself.

24-08-2015, 17:48	#17
clewsy Forum Member Join Date: Mar 2003 Location: Midlands Posts: 2,860	It won't happen. There are shareholders involved and that means all of this talk will never be anything other than that. Seen legal papers already that are on this topic and trust me this would go on for years. You could have 20yrs of battles as someone has to compensate them. Believe the shareholders would choose open reach over being forced to spin off to by EE. Can the government afford for them to drop out? I think they are banking on them holding 3 to task. It's a total mess and really is going to probably all fall flat.

24-08-2015, 17:49	#18
david16 Forum Member Join Date: Nov 2001 Location: Central Belt Posts: 12,290	I will just use the commercial mno or mnvo that offers the best value for money PAYG mobile phone sim rather than suddenly switch to BT if Corbyn becomes prime minister. Why is BT still classed by many as the uk telecommunications company with serious clout when on reality they are truly dreadful and it's ridiculously expensive to use their telecommunications services. Why does it have to be the awful BT to automatically be the nationalised telecommunications company, Scottish Power, Hydro Electric etc automatically earmarked to be the nationalised electricity companies, and British gas to be automatically earmarked as the nationalised gas company once again if Corbyn becomes prime minister? They are some of the most expensive utility companies around in the privatised era and all provide terrible customer service too.

24-08-2015, 18:02	#19
david16 Forum Member Join Date: Nov 2001 Location: Central Belt Posts: 12,290	Quote: Originally Posted by clewsy It won't happen. There are shareholders involved and that means all of this talk will never be anything other than that. Seen legal papers already that are on this topic and trust me this would go on for years. You could have 20yrs of battles as someone has to compensate them. Believe the shareholders would choose open reach over being forced to spin off to by EE. Can the government afford for them to drop out? I think they are banking on them holding 3 to task. It's a total mess and really is going to probably all fall flat. Government closing down all these commercial utility companies down and forcing everybody who dislikes BT, Scottish Power and British Gas to have to use them again would be ridiculous. Have the nationalised utility companies but not as the only utility companies you have to take.

24-08-2015, 18:03	#20
Gigabit Forum Member Join Date: Aug 2014 Location: United Kingdom Posts: 2,887	Quote: Originally Posted by Zebb What do you mean when, it's already here. So wrong, so very wrong.

24-08-2015, 18:05	#21
Gigabit Forum Member Join Date: Aug 2014 Location: United Kingdom Posts: 2,887	The Tories will never nationalise a business like this and that's a good thing. I personally think an independent private company which the ISPs own shares in is a good idea.

DS Forums

Ofcom considers forcing BT to fully separate Openreach

24-08-2015, 18:21	#22
clewsy Forum Member Join Date: Mar 2003 Location: Midlands Posts: 2,860	It's really complex though as there were some very detailed negotiations that took place to get BT / Open reach to roll out fibre. Lets be honest its not that fair of playing field when BT/Open reach have to pay to build the network (or purchase from the Gov in the first place) , yet then are made to open it up and charge a set price for access. If that was your hard earned investment and then your made to open it up to all, with no say on price. You wouldn't be impressed. You can't really nationalise something that has been sold off years ago. Way too complex and this is why all this Labour stuff is pie in the sky.

25-08-2015, 23:33	#23
frankie_baby Forum Member Join Date: Feb 2007 Posts: 1,077	It's worth remembering that the whole opening up of the market by the (tory) government to competition is the reason why we didn't get a national FTTP network from BT over 20 years ago

25-08-2015, 23:59	#24
Ashley_Bradbury Forum Member Join Date: Jan 2013 Posts: 106	wait... so we would have fiber everywhere with a closed market?? sure, it totally worked for other countries.

26-08-2015, 00:50	#25
Aye Up Forum Member Join Date: Mar 2001 Location: North West Posts: 4,885	Quote: Originally Posted by frankie_baby It's worth remembering that the whole opening up of the market by the (tory) government to competition is the reason why we didn't get a national FTTP network from BT over 20 years ago Its not the opening up of competition which prevented BT rolling out fibre. Thatcher was too scared of BT getting a monopoly yet did very little to overcome it. BT was blocked from fibre and broadcasting , the Tories began throwing out cable licenses to anyone that would want them. Stupidly it was also based on a different standard (now DOCSIS) compared to BT. It was the lack of competition which stopped BT rolling out fibre, had BT been allowed to proceed with the rollout, competition would have been higher. Even the Tories make stupid decisions and distort the market, look what are left with today, FTTC which isn't real fibre. Blame the Tories not BT for this, ironically its cost us more down than it would have done back in the late 80s, yet that would have been rolled out using private finance.