BT Openreach franchise to end

November 30, 2016

Discworld Gods Wikipedia

After a lengthy period of negotiations over the structure of Openreach, the Government Communications watchdog OfCom has lost patience with BT, and proposes the establishment of an independent company

LWD has followed this story in earlier posts which examined the case for and against such a move. [See Is it Openreach or overreach? and The divestment of Openreach is not a simple case ]

The Plans

This week the Government announced its plans to deal with what it sees as a failure by BT to address its concerns regarding OpenReach. According to Reuters:

Britain’s telecoms regulator will go to the European Commission to try to force BT to legally separate Openreach, the division that supplies broadband to millions of homes and businesses, in a major reform aimed at spurring investment in the country’s ageing network.

The regulator, which despite Britain’s vote to leave the European Union still needs European Commission support to force through change at Openreach, wants BT Openreach to plough more money into upgrading its copper networks to fibre to catch up some European rivals and the likes of South Korea and Japan.

Ofcom’s decision to up the ante follows the failure to reach a voluntary deal after more than a year of talks. It said it was “disappointed” that BT had not done enough to separate Openreach from the rest of the group. It had ordered the former state monopoly to run the network arm as a legally separate company in July [2016].

The Independent suggests that the announcement is only the start of what might be an extended commercial battle. BT rivals Sky and Talk Talk may make some gains, but BT still retains powerful influence through its monopolistic ownership of the landline monopoly in the UK.

In the dispute, BT has not exactly argued their case convincingly. Their CEO in one radio interview was emphatic about the success of their efforts at upgrading broadband services, and dismissed alternatives as too small. The regulator thinks differently.

Amongst the ironies, is the prospect of the EU passing judgement to permit an improvement in an important advanced-technology industry sector in the soon-to-be departing UK after its Brexit vote is converted into a full EU exit.


Is it Openreach or overreach?

March 2, 2016

This week’s report by industry regulator Ofcom concludes that BT will retain control over the Openreach operation, but with changes to permit more competition. We examine the arguments for complete spin off of Openreach

This is a more modest proposal than that offered by a cross-party parliamentary group which was very much in favour of splitting off Openreach to counteract what it described as BT’s monopolistic features.

In the analysis by Paul Hinks published in LWD recently., Paul concluded that if Openreach is split off from BT, and starts to either compete with rivals, or offer technologies that align with specific customer/partner needs, then really we may just have new different challenges around agreed technology standards and regulation.

BT agreed, but I found its response unconvincing. It repeated the message of the necessity for the business to have the backing of its own its powerful resources. There is something rather chilling in its protectionist tone

A Personal View

Paul sets out the strategic issues, but I would like to offer a more personal view. The BT model reminds me of the Network Rail situation. Ideologically appealing as a way of improving the sluggishness of the predecessor, the nationalized British Rail. Rail users remain unimpressed by the new system with its complex regulatory mechanisms and lack of adequate coherence ‘joined upness’ of to help customers make valuable choices.

Living with Dynosaurs

My personal experiences of both dinosaurs have mostly been frustrating. A few years ago I was locked into an apparently irresolvable four party struggle between myself, Openreach, my ISP and BT to reconnect me to the Internet. By far the most customer friendly was the ISP. I was left with the distinct impression that Open Reach would be better able to deal with me if I switched to BT and its then developing broadband system.

It took six weeks to sort it out.

Discussions on twitter (thanks to access from my local library) revealed that I was far from alone in my dissatisfaction in particular with BT itself.

It may or may not be relevant to conflate this experience with my sense that the BT huge venture to inject competition into televised sport is not resulting in a better consumer service.

I await change, bur remain less than optimistic about the leadership of BT in the vital challenges of achieving a Great Leap Forward in the necessary information highways of Great Britain.

Is it Overreach with Openreach?

Regular LWD contributor Susan Moger, Senior Fellow in Leadership,at the Alliance Manchester Business School, suggests that Openreach may risk Overreach. She notes:

What strikes me is that in managing all these ‘moving parts’ BT is struggling to cope with the changing nature of its customer base and that of a modern organisation, which BT’s Openreach is.

A good Quality high speed broadband service is a MUST for everyone now, not a luxury. In its advertising, BT has raised its customers’ expectations enormously, and is now struggling to meet them, for whatever reason.
There also appears to be an intention to manage the Openreach business in the same manner as the ‘BT in the days of copper’ ie as a command and control organisation, and this may not be appropriate.

Openreach may be a separate organisation. However, given the massive investment made BT in sports broadcasting. there is still a possibility that BT is hoping that there might be a ‘contribution’ from Openreach at some stage. In any event, underperformance and overtly bad performance by Openreach can’t help the BT brand.

Meanwhile, Ofcom’s new director Sharon White signals that BT is still under scrutiny, although there are voices suggesting the proposals need to be clearer with more specific and measurable outcomes.


The Divestment of Openreach from BT is not a simple case

February 8, 2016

It would perhaps be easy to jump on the band wagon and champion the case for freeing Openreach from its parent BT, which according to the press is a given. But in fairness, both Openreach and BT deserve credit in areas

BT is a truly world class business. It is a leader. It has delivered (mostly) on its promise to provide the UK with its Information Super Highway. But yet more change and progress is sought after.

Better apart?

The proposal to divest Openreach from BT may bring more challenges than we have today opposite speed of change and progress. More complexity. More governance and regularity issues. Investment may actually stall rather than speed up. There are no guarantees that Openreach and BT will perform better independently, or indeed that others (business customers, partners, consumers) will benefit from a split.

Openreach is already functionally separate within BT. The challenge is whether Openreach operates in the spirit of openness, or whether it favours the agenda of its parent. Would an independent Openreach really deliver improved competition or speed up investment? Would the perceived rate of change and progress – the perception of more innovation actually be delivered delivered if Openreach were no longer ‘restricted’ by BT’s agenda, governance and control? Both BT and Openreach’s customer service are questionable, but where would the real alternative appear from?

I know some {LWD subscribers] who believe that BT does trade on its monopolistic position. Ordinarily most would condemn the incumbent as the bullying type leveraging their position for self-interest. Perhaps part of this argument is true. Listening to a BT video link, I note that the speaker does acknowledge that the competition [Sky, talk talk, Vodafone?] consider the BT Openreach relationship as unfair.  Perhaps this is natural position for them to take. Of course they would. They are the competition after all.

Depending on an individual’s perspective

Depending on an individual’s perspective, BT are cumbersome, inefficient, and an abuser of their monopoly position. Or perhaps they could be seen as actually being efficient, well run, and a true global leader in a competitive market place.

IF the UK is to continue to benefit from the technology infrastructure that Openreach has built and delivers to us, then perhaps one of the most important questions Openreach needs to ask itself is whether it is investing enough cash fast enough to align to customer demands and expectations.

I believe BT does recognise and acknowledge the challenge. In the video, the speaker states that customer demands are very high. The customer asks that Super-fast broadband is always available, from anywhere, from any device. Realistic expectations? Or difficult expectations to deliver?

How quickly can BT deliver the services that the customer and the market place are demanding. Are BT and Openreach driving change and progress quicklyy enough? Maybe not, but the problem is tempered and made more complex by the fact that BT is a commercial organisation and no longer a nationalised industry. Therefore, it is right to treat each major investment decision with the correct level of due diligence and moderation before overcommitting spend and investment to services that may not be commercially viable in the short term.

Major Investment is still needed

That said, it is still of question when, not if the investment is needed. The speaker in the video talks about maximising the use of the existing infrastructure using innovative technology to deliver high speed broadband without replacing with expensive fiber. This sounds like an equitable and sensible compromise.

Fiber based superfast broadband for all may well be the next major step, and an end goal – but we need to be sensible with expectations around timescales. Some of that investment and infrastructure has already been made and is available to some lucky users. For others perhaps in rural areas, they need to wait. These are the folk most likely to argue BT needs to do more, and faster too.

With faster greater bandwidth comes downstream opportunities for all. The popularity of new services would grow faster than at current rates – for example: the move towards On-Demand content could happen quicker. Cloud is now a mega-trend. I remain convinced Cloud computing will be seen as a separate computing paradigm. Openreach and BT do deliver the services that underpin downstream Cloud provision.

BT is adapting too

We can also flip the argument around. BT themselves are now delivering content and challenging Sky with BT Sports. I do believe that TV as we have known it will continue to change and be disrupted. Openreach are in some ways influencing and controlling the rate of change because of the overall dependency on bandwidth and superfast broadband.

I’m sure there will be a shift towards faster lines and that eventually the demand will be there to justify the investment and provide the requisite return on investment. Eventually it’s just a case of getting the business model right.

Conclusions

I suppose my concluding thoughts are that investment represents a double-edged sword for Openreach. There is no guarantee that consumers or big business will take-up new more expensive services with immediate effect. This is very much a generic business statement though. No investment comes with guarantees. It’s about understanding the risk versus the reward.

Greater speeds and more bandwidth are nice to have, but in our cost conscious world I too often hear the phrase ‘is the provision “good enough”– often the reality is yes. What we have today is good enough and meets our needs.

So there is a dilemma here. What comes first, the chicken or the egg? Greater, faster investment from Openreach against the commercial reality and ‘guarantee’ of customer demand for new products.

If Openreach is split off from BT, and starts to either compete with rivals, or offer technologies that align with specific customer/partner needs then really we may just have new different challenges around agreed technology standards and regulation. These are the same issues that exist today, perhaps just in more complex forms.


BT and the phantom phone-line of Tudor Towers

May 7, 2011

Tudor Towers


Tudor Towers is haunted by a mischievous spirit which manifests as a BT telephone line. Yesterday, professional ghost-busters from British Telecomms started the exorcism process.

The playful spirit has been there since before we moved into Tudor Towers nearly a decade ago. It seems to have objected to the new phone line BT had installed for us at the time. Every so often there are manifestations. Sometimes the ghostly – phone line sends messages which are picked up by BT’s ghost-busting squad who then contact us about it.

The ghostly bill

Yesterday, [Friday May 6th 2011] there was a particularly intense episode. It was a bright Spring morning. I was working at my computer when the telephone rang. The call purported to be from BT. Or so I believed at the time. After reassurances that the caller was not selling me something, the voice from the telephone explained that there was a bill which seemed to have been unpaid for several years. I knew what she would say next. She mentioned the number of the phantom telephone line. It seemed like a normal number for the neighbourhood.

The ghostly number

I explained not for the first time that the line did not exist in the real world. The mysterious telephone number had been around from the time of the last occupant of the property, I explained, not wanting to get into ghost stories. I almost added that maybe we hadn’t exorcised it when we moved in.

BT has ways of dealing with these problems

The friendly lady said that BT had ways of dealing with these sorts of things. (“they have a ghost-busters hot-line!” I thought). I was given a magic number to mention, and was then transferred to another part of the mighty BT service department, also known as the BT call centre system.

“We are very busy at the moment”

A voice said “We are very busy at the moment. We apologise for the delay. Do not hang-up we will answer your call as soon as someone becomes available“. Then there was a beep and the message was repeated. And repeated…

The magic number worked

After a lengthy period of time a human voice got through to me. Another lady. She asked if I knew the magic number I had just been given. It seemed to work because she gave me a number to contact and helpfully said that she would put me through to this number.

“Do not hang up”

At which point another ghostly voice came on the phone. I began to wonder if it was the phantom of Tudor Towers playing another trick on me. “Do not hang up” the voice said. They were very busy at BT but would get through to me as soon as someone was available. I had been on the telephone for about twenty minutes. I wondered if they were very busy in part because of a campaign to chase down phantom phone lines…

Half an hour later

Half an hour later again, I had heard the “do not hang up” message too many times to obey it any longer. I hung up. I had lost the will to call-back on the special number I had been given. I felt that the ghostly spirit of Tudor Towers had been listening in. And laughing. Or maybe it had been responsible for the entire call?

Note to BT

I really think you need to take a look at what is going on at your so-called service centre. But don’t call me about it. Please.

Update

September 16th 2011. I think we have been now been exorcised. Another bill from BP. Another rattling around the BT call centres. My count was four this time which is too long to detail. Anyway, the bill is for the cost of BT redirecting calls from the phantom phone number to our active one. So this is why I have been getting those cold calls and being charged by BT for helping cold caller locate me.

Anyway, perhaps it’s fixed now. I have various code numbers to start the next round of conversations with BT if this has not happed. Tudor Towers are ghost free.

Why not change provider?

Get rid of BT after all that work? Like hostages, I have grown to hate and love my captors. But if some enterprising competitor of BT gets in touch…