Tories moot breaking up BT Openreach monopoly
Local loop droop
A Conservative government would allow rivals to connect their own fibre to BT exchanges as part of a plan to spread the rollout of faster broadband to rural areas.
The shadow chancellor George Osborne said the Tories would end BT Openreach's local loop monopoly in an interview on the Andrew Marr Show on Sunday.
It would mean other ISPs such as Sky or Carphone Warehouse could lay fibre where BT's own rollout, currently scheduled to cover 40 per cent of the national network by mid-2012, does not reach.
BT has said the economics of upgrading its network make it too expensive to connect the most sparsely populated final third of the country. It has lobbied for subsidies, which the government has heeded with a forthcoming 50p per month tax on every landline, raising about £175m annually.
The Conservatives oppose the tax and claim market forces could deliver wider rollout if BT Openreach's monopoly was revoked.
If that didn't work, Osborne said, underspend from the digital TV switchover would be diverted from the licence fee.
"If there are some parts of the country where the market can't get to - because I think the best way to deliver this is by breaking up the BT monopoly at the moment which holds back companies like Carphone Warehouse or Virgin) - if we find the market can't do that, then use the BBC licence fee, the digital switchover money in the BBC licence fee, to get broadband out to the rest of the country, he said.
The government has earmarked the digital switchover surplus to help the communications industry deliver a 2Mbit/s universal service commitment to 100 per cent of premises.
Osborne yesterday set a target of "most" homes receiving "superfast broadband" by 2017. He said his "superfast" means 100Mbit/s. Three quarters of the upgrade BT has committed to are to be fibre-to-the-cabinet installations, capable of a theoretical maximum of only 40Mbit/s. The other 25 per cent will be fibre-to-the-premises and comply with the Tory definition.
However Virgin Media's cable network is currently capable of up to 50Mbit/s and covers about 50 per cent of premises. Tests are ongoing at 200Mbit/s, so it seems likely that between BT and Virgin Media the Conservative target would be met without any government intervention.
As part of its Digital Britain strategy, the current government pledged last year that 90 per cent will be connected to "superfast" services by 2017. It didn't define "superfast" however. ®
Wider adoption of broadband will lead to an increased likelihood of having to see posts written as poorly as the one above.
On second thoughts, can we rip the fibre back up?
But Openreach don't have a monopoly
Somebody please tell the Tories there's already nothing to stop any suitably motivated and suitably authorised communications provider from connecting customer premises to fibre today; it doesn't have to go via a BT exchange either.
Look for example at the miraculous Fibrecity in Bournemouth, featured on this very website in January 2008. What a success that's been.  (Hint: nobody connected yet. Anybody know why not?).
Look, what exactly is the point in having three or four sets of overlapping or competing last mile infrastructure for delivering bits to lucky people's premises (homes, businesses, etc). (The unlucky ones, which is half the country, don't have any choice/competition anyway).
For the last mile data you've got BT (Openreach) and Virgin and a handful of WISPs (plus the business connectivity folks).
For broadcast you've got Virgin cable, Sky satellite, and Arqiva (Freeview etc) via the aerial. And a handful of BT Vision folks (I assume Homechoice->TiscaliTV is dead?)
For the last mile for phones: BT, Virgin, Kcom. Get rid of the copper and there's no need for an army of techs doing band-aid jobs on a creaking decades-old copper (and aluminium) phone network, whilst wanting £150+ before they'll look at a DSL fault let alone fix it .
If there was one reliable affordable 100Mbit fttp infrastructure there'd be enough bandwidth for everybody's SoHo needs, the satellite dishes and TV aerials and copper phone wires and the cableTV infrastructure etc could all go the way of the abacus.
Still, so long as we're stuck in the dinosaur era of "the market knows best", we're never going to get cost-effective joined up thinking, let alone cost effective joined up networking.
Allowing other companies to build their own local loop won't help. The problem is money. BT aren't refusing to upgrade the local loop in rural areas because 'they don't like them damn' country bumpkins'. They are not doing it because there aren't enough people in the catchment area to provide a decent RoI.
Don't forget - BT are the only telco in the country that has seen fit to install broadband equipment into every telephone exchange in the country. If BT can't make the figures stack up in not-spots or slow-spots then the LLUOs are not going to be able to either. Most of those other telcos can't even see any point in laying their own backhaul fibre and instead rent capacity of BT.
The not-spot and slow-spot problem (and incidently it isn't all rural areas. Trying zooming in on London: http://www.broadband-notspot.org.uk/coverage-map.html) is all about Return On Invesment. With Ofcom's current pricing structure the only place where you scrape any kind of return is large towns and cities.