Broadband in the UK and why getting it isn’t so easy

Broadband has only been around in the UK since the millenium (well what’s know as broadband now). Prior to the rollout of ADSL (asyncronous Digital Subscriber Lines) the only way to get a ‘fast’ connection was to purchase a kilostream (64Kbits per second) or if really lucky a megastream (1Mb/s) from BT (a kilostream was about £1,000 per month). Other telcos and ISPs offered similar solutions and services at similar prices.

Kilostreams were offered over copper and megastreams could be delivered over fibre.

Many offices had megastreams over which ISDN (Integrated Services Digital Network) services were delivered – generally what was known as Primary Rate ISDN which gave up to 30 channels of voice.

There had been a growing number of OLOs (Other Licensed Operators) in the 90’s and though BT was still by far the largest operator, there was a growing number of alternative players. A ‘licensed’ operator meant that an organisation paid license fees to the then regulator Oftel which allowed them to offer telecommunications services.

Going back, BT was conducting trials of ADSL with ISPs such as Demon Internet (who at the time had the largest trial customer base of over 1,000 trial customers). This was, revolutionary 256Kb/s ALWAYS-ON Internet (though pricing was still in the order of £100 per month). Though the service was offered by someone like Demon, the underlying infrastructure was all BT, so BT would connect the customer’s line to their DSL kit and then deliver the traffic back to a central point and then deliver all the customers over a BT Central pipe back to the relevant ISP over a large pipe (a BT central pipe costed about £240,000 pa).

Meanwhile other operators wanted to offer their own DSL services and Oftel forced BT to open up their exchanges to other operators like C&W, AOL, Be, etc (unfortunately BT also pretty much dictated what Oftel could offer).

This led to local loop unbundling (LLU) and BT’s rivals could take ‘hostel’ space in a BT exchange and offer just the broadband (option 2) in which case BT would provide the telphony, or the broadband and telephony (option 4).

BT didn’t really lose here either, as all those exchanges where broadband was being offered had to be connected back to the rival ISP and generally this was done over (expensive) BT pipes.

In the UK there are 5,600 digital local exchanges (DLEs) which is where customer telephone lines are actually connected to the telephone network. In some areas these could be huge buildings as they were designed to house the old analogue telphone switches which would mean a lot of equipment. When modern System X exchanges were installed, the space requirements dropped dramatically and in some areas most of the building was sold off (like the St John’s Wood Exchange which was converted into luxury flats designed by Philip Stark).

The rival operators (who as well as competing with BT were massively competing with each other) all did their calculations and worked out that only about 1,200 exchanges in the UK had enough population density to generate a ROI so all the operators rushed to build into those exchanges (which still left 4,400 exchanges in which BT were the only operator). As this was all new, BT had to build the ‘hostel’ space to house these new operators which in some cases added months of delays before the operators could get their own kit into them, the more operators that wanted access the longer the delays as BT had to build separate areas for each one.

So until BT could open up their exchanges, BT was the only provider that could actually offer services and BT Retail sucked in as many of those customers wanting broadband as it could, the only alternative was for ISPs/telcos to offer BT’s IP Stream until the exchange could be unbundled and that meant buying expensive BT Central pipes, so making BT more money.

The rival operators missed a real opportunity, as at the time, if they’d ‘ganged-up’ and collectivity built a neutral network and that neutral provider wired up every exchange, then each provider competed on service, they would have had a network that rivaled BT’s and may well have been better (or at least more modern). Unfortunately getting two operators to agree to something was difficult, getting all of them was near impossible. All very short sighted for short term commercial gain.

Even BT didn’t offer broadband from all their exchanges as getting to remote rural communities didn’t make economic sense. To make matters worse if a local community got together and tried to build their own networks, that proved there was a market and suddenly BT would offer service there, making the community network obsolete over night.

As the market grew (and consolidated) new operators would buy a competing operator just for their unbundled exchange roll-out, such as Carphone Warehouse buying AOL.

In 2003 following EU directives in 2002, the Communications Act was introduced which also brought Ofcom into being which replaced several regulators into one large “Super” Regulator which now controlled radio, telecoms and broadcast (and subsequently Postal services).

This also brought into place a completely new regulatory regime for telecommunications and opened the market significantly. One of the first things Ofcom did was to announce a strategic review of the telecoms market (and this year, 10 years on, the second review is taking place).

The Communications Act also allowed anyone to offer network services and ensured BT and other operators would connect to new entrants. It also helped completely deregulate various services.

One major criticism of BT is that is was that it operated two separate groups, BT Retail which sold services to end-users i.e. home users, businesses etc. The other part BT Wholesale offered services to other operators.

Many in the industry felt that BT had an unfair advantage as Retail had a ‘special’ relationship with Wholesale and other operators couldn’t get access to the underlying network (there’s a spanner in the works here in that BT was rolling out their 21CN network which was the modernisation of all its network and providing modern network services over it).

Many operators wanted the underlying network split from BT (with HUGE opposition from BT) and after Ofcom’s strategic review, BT Openreach came into operation (a compromise from splitting it from BT altogether).

So now there are 3 seperate bits of BT, BT Openreach is a (virtual) separate company and it owns such things as the copper in the ground. Other BT groups are meant to get get exactly the same services from Openreach as any other operator for the same prices etc.

BT Retail still sells services to end-users and BT Wholesale sells wholesale services (B2B) which also could be to BT Retail.

Modern days

Move to the current. There has been a lot of consolidation in the telecoms, ISP and mobile markets (there probably aren’t really any pure ISPs anymore, they’re either part of a telco or offering telco services as well as Internet services).

Broadband has fallen dramatically in price, both at home, business and even over mobile. All the operators have upgraded their DSLAMs (DSL access multiplexors – the bit in the exchange) initially to ADSL2 and now to VDSL/VDSL2.

Broadband speeds are dependant on the length of copper between the DSLAM in the exchange and the router in the customer’s premises. ADSL works up to a couple of miles and ADSL2 will give slightly faster speeds at up to a mile. VDSL works inthe 100m range (up to about 100Mb/s) and VDSL2 faster but not as far as VDSL. That means rather than putting the DSLAM in the exchange (copper runs don’t run as the crow flies, they go up/down streets, then maybe to a junction box at the bottom of the next road, then back to the exchange) DSLAMs need to be installed in the junction box and if that’s in the next street it still may not give high speeds.

The quality of the lines also matters, copper is a good conductor and doesn’t really degrade over time. In 1965 Rhodesia decided to split from the UK and most of the UK’s copper came from there. As copper supplies diminished, aluminium was substituted and a lot of BT’s cables used that instead. Aluminium degrades over time and becomes brittle and it’s conductive properties also degrade which then means DSL performance degrades with it (or just doesn’t work at all). There’s still a lot of aluminium in the ground, which is being replaced, but it all takes time.

It’s now even possible to get high speed broadband over new wireless services who offer a cheap and cheerful solution which is really a resale of one of the existing UK mobile operators or a WiMAX service. Optimity also offer wireless broadband to their customers using 60GHz point to point solutions.

Unfortunately wireless is limited in coverage and may cover specific areas, but not complete geographic regions. Also you wouldn’t want high power 60GHz beams cooking the population.

The mobile networks (mobile network operators / MNOs) have spent billions to get their coverage by building masts all over the country (another win for BT who again connects everything together), but then it was part of their license obligations to do so (which also cost them billions). Though Relish and Optimity provide good coverage where they operate, they have tiny coverage areas compared to the MNOs.

People want high speed broadband everywhere, but a lot of places are still dominated by BT (in terms of network). BT are trying to roll-out as fast as possible – but it’s a HUGE undertaking and they probably get more grief than they actually deserve.

In order to offer high speed DSL services, BT need to get fibre to the cabinets in the street, they also require power. The old small green cabinets just held copper wires, usually a big bundle back to the exchange a distribution frame and individual pairs to people’s houses. The new cabinets hold DSL equipment which means they are larger. BT have to either power them locally or all the way back from the exchange. BT also has to put the fibre from the cabinet back to the exchange.

Many of the cabinets were installed a long time ago, the ducts from the cabinets to the exchange are full (with the copper bundles from all the cabinets that are served by a particular exchange. BT cant just remove a copper bundle and replace it with fibre, or all the homes connected by those copper pairs would ALL lose service and BT have a Universal Service Obligation and wouldn’t be allowed to do that).

Therefore they may have to install new ducting or hopefully squeeze a fibre into the most distant cabinet and then remove the bundle freeing more space. This all takes time.

Installing new ducting takes even more time as this may well involve digging the road.

Installing fibre to business premises has exactly these same issues.

The Greater London Authority instigated a policy that anyone digging the road (say to put a fibre in) has to post centrally that they’re going to do it and then ask if anyone else (well any utility) wants to put something in the trench being dug. This process takes time. It’s even worse if it may significantly affect traffic (like a red route) when times can be extended considerably to get all the clearances.

This isn’t the only problem with installing fibre, operators need to get what’s called a Wayleave from the landlord if they cross private ground. Landlords can be surprisingly difficult with their permission and negotiating with them can takes months of legal wrangles. The landlord of your office may not be the landlord of the actual building. The fibre to your office may cross land owned by someone else i.e. another wayleave needs to be agreed.

Though there is competition in the business fibre network, BT still has the largest network in terms of coverage. So in London even if you buy a service from a large business broadband provider, say Exponential-E, they interconnect with BT and then BT provide the ‘tail’ to the customer premises as BT are the only operator with fibre near the customers. Virgin is expanding its network, but it stalled for years with lack of funding (hopefully since Libery Media bought them this will change). Vodafone also have a large network as they acquired C&W and the companies it owned.

History sucks

The UK is actually encumbered by having over 150 years of telecoms (the Electric Telegraph Company was founded in 1846 later to become The Electric and International Telegraph Company which was nationalised in 1870). Much of the infrastructure was installed in the early years (many of BT’s London trunk routes are the old hydraulic pipes used to move steam through London to power industry). Then telephony became widespread and became part of the Post Office (many of the manhole covers still have Post Office Telecommunications on them) but widespread roll outs occurred when housing was built (after WWII in London).

The UK is compared to various countries and cities around the world, it’s not a fair thing to do. Cities in Germany were demolished by the allies and rebuilt after the war. When they were rebuilt, infrastructure to premises was considered as part of the rebuild, so as well as water, gas and other services, ducting was put in place which allowed for new services to be installed as well (such as fibre to the home).

Milan is a new build, so is Singapore and South Korea. Yes they have great super-fast broadband, but the modern building planners ensured ducting was installed everywhere.

The Government should mandate that all new builds in the UK come with ducting to each premise to cope with future services as they are needed. The ducts should lead to a central plant, which is near existing network.

More providers will want to put their own kit in the street cabinets, that requires more infrastructure to them and more complexity for BT who will have to make space for their kit. More complications mean more delays.

Some operators are providing their own fibre into the home (Hyperoptic for one), but they can’t do it just for one home user, they need say a street to agree to get broadband from them and then it’s worthwhile doing. If it’s a business, then it’s every business in the building that needs to take service to make sense.

The solution to modern infrastructure in London and big UK cities is to flatten them and start again.