Following the broadband money

Vaizey sings BT’s praises

with 19 comments

BTHOlogoBT is a great British company doing a great job for Britain. We know this because communications minister Ed Vaizey said so in parliament.

He was answering a question from one of his predecessors, Stephen Timms. Timms wanted to know why the entire rural superfast broadband fund is being handed to one company—to BT. “BT is now behaving like any monopolist that has everyone over a barrel, and we have heard about the consequences from all sides this morning. Why has competition been forgotten?” he said.

Vaizey replied, “It just so happens that BT has won the contracts, and I reject the suggestion that it is behaving like a monopolist. We are getting value for money for our contracts, and BT is a great British company doing a great job for Britain.”

He complimented Timms “who did so much to promote competition. As a result of that, BT has just a 30% share of the broadband market, and the market share of the historic incumbent in the copper broadband market is one of the lowest in the world. That is a testament to the right hon Gentleman’s great work, but we are carrying it on. We made sure that our process for rural broadband was competitive.”

As Francis Urquhart might say, “You may think that; I couldn’t possibly comment.”


Written by Br0kenTeleph0n3

2013/04/22 at 22:45

19 Responses

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  1. We must agree that BT Wholesale only has a share of the broadband market but almost everybody** is obliged to accept the monopolistic offerings from BT Openreach which include restrictive practices such as locked-down modems, some subcontractor installations without line tests, a fixed cap applied to a line not capable of supporting higher speeds (even after faults are repaired if the cap removal is forgotten), and many longer lines unable to reach the minimum VDSL design speed of 15 Mbps – some can’t support VDSL at all. BT Openreach presumably still have no USO as they do not seem obliged to repair under-performing lines lines not fit for VDSL purpose. Only those users whose cabinets are to be “fibre enabled” might eventually be able to overcome these restrictive practices by paying up to £3,500 installation charges, plus possible excess construction charges, for a “fibre on demand” service probably on a three year contract.

    ** In contrast those fortunate enough to avoid the Openreach monopoly e.g. in the B4RN area might be able to pay £150 connection fee and £25 + VAT per month for a 1 Gbps true Fibre-To-The-Premises service.

    Merrow Drover

    2013/04/22 at 23:28

    • I do hope someone will translate your comment so that Vaizey gets it.


      2013/04/22 at 23:32

      • Indeed. It worries me when a minister quotes a figure such as “30%” and obviously doesn’t understand it at all.


        2013/04/23 at 05:22

      • I met with “Mr Ed” during the initial DCMS roadshow (and have also had discussions with Adam Smith when he was the bagman for Jeremy Hunt) and have also had lengthy discussions with the DCMS gang (before they became BDUK). In summary, I say full marks to BT for doing a fantastic job in maintaining their money making machine (I’ll be a BT pensioner in a couple of years), but as someone who tried to build a FTTH business (we competed against BT for the Ebbsfleet project) we realised that we cannot fight an 800 lb gorilla (in their main markets). Full marks to the B4RN project in showing how it can be done, but IMHO so long as the Retail, Wholesale, and OR divsions of BT all report into the same CEO, the bigger the mess we are getting into. If only we had listened to John Harper (back in 1997). Final comments on politicians and civil servants – they don’t get, I’m afraid?

        John Nolan

        2013/04/23 at 08:26

    • Aren’t there plans for ISPs to provide own modems? 50 % of UK can go with VM.


      2013/04/23 at 22:48

  2. Some apposite explanations might be discovered here and the subsequent comments :-

    We have attempted on many occasions to enlighten Public Servants and Politicians at all levels but to no avail.

    Merrow Drover

    2013/04/23 at 06:04

  3. Bt Internet may only hold a 30% share of the ISP market but the funding has all gone to Openreach which is a monopoly. Vaizey is either stupid or corrupt or badly advised or knows something we don’t ? How can he not see what has happened?


    2013/04/23 at 07:26

    • How can Openreach be a monopoly when I see a VM duct into Tescos? In a non cabled area.


      2013/04/23 at 08:03

  4. I think that Vaizey like all the others has been completely taken in by vital vision. I don’t think they are corrupt or particularly stupid, I think they are out of their depth and brainwashed by the power of a company with a multimillion pound marketing budget and extremely clever salesmen. The same applies to the civil servants, councillors et al.

    In one of our parishes we have a city councillor who still firmly believes BT will bring him superfast, although there are no cabinets for miles and he’s on a sub meg connection to an exchange in another village 4km away. He won’t let us dig across his paddock to reach other people or the local school because he says BT will provide a service that will work. He isn’t corrupt, he’s just like Vaizey. He believes the wrong people and isn’t technical enough to understand the physics. We just have to dig round him and he can continue on his slow connection and start to worry when he wants to sell his house. It will probably be the only slow one left in the village and nobody will want it. When everyone else is streaming tv and enabling smart homes he’ll still be stuck in the copper slow lane. I very much doubt he will get re-elected once everyone realises… who wants a councillor who gets misled and doesn’t find out the facts?

    It is going to become obvious very soon that the digital divide is growing, and enabling some cabinets is not going to fix it.


    2013/04/23 at 07:59

    • The other extreme is Selling where the parish council gave money to a company who could not finish the job.

      We vote for these people…


      2013/04/23 at 08:05

    • It’s comments that I see on even broadband forums that are disturbing.

      For example the argument against fibre: if you can get 80Meg from FTTC, who needs fibre?

      Of course, only a small minority are ever going to see anything like 80Meg from FTTC anyway. It’s a bizarre comment yet I see it repeated so often.


      2013/04/23 at 09:20

      • Isn’t the discussion therefore about the cost of installing FTTH v. FTTP. And not just in some areas but solutions for built up areas were digging up the pavements gets costly. As an example, a village with typically 3M speeds. Do you FTTC two cabinets for £x or FTTP 600 properties for £y. What would x and y be and installation and rental?


        2013/04/23 at 22:53

      • The discussion is not about how much it costs to install FTTH or FTTC. That is telco talk. The discussion in the end is about getting a service that is fit for the purpose of transferring mainly digitised content reliably between a sender and receiver in a period of time that suits the sender and and receiver, for which they are willing to pay, ideally at the time they want to send. The technology choices and therefore costs are secondary matters.


        2013/04/23 at 23:35

      • @Somerset – oddly enough your questions are the very ones I’ve been trying to do the sums on so as to answer them in the context of this village. It is very difficult, I’d say almost impossible to assess the suitability of the BT network as a starting point for a modern broadband network by which I mean “superfast” – 30Meg downstream is not a fast speed and is going to be out of date really quite quickly as demand for bandwidth begins to take off exponentially.

        At my best guess from all the data that I have – 2 cabs, 240 properties, one cab seems to serve the vast majority of them. Fibre to both cabs should satisfy the USO of 2Meg for all but 2Meg is useless even now. Starting from a more realistic basic service of 10Meg, I cannot say with any certainty what percentage of premises could even get 10Meg. For “superfast” 30Meg I’d say about a third to a maximum of one half of the properties might get that. Partly line length, and partly line quality or lack thereof making some assumptions about which “bits” of the lines are rotting away.

        So FTTC is a short term bump the speeds up a bit exercise, but it is not something that will endure.

        And it’s then a dead end because people haven’t got thousands of pounds to pay to get basic (as they will be by then) 30 Meg services installed, this only coming about because of the position in which we shall then place BT to dictate pricing on an opportunistic basis taking advantage of a monopoly we helped to entrench. Moreover, going this way provides little meaningful competition. That might be acceptable for rurals like here, but not in built up areas some of which at least have a duopoly to select from even now.

        So one part of it is the “chasing headline speeds in the short term” and the other part is the total longer term cost which is massively increased by not using the economy of scale to roll out a network to all (the topography of the village makes this straightforward) and instead manually adapting the old phone network in bespoke fashion one customer at a time.

        I’m not going to put all the figures I have from various providers we’ve consulted with up here, but at a very high level based again on assumptions I have to make – 240 properties, about 100 of them needing FTTP to hit the magic 30 Meg @ about £3k each = £300k plus the cost of the two cabinets (how they would get power to one of them might be a challenge) – you’re in the realms of FTTP there and way over and above what WiFi would cost.

        The old GPO last mile might have been able to be repurposed, but we sold it off for short term gain and unless we intend renationalising it we do have to face the fact that the assets are in private hands and it really may be necessary and desirable to simply start over again.


        2013/04/24 at 00:46

  5. @ ChrisConder,

    I agree with your observations.

    As a small example you might like to read the history here:-

    from which it can be seen that Public Servants and Politicians of all persuasions and at all levels aquiesce to the situation which can only result in the continuation of the incumbent’s quite disastrous policies for UK plc.

    Merrow Drover

    2013/04/23 at 08:15

    • I have just read that @merrow, its awful! How can they be allowed to get away with it? How come the politicians can’t see the truth? That vital vision has a lot to answer for, no wonder BT have removed it from their website.


      2013/04/23 at 09:00

  6. On Nov 28th to EFRA the Minister said Value For Money was a work in progress. What has changed since then? The subsidy levels of over £200 per premise past have not. BT while contracting for outcomes is not contracting to invest an extra billion. Talk Talk/SKy/MNO/Virgin will be requesting lower wholesale GEA prices for 2014-17 in Ofcoms WLA/WBA consultation, not outining what they will invest. Two less than optimal decisions will do nothing to contribute to being best in Europe, but may prevent being best in Europe in the long term. You can understand but not forgive the thinking.

    Elections are 4 years. Ofcom market reviews are 4 years. Good infarstructure policy require more than 10 years to realise.

    NGA for All

    2013/04/23 at 22:14

  7. […] Best of all, it could save her and communications minister Ed Vaizey’s face, although Ed’s will have egg all over it. […]

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