Ofcom: calling for a cultural change in the telecoms industry

IF your fibre broadband is anything like we get here in South Wales, I would rather spend the excessive service charge on raising carrier pigeons, at least they are reliable !! our service “WAS” twice as fast & a hell of a lot more reliable 10 years ago than it is now !!

A lot more people have started using the internet over the last ten years, Paul. and the content has also become a lot more complex in line with the higher speeds notionally available, so network congestion is the problem. The initial installation of fibre broadband had to compromise between (a) covering most urban areas with adequate capacity and (b) providing high capacity in selected areas but reduced coverage elsewhere. With hindsight I think we can say that was shortsighted, but it was probably the only realistic option at the time.

One very big problem with Broadband is the contention ratio. That refers to how many users are sharing the data capacity on a provider’s line. To put it even simpler, it’s a count of how many households are using the same main broadband line as you.

If your contention ratio is 20:1, for instance, that means twenty households are using one line.

Standard contention ratios used to be around 50:1 for home broadband, and 20:1 for business broadband – but BT says these figures are no longer completely accurate, but they don’t say why they’re not. One guess might be that with a lot of new housing being built your CR might well be far greater than 50:1.

I’m simply wondering if the actual costs need to be as high as quoted, Duncan. I’m always wary of published figures. With the interest in film and TV services via broadband it seems that there is plenty of opportunity to seek funding from the companies involved.

One of the reasons I’m keen on the roll out of fibre broadband is that the telephone service was not built with data transmission in mind. I’ve helped friends diagnose problems with internal extension wiring and I’m surprised that we don’t have more faults.

I do not understand the economics of providing the isolated housing development with FTTP broadband. It was built within the last 20 years so the phone wiring is not ancient and overdue for replacement. I appreciate that other solutions are needed for very rural locations, and you have mentioned possibilities in other Conversations. Patrick Taylor drew our attention to Broadband for the Rural North Ltd.

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I did look at the website, Duncan. The wayleave issue is relevant to a charity I’m a member of because we need to bring some heavy equipment across a farmer’s field. It’s time to put an end to these unreasonable payments when installing and maintaining public services is involved.

It is all very well defending BT as you seem to be doing, although it does appear that you go around in circles while doing it!! My experience with BT is, I suspect, like many; a greedy, grab all conglomerate who care little for the general public. I made a complaint to BT a few years ago about my Broadband, while complaining about something else, but I wrote to the CEO; Customer Services (so called) are a waste of time! Basically, the reply I got was that there was no intention of installing Fast Broadband in the village where I live, because there were insufficient clients – a large village, 3 miles from a town – so I contacted Virgin, who installed their Broadband very quickly and I have not looked back since – current download speed 163mbps – in the last month, BT have installed a grotesque box, which stand about 4′ tall to supply Super Fast Broadband, whilst doing so the contractor dug up the entrance to the cul de sac I live on – with no notice – when I complained the contractor said “BT don’t have to warn you!” What arrogance and if BT think I will ever use their “services” in the future, they can think on!!

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I agree with every sentiment you have expressed about BT. Every quarter when my bill is due my connection starts to play up worse than any other time. My contract run out about 2 years ago (new estate so BT have the monopoly more or less). The blighters tried telling me last quarter that my router must be broken therefore a new one can be sent to me for the price of £10.00 + VAT and postage & packaging costs, other than than would I consider a new contract whereby I could then have their fast broadband… My IT specialist friend was listening to the conversation and put the operator right, hey ho 24 hours later my broadband was up & running and I received a text (still have) stating they found the problem at their end. If it hadn’t been for my friend I could have ended up being in a contract that would not be fit for purpose or out of pocket for purchasing another router. Oh & before I finish, BT did offer to come out and inspect equipment and if they felt I had tampered or no problem detected I would be charge around £100!

I think many users like to control their costs by means of monthly bundles and data allowances, so the move towards them becoming the norm has been driven by consumer demand.

A lot of us attempt to do the same for energy costs too – by paying a fixed amount every month and then having an annual adjustment of that amount.

Derek, monthly bundles and allowances don’t allow you to control costs. They sting you with a much higher rate if you go over the allowance. Only a minority of networks stop the service when you use up your allowance.

NFH you are correct, but only in some cases.

In my case, I almost never exceed any of my monthly allowances – and if I do it is only when I have to make short but very important calls to “out of bundle numbers”, so I don’t mind that.

Also, for anyone using PAYG, costs are controlled by the amount of credit bought. In this case, bundles tend to offer much better value than the standard incremental rates.

Finally, as you acknowledge, a few contract providers, notably Tesco, allow both bundles and expenditure caps to be used, so even with a contract, costs can be tightly controlled.

Hence, from my own experiences, I argue that many (but not all) users do actually prefer the system of bundles to the alternative of varying unpredictable and uncontrolled bills.

The system you are advocating seems to me to be effectively how landlines and mobiles were charged out in the 1990s. I think the industry has moved away from that as a result of consumers voting with their wallets,

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Err . . . Isn’t EE [the biggest mobile phone operator in the UK] part of BT Group?

Thank you. This is helpful. But I think it only partly answers my point. I do think it’s an area where the government could step in. Also plenty of people have been living in areas that don’t have a signal for many years and have their livelihoods there. We knew there was no mobile signal when we moved here 5 years ago. Perhaps we were naive in thinking it might be upgraded, but the broadband wasn’t wonderful then either. It’s much better now as it’s beamed wirelessly from the nearest fibre.

I’m also thinking of people who are out and about. Not only delivery men, but tourists and visitors. There are plenty of hikers and cyclists around here.

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Considering for a moment just the question raised by Susan of the lack of mobile telephone signals in remote areas, it seems to me that the policy has been framed by the fact that, for many decades now, almost everywhere in the UK has been able to have a landline service so the urgent need for better connectivity has not been given the weight it deserves. The landline is no longer capable of providing the speed and accessibility to services that are now regarded as essential. People want to be able to get into contact with the emergency services wherever they roam and also want to be able to pick up the internet wherever they are. The emergency services can still be reached by landline but this is not satisfactory for people on the move, and with rural telephone boxes being removed urgent communication facilities are required. I consider that providing a basic infrastructure should be a publicly-funded investment. There will come a point when maintenance of the obsolete landline infrastructure can cease.

It is interesting to learn from Sharon White’s article that Ofcom intends that 98% of homes and offices will get a good indoor 4G signal from at least one mobile operator by the end of 2017. An ambitious target and I am a bit sceptical that it can be achieved on time so it will be good to have a progress report..

On the question of access to superfast broadband, it would seem that 5% of the population will not be getting this by 2017 at the expense of the taxpayer, but who they are and where they live remains a mystery. We don’t even know how the 95% superfast broadband accessibility target is being calculated, nor whether it is just a question of timing [by 2020 perhaps?] or whether there will ever be an advanced service level to that 5% at all. It is urgently necessary that these notspots are identified so that the residents can make their own plans for a privately funded superfast service if they want one or consider other options. I have a feeling that the real implications of this policy are being concealed because it will be highly controversial to isolate a substantial number of users while leaving in place an extensive and costly-to-maintain landline infrastructure when it is technically possible to provide even the remotest outpost with a fast broadband and combined telecom service.

I think that is right, Alan, and casts further doubt on the ability of Openreach to complete the delivery of superfast broadband to 95% of UK homes and offices by the end of 2017, and on the ability of EE and the others to achieve 98% 4G mobile coverage by the same date.

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This as been raised a number of times before. It is surely a topic that Which? could investigate properly, discuss with the network operators and Ofcom, and find out what the possibilities might be. Perhaps they could ask Sharon to give Ofcom’s views initially on her Convo here.

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OK, Duncan, but since we’ve got Ofcom on the line, as it were, and since they dictate the policy and set the terms which the service providers must comply with, I think it would be best to hear from their Chief Executive first and then we could pursue the operating companies if they are not doing what they are told. I think there’s some confusion over that at the moment – and indeed I was under a false impression of the true requirements and timescales – so let’s see if we can get that clarified in the first place.

Duncan, I find it difficult to understand your message of 120 words in one sentence! I am sure you don’t really mean “and your quite right ,of coarse we are talking……”.

As owner of a high technology research and development company in Hampshire, having 238 staff, mostly highly skilled scientists and engineers, I wanted to expand the company into a second new unit in Cornwall, taking advantage of scientific and engineering graduates from Plymouth University and colleges in Cornwall. Apart from other local authority issues, the lack of dependable mobile communications, and fast broadband swiftly brought the plan to a halt. That is very sad. Not everyone wants to live and work in the cities and other larger communities. I certainly didn’t when I graduated from Plymouth University. If investments in communications in rural areas are not made, they will remain unattractive to new and expanding technology companies. I’m sure that will remain the status quo for a long time. Not all investment and running costs have to generate profit, provided that the organisation as a whole is profitable; witness the supermarkets, all of whom sell “loss leaders” to attract shoppers into the store. Once there they will, of course, buy many non loss leaders, thus generating overall profit.

I understand your point but are there not parts of the South West where broadband is good? There is a programme to improve this area already in hand.

If business wants to profit from their location then perhaps some of those profits need to be used to support their choice?

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Sure there are parts of the SW where broadband is relatively “good”, but in the cities, such as Plymouth, Exeter and Truro; but in Truro it is way behind Plymouth, as every other location is in Cornwall! Ah yes, the program to improve! When will it happen? Cornwall is a first choice for the holidaying masses who, for fear of overseas terrorism holiday in Cornwall. The county is good enough for that, but not for infrastructure investment. Let’s face it, London is the centre of the universe and has first call on any cash available for improvements to public services. Second of course are the other large cities in the UK. To a point I understand and accept that, but I feel that a parallel approach to investment would be welcomed by the fringe population, if only on a relatively minor scale; say 80% of funding to the greater populated areas and 20% to the rest, funded in parallel. But the policy appears to be “Sort out the large cities first and then, if funds are still available, help the rest of the UK, by which time a new government has been elected and it all starts again from the same “start line”! For the rural areas the saying “Always a bridesmaid but never the bride” seems to be an apt expression!

Duncan, you are right; you are driven by enthusiasm, but that is fine and I have great respect for you. My comment was that I found it difficult to understand your meaning, though I worked it out.

I am not at all a protagonist as far as BT is concerned. I simply want whatever mechanism has the ability and speed to equalise the communications capability in rural areas with that of the metropolis and other largely populated areas; after all, the residents of rural areas also pay taxes!

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If we are to believe what Ofcom are saying, there will be 95% superfast broadband access availability for homes and offices by the end of 2017. I have my doubts but am prepared to give Ofcom the benefit of the doubt at this stage because I am not in possession of the facts. I am hoping the Chief Executive will take the opportunity of her Conversation here to confirm the realistic position, until then everything else is speculation. I also wish to have it confirmed that it is the government that is paying for the roll-out into commercially unviable areas and not Openreach [which is merely the delivery organisation].

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Like bus services. But they aren’t always as good as we would like. Gas is not universal, nor is mains drainage and to some even electricity. I’d place NHS, education, social services, housing above broadband in the “essential” priority. Are mobiles essential? Only for emergency I would suggest, the rest of the time they are a great convenience. Is broadband essential – there are ways we can manage without it if we must and certainly we can get by on slow broadband if that is all there is. I think “essential” needs to be thought about in the bigger picture.

As I see it:

Water is regarded as so essential that, even if you are in “water poverty” and cannot pay your water bill, your supplier cannot disconnect you. (But they can, and probably will, sell your debts to debt collection agencies.)

Electricity is less essential than water – if you are in “fuel poverty” your supplier is allowed to put you on a pre-payment meter, with punitive charges for what you already owe, and your supply is disconnected each time you run out of both normal (and emergency) credit.

Gas is not essential – many homes are “all electric”. In the future, gas may even be phased out, to reduce CO2 emissions.

Ah, more newspeak:

Universal availability = 95% availability

My estate was build 6 years ago, with both Virgin and BT / Openreach providing connections to all the houses.

So, if I took out a Virgin subscription, I would be able to get “superfast broadband” . Until I do this, Virgin are kind enough to mailshot me twice a month as “the householder”, just so I won’t forget them. Perhaps one day I’ll take up their offer…

It seems to be that, if our government really wanted to provide broadband everywhere, they could easily split off Openreach from the retail side of BT and then operate Openreach in the manner of the National Grid or Network Rail, i.e. as an infrastructure business, free of any retail interests.

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Derek – That is just about what is happening to Openreach following its detachment from BT Group [except at the very highest level]. It is still wholly owned by BT Group but must operate separately and serve all telecom service providers equally without favour. It will have its own independent Board and corporate structure including financial control, human resources, technical operations, and overall management. I notice that its vans are already starting to reflect this.

This development was brought about at the behest of Ofcom. The Regulator found that there was substance in the complaints of other telecom service providers that Openreach – while it remained closely connected to BT – was not being even-handed in dealing with installations and repairs required by other companies and was causing delays and extra costs. Under the threat of a compulsory break-up, BT Group decided to make alterations to the corporate structures that would satisfy the Regulator.

Only BT Group can sell itself or any of its subsidiaries to other interests – the government no longer has any control as it is an entirely privately-owned company.

On the question of line transfers, the Regulator has consistently considered that BT Group still has overwhelming economic power within the telecoms industry and is well over the technical definition of a monopoly in terms of its network and resources. It has therefore maintained a state of capacity moderation between BT [now Openreach] and other operators to prevent any increase of that dominance and enable a more balanced industry to prevail. I consider that to be in the overall interests of consumers. It explains why BT is seeking revenues in other directions like subscription TV channels in which it is investing heavily.

To answer Duncan’s questions:

“And the 10,000,s of BT pensioners in Britain Derek ? ”

I would expect any government led demergers to make appropriate and fair pension provisions. For example, this was done during the privatisation of parts of UKAEA.

“Are you saying that a private company can be completely cut in half by the government and sold of to the Americans ? ”

First part: Yes, if it is held to be in our national interest by legislation passed through parliament.

Second part: As vital UK infrastructure, some form of Government control would be needed, much as is exercised over key defence industry companies. This can take many forms, ranging from full nationalised ownership, golden shares or even strong and effective regulation.

Subsidiary question: I never mentioned the Americans, why do you think our government want to sell anything specifically to them, as opposed to the highest bidder?

“If you nave the choice of two providers in your area on your estate it must be before the new regulations , and do you think its okay for VM to take over BT lines when BT CANT do the same to Virgin Media lines?”

No – that doesn’t sound fair to me. Perhaps we should be splitting VM as well…

Well put, Derek.

It is impossible to forecast what would happen to the 300,000 BT Group pensioners in any future corporate scenario; this is a controversial matter affecting lots of companies that have pension fund deficits, and the BT deficit is colossal. So far as I am aware, BT Group has always been honourable in meeting its obligations and is in the process of restoring the actuarial capacity of its funds. But that does not mean there won’t be changes to the schemes over time in line with economic circumstances. One would hope that, in the event of a sale or break-up, the shareholders would insist on fair treatment of retired employees already in receipt of benefits. It’s a pity that so many employees and other shareholders sold their stakes for quick profits as they can no longer influence affairs. I don’t believe there is any real likelihood of major change on the current horizon.

BT Group is not the government’s to sell; it belongs to its millions of shareholders, many of which are foreign. I don’t think the government even has its ‘golden share’ any more, but, as Derek rightly says, there are protections in place concerning the UK’s strategic interests and any critical infrastructure would presumably be isolated and excluded from a sale [I would expect the identification of this and the mechanism for doing so are already well developed]. The only real government threat to BT Group would be if it abused its monopoly position and an enforced break-up was dictated. This could follow action by Ofcom and/or the Competition & Markets Authority but BT Group has so far staved off any such action. I suggested previously why BT [Openreach] was barred from taking over other operators’ infrastructure while they were free to access or acquire Openreach facilities; it is to improve the balance of power between the different companies.

Perhaps little, as long as your patience was legendary. But the simple fact is the world is adapting to faster broadband and the assumptions that underlie that adaptation are making faster speeds not a useful option but more of a necessity. We’ve just lost our only ‘local’ bank – and that was three miles away. Banking online is now the only realistic option and, as security features become more entrenched, servers have to be faster to respond and line speed faster to convey the responses. Bit of a vicious circle, but that’s life in the fast – or slow – lane.

For many people, telephone banking is now the only option and I hope that continues to be available as not everyone will be able to use internet banking or be able to afford to do so.

It will be interesting to see when my generation, who were eager early adopters of new technology, will start to retreat as the cost of running even the simplest system – ISP charges, electricity, paper ink and electricity – keeps rising, and the cost and complexity of any replacement kit and its associated software become prohibitive.

There is a prevailing assumption that we will keep going until the end of our lives. Many will, and there are plenty of examples of us septuagenarians furiously pounding our keyboards every day for pleasure and for personal administration purposes. The 80+ age group came too early to be swept along by the computer revolution that took place in workplaces but many have become very adept and their lives have been enriched. But there is another group in their sixties, who were largely employed in manual trades and outdoor occupations, who are not interested in going beyond simple applications on the smart phone. How will the business world adapt to the changing scenario? Does it even recognise that there will be a change in activity characteristics? Effective internet use also depends heavily on literacy and numeracy, and the UK has been struggling with these for two generations or more; that might have an influence in due course.

Presumably the mobile operators’ maps show their own transmitters [or those that they are willing to disclose]. It would not surprise me if there were many more used for bespoke purposes or under contract to other communication organisations. I doubt if Ofcom has the right to reveal the locations of the masts and towers for commercial confidentiality reasons but, as you say, there is no reason why the owners or users could not do so if they wished to – the location of masts carrying customers’ cell-phone traffic is not a state secret.

Some masts or installations are operated by other service companies on behalf of mobile phone companies; until a few years ago we lived near a water tower that accumulated more and more transmitters and microwave dishes, all anonymous to the passer-by but obviously all assigned to particular cell-phone operators. This array was managed and maintained by an independent company. There must have been some complicated equipment in the ground-level structure that unscrambled the bundles of signals coming in through a microwave link and relayed them to the appropriate transmitters for direction to cell-phones, and in reverse received the cell-phone signals and routed them to the receiving phones via other masts or towers. It is a highly complex and fascinating process that we take for granted, but is mainly used for fairly trivial communications.

I cannot believe there is not also a network of classified transmitters used for governmental, security and military communications. There are probably enthusiasts who try to identify and log these installations and work out who is using them.

Duncan – I was not aware that anyone was “trying to put all the mobile problems on BT’s back”, or is BT carrying cell-net traffic on behalf of other companies? After shedding O2 many years ago and until recently with the acquisition of EE, BT has had little to do with mobile services so your comment surprised me. I am also mystified by your comment “obviously none of you have heard of Vodafone and all the rest”: who are the “none of you”? You seem to have taken to addressing other contributors at large and berating them for their views on telecom services. In a previous post you said “Why hasn’t this sunk in ?? I am talking to intelligent people here , Everyone of you know BT is a private company , every one of you know you voted for it to be privatised – then after years – you start screaming about BT NOT acting like a publicly owned company -come on -get real! ” – What’s that all about? Get angry by all means, but please don’t take it out on other contributors who are entitled to write what they feel.

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I see what you’re saying, Duncan, and I have some sympathy with your objections to the one-sided comments. So far as BT [and from now on Openreach as the major infrastructure provider] is concerned, it goes with the territory; the organisation has a dominant position and manages a network far bigger than all the other telecom service providers put together so it will always get some flak. I would hope that following the ring-fencing of Openreach the service to other operators will get better, the relationship will improve, and the blame culture will abate. The fact remains, however, that the majority of households will receive their broadband and telecom services through fibre and copper owned and maintained by Openreach and that 99% [I’m guessing] of trunk distribution will be routed by Openreach. I agree with you that the other network operators should now grow up and accept their responsibilities. The sooner we get some updates from Ofcom on the broadband roll-out the sooner everyone can stop speculating about who’s doing what and why [or, more to the point, who’s NOT doing what and why not].