Sky & TalkTalk are to join up to create a fibre optic network in York that will be bring internet speeds 3 up to times faster than will be delivered by BT’s fibre optic network.
The deal also involves a third company, CityFibre, who are a specialist with fibre optic projects. The deal consists of BSkyB & TalkTalk both investing £5 million each and CityFibre claiming it’s third of the new company with a central ring of fibre optics that they have already got installed in York.
The joint venture network will install full Fibre To The Premises (FTTP) which will bring the fastest speeds to customers and will mean that the new network will aim to be able to offer broadband speeds of 1Gb (or 1,000Mb) which is currently over 3 times faster than is on offer from BT’s top package which offers speeds of 300Mb.
BT’s top speeds of 300Mb are available where BT have installed FTTP, however across most of the country BT have only installed Fibre To The Cabinet (FTTC) and for the remaining way from the streetside cabinet they use the existing copper wire to connect to houses, this way means that users are not getting a full fibre optic connection.
CityFibre agreed a deal a few years ago with Fujitsu to create a 64 mile fibre ring around the City of York and it is this that they will be building on to base this first joint venture network on.
It is expected that the first customers will be able to be connected to the Sky/TalkTalk/CityFibre network during 2015.
It is not only York who are to benefit from the trio investing in a new fibre network, there is set to be a further 2 cities also chosen where they will roll out to as well in due course.
Ofcom are to look into if BT need to reduce the price of their wholesale superfast fibre optic broadband prices after claims that they were charging rivals too much for use of their network.
In May last year TalkTalk complained to Ofcom that BT were abusing their dominant position when setting prices for wholesale fibre optic broadband and now a report in the Financial Times claims that the communications regulator will launch a consultation into the price’s of BT’s wholesale fibre optic pricing which is to be done before the end of May.
Redburn Partners, who are an equities partner told the Financial Times that:
“We think Ofcom’s margin squeeze test could reduce BT wholesale fibre prices by at least £2 per month initially, with ongoing monitoring potentially leading to further cuts.”
BT are naturally not going to be pleased with Ofcom doing their investigation, especially if it does result in Ofcom agreeing with TalkTalk’s complaints and making BT Openreach reduce the wholesale prices if charges competitors for access to its fibre network.
BT have been left in a monopoly position over the rollout of rural broadband across the country that has been part funded by £1.2 billion of public funds according to a report by the Public Accounts Committee (PAC).
The Broadband Delivery UK (BDUK) scheme was set up by the government to help fund the rollout of fibre optic broadband to rural areas where it was not financially viable for BT, Virgin Media or other providers to roll out to with just their own money. The £1.2 billion BDUK pot of money to help with the roll out to these rural areas has in effect just been sent in the direction of BT as they are the only provider to have won any contracts.
The report by PAC initially raised concerns over the way the contracts were being awarded back in 2013, at this point 26 contracts for BDUK schemes had been awarded to BT, since then the other 18 contracts that have been put out to tender have also gone in the direction of BT too. Initially there were nine suppliers who were looking to bid for the BDUK funds but most of these dropped out and left the only real remaining one as Fujitsu, however they themselves had pretty much given up too which left BT to clear up all the contracts.
Another issue is the secrecy surrounding the contracts, BT stipulated that there was non-discloser agreements in place so councils could not talk to each other to see if they were receiving a good deal or not, this then makes it likely that more tax payers money will have gone to BT than perhaps needed to if there had been more openness surrounding existing contracts in place.
The other issue raised by PAC was that the broadband maps lacked detail which made it hard for other organisations to see where exactly BT would be rolling their fibre network out to and this hindered other schemes coming in to potentially fill in the gaps or offer faster speeds. They have said that the government needs to work with local organisations to make these broadband maps able to be searched down to post codes to help make it clearer where exactly will and won’t be covered.