BT pays the piper and calls the tune
When Frank Zappa wanted to alert his kids to a politician’s statement that seemed at odds with experience, he allegedly told them to ask themselves “Is he being paid to say that?”
A curious document is doing the rounds. It was commissioned by BT and written by Matt Yardley, a partner at Analysys Mason, who led the fibre costing study for the Broadband Stakeholder Group (BSG) .
Apparently aimed at local authorities that are considering applications for funds under the £20m Rural Community Broadband Fund (RCBF) banner, it sets out to show that you won’t get fired for ditching them all and waiting for BT to show up.
For communities planning to support self-built networks (Approach 1) or local altnets (Approach 2), it is important that they understand the risks we have identified, to ask the right questions and to plan accordingly. For communities looking to invest public funds (Approach 3), it is imperative that they understand the implications of open access, as well as the other obligations under the EC’s state-aid rules. And finally, for Approach 4, we have indicated at least one way by which the power of local communities could be combined with the scale economies of an established operator like BT and which could mitigate the main risks facing small-scale networks.
As Yardley sees it, Approach 4 “could work, for example, by BT providing ducting to local communities for them to install, but which is then ‘adopted’ into the BT network for operation. The communities would benefit from the purchasing power of BT in buying raw materials (ducting), but more importantly, the adoption into the national network, operated by Openreach, would ensure that communities have access to the same level of retail choice as the rest of the country, while also having the assurance that the network would be operated and maintained professionally.”
In other words, communities should pay BT for the raw materials (20 per cent of the cost), dig it n themselves (80% of the costs) and then hand it back to BT so that BT can charge them for using it. Riiiiight.
There is nothing except a management edict to stop BT Vision from offering its products on altnets such as B4RN. B4RN would be delighted to have the money and could speed up its network build, bringing BT Vision to even more viewers. Ditto for all the other content providers, many of whom are reluctant to use altnets in case their existing service develops inexplicable problems.
Yardley notes that utilities like gas, water, electricity and telecoms are “natural monopolies” because of the cost of building their infrastructre, which is why they are regulated.
Most of BT sells services. For Yardley to suggest that BT as a whole is a natural monopoly is disingenuous. Openreach is the only part of it that deals with infrastructure.
To carry Yardley’s argument to its logical conclusion, Openreach should be carved out of BT and regulated as the monopoly it is.
And no-one pays me to say that.