BT invest 1.5 billion in Super-Fast Broadband

[chris330 0]

Reading the papers today I see that BT's new guy Ian Livingston has announced a £1.5 billion investment in super-fast broadband. Right now in the UK there is massive unemployment, very high anger levels in the backbone (read 'decent & normal') population threatening potential major civil unrest, overpopulation, largely unwanted amounts of immigrants leaching off the state, rising public interest and favour in a future major right wing party, plummeting sales in all sectors relying on disposable income due to the population having no credit or disposable income left, and large numbers of original nationals emigrating well before retirement age for a life in a new country.

Given the above rather serious points why are they investing so much money in something which would require an affluent population and thriving industry being present to profit from?

Do they really believe that things will improve that much in a few years, or are the top decision makers (read 'Ian Livingston') too scared to look like they are not acting positively to make sure they can compete with Virgin Media in what will be a major profit making venture IF the nation doesn't fall into complete collapse? After all if that is the case Livingston doesn't have to worry does he because if he can convince the main shareholders and those wealthy enough to be out of touch with reality that he is backing a sure fire technological winner then he'll be quids in and long gone by the time it all goes upside down in a few years if that is indeed what happens.

So what's the score here? Does he:

1)Know exactly what he's doing.

or

2)Have too much confidence in a future Conservative government.

or

3)Know that he's just selling good news to those who want to hear it so he can make a fast buck and then disappear before it all breaks down?

Sure I know we always hear of the concept that life always moves in cycles and the like and no matter how bad things look they always recover, boom and then drop again but what if this time it really is something new like say Germany in the late thirties. No-one could have predicted that, and that certainly didn't fit any kind of historical financial cycle. Also we hear things now about the New World Order and the like being made possible through modern communications influencing populations on a grand scale.

Is it possible this £1.5 billion is really just a government sponsored back-hander to instil confidence in the population that things are well and stave off a revolution until a more convenient time for one to occur?

I'm very confused!

[-Snafu- 77]

Quote[/b] ]Right now in the UK there is massive unemployment, very high anger levels in the backbone (read 'decent & normal' population threatening potential major civil unrest , overpopulation, largely unwanted amounts of immigrants leaching off the state, rising public interest and favour in a future major right wing party, plummeting sales in all sectors relying on disposable income due to the population having no credit or disposable income left, and large numbers of original nationals emigrating well before retirement age for a life in a new country.

Are you sure you have not exaggerated some of these points?

The situation was a lot worse in the 1970's and 1980's.

EDIT

Quote[/b] ]affluent population and thriving industry

Generally speaking we are pretty affluent.

Quote[/b] ]Is it possible this £1.5 billion is really just a government sponsored back-hander to instil confidence in the population that things are well and stave off a revolution until a more convenient time for one to occur?

We are not nearing a revolution. If we were you would certainly know about it! ie Riots, heavy Police presence, pulling troops out of Iraq and Afghanistan etc.

Quote[/b] ]major right wing party

Out of curiosity which party are you referring to?

If it's the Conservatives they have actually moved from the 'Right' to the 'Centre Right' in order to try and knock Labour from the 'Centre Right' position. Hence Cameron's 'Hug a Hoodie' campaign and then his recent speech where he said poor people only have themselves to blame. This is him trying to find a middle ground between right and left. The majority of people in the UK have centre right views. As a consequence many parties are Centre Right because they want as much votes as possible. All the parties are chasing after the same voter. The Conservatives are not right wing like the BNP for example. I would start getting worried if they were having major electoral success.

[-Snafu- 77]

Quote[/b] ]We are not nearing a revolution. If we were you would certainly know about it! ie Riots, heavy Police presence, pulling troops out of Iraq and Afghanistan etc.

“Every revolution is impossible until it happens and then it is inevitable†- which I thought was a quote from Da Man, Leon Trotsky, but Google seems not to find it as such.

DANGER! Possible ignorance ahead!

You do realise that when the Russian Revolution took place when there was a world war going on? That their economy was in a shambles because of that? Their standard of living plummeted further because of it? They lost millions of men with little to show for it? That the war dragged on which made it worse? The people had pretty much zero confidence in their leadership?

Revolutions don't tend to happen when things are good and the current situation is stable.

Until their is a major economic crash, or a world war dragging on making things hell or some other major event that's going to involve the UK (or a member of the UK even) I don't think we will be seeing Brown's head on a stick.

[chris330 0]

Thanks for the replies lads, the original post was intentionally over the top to try and gauge people's reaction to such a statement. I wanted to hear the views of intelligent people on the issue thanks all for your great input

[-Snafu- 77]

You sneaky bugger!

Hook, line and sinker!

EDIT

One major thing I have noticed in my local area is the amount of houses that have suddenly gone up for sale.

Everything is getting more expensive, especially fuel (which is really pissing people off). As a consequence of where I live at the moment I am shielded from the 'credit crunch' a tad.

*cough* Oil *cough*

[walker 0]

Hi all

Why are BT investing 1.5 billion in Super-Fast Broadband?

Four factors:

1) Business Model:

BT are in the data transmission business. If they want to stay in business they have to compete or capitulate/loose their whole business. It is do this or become extinct.

If they can put in broadband cables fast enough they can prevent new entrants from entering their market. You do this by being the biggest company with the biggest brand name; that way customers do not even notice your competitors. This is some times called a market domination strategy. And by undercutting market entrants and expanding the services BT offer faster than their competitors can afford when they come in, you prevent them from taking root, some call this a weeding strategy. AND if BT have enough capitol saved to last say five years of doing this they will outlast their competitors and probably pick up a few bust businesses on the way some call this a vulture strategy.

In the past BT's whole market strategy was prevent others coming into the data transmission market:

i) By lobbying for laws that made market entry harder, stupid phone privacy and licensed equipment laws that are nothing to do with what they say they are for and are all about preventing market entrants. Radio licensing laws a hold over from the post office era plus a finger in the Intelligence Service via Government Communications Headquarters (GCHQ) arguing pirates and spies were about to take over the UK, you can bet someone from BT has tried to argue against Skype and the like because it will help terrorists. And some post privatisation competition laws were fixed to give BT a chance in the new "Fierce" competitive world.

BT must have employed some really expensive lawyers to to help parliament draft those laws and make them as complex and intertwined with other unrelated but important laws as possible. This is a common trick used by old businesses world wide to prevent new ones coming in. Margaret Thatcher helped them a lot with all this, New Labour dismantled most of those laws in their first term; but it takes a while to change laws; that was BTs lobbying purpose, everyday that those laws were in effect was one more Day of BT monopoly so the costs were well worth it for them.

ii) ADSL or digital exchanges are what permit other telephone providers to provide a phone service. The old exchanges require all of the BT trained staff and equipment; market entrants could not afford those costs. By not putting in ADSL exchanges or going slow until they were forced to they prevented other companies offering telephone services in those areas. New Labour altered that back in about 2004/5, (it also killed off the Satellite Broadband Business I worked for too, C'est la vie; we relied on the fact that BT was preventing people from getting broadband down their phone line. When New Labour read them the riot act, we became unemployed the next day, our business model became worthless)

They also hope to gain more time to change their business model and become a content provider with TV on demand and other services, they have been working on this for over a decade.

Changing business model is a very complex and to some extent risky strategy. You essentialy have to run two business models alongside each other:

ONE is your old cash cow, in this case BTs old telephone exchanges and network; they need to maintain this while preventing other business getting into that market.

TWO you have to create the new business model which requires lots of research to find a suitable model. Then build up capitol for investment to transfer to your new business model. Then you have to invest it and run it. This can mean mergers and aquisitions as well as tens of bluesky developments most of which will fail. They can buy existing content providers, old TV companies that have descent core need revamping, though radical new companies are often better but you are usualy up against other investors for these. And they can create new ideas themselves.

2) Competitors:

Other phone companies Talk Talk and the like are coming in and taking away legacy capitol in the form of existing cable and digital exchanges, part of the changes in privatisation competition laws New Labour brought in to remove the BT monopoly Margaret Thatcher created. BT can only own and then lease any new stuff it creates so the new 1.5 billion in Super-Fast Broadband remains theirs. The legacy stuff from the Post Office and BT monopoly Era has to be available to all under the new competition laws.

Cable TV/Telephone/Broadband from Virgin offering 20mb are taking business from them already. Virgin is a fully formed and integrated content and data transmission provider.

Mobile in the form of 3G is already taking other market share and with the TV switchover to digital a massive chunk of radio bandwidth is about to become available, something like ten times as much as the current bandwidth, the technology is already there so all the mobile providers will be able to compete in the transmission of data profits in the future and content provision deals are being signed right now.

3) Customers:

Future on demand entertainment; the ability to give on demand TV/music/games/ and who knows what else needs big bandwidth. This is required for their new business model.

4) Environment:

High Oil prices mean that doing business over the wire as much as possible becomes more attractive. To do so you need to be able to transmit more data that way. In the past many tons of data spread around the UK in the back of white vans. Back in the 90s we used to ask students to answer the equation: Which is faster a T1 line or a van full of floppy disks on the motorway? At that time the van full of floppies was the faster. Broadband and data compression has reached the levels where equation is almost irrelevant. How many people now use Skype and videophone/conferencing? All those businesses used to send people in planes. More and more businesses are dropping the business flight for the video conference.

Kind Regards walker

[chris330 0]

Your replies are amazing walker, as always.

To the other lads, sorry I had to be so sneaky!!

[chris330 0]

In reply to walker:

I've completely digested your post now and what a post it is! Quite amazing what you can learn in the space of a day if you're lucky enough to catch the attention of the right people.

So bascially the only really interesting thing from a financial perspective is that the fibre optics and super fast broadband industry is set to grow and grow as it is the bread & butter future of the giant which is the communications industry.

All BT's 1.5 billion announcement means is that they are making an effort to compete. Something which savvy people like yourself knew they had to do anyway. From what I understand from your post they've just had their old technological and legal safety rug pulled by a government which believes in competition not monopolisation.

So who's going to make all the money then out of this future industry? Will it be the firms who make the fibre optic cables or is there already enough of that installed for BT to be able to rent what it doesn't have as it sounds like Virgin already have theirs installed?

Or is it BT's strategy to own all their own network hardware thus meaning they'll be installing new stuff left, right & centre? From what I hear on another forum it sounds like Virgin's pipework is close to capacity so any major new builds would mean new underground services would have to be run to them. That's probably a trivial issue though compared to what they already have in place.

If there is lots of new installation work to be done then will companies like BT have been smart enough to see this coming (I presume they will have) and have agreed contracts with manufacturers to buy fibre optic stock at fixed prices for a fixed term?

This is so interesting, I never realised capitalism had so many colourful sides to it.

[Baff1 0]

Because they are losing market share.

Their equipment is primitive by comparison and their competion are offering speeds upto 25 times as fast.

New regulation is forcing them to declare their expected speeds as opposed to their maximum possible speeds, and none of them remotely compare to the 100MB their primary rival is offering.

Downloadable content and on demand viewing are services that are expected to grow over the coming years.

Because premium services are more profitable.

[whisper 0]

Just a genuine question about the state of network in UK : what is the "normal" speed of current internet public offers?

What services are currently running on it? (phone, TV, VoD, data, Visio, etc...)

[ck-claw 1]

I think the most speed from a UK phone line is up to 8mb,

Although i live 200 metres from a BT exchange but can only get about 7mb.

Cable speeds are alot higher but cable is not availible to everyone or should i say,not every street/town has it installed.

[walker 0]

Hi all

Contention ratios are always the most important question; not bandwidth. Unless you have your own exchange or a guaranteed connection to a backbone.

Contention ratios of 50 to 1 are common in ADSL which means if every other of those 50 users in online asking for files you could drop as low as 8/50= 0.16mb or even lower depending how contention is managed and what the other customers are downloading.

You then have to question size out of the pipe from your ISP to the rest of Internet. No use having 8mb if your among 10,000 people then fitting into 10mb pipe we are back to contention ratios but this time with whole customer base of your ISP.

You then come to how good is the ISP network hardware and software Quality of Service (QoS) is what is important here and beware of the phrase best-effort that means no QoS.

Virgin offer:

2mb Free with TV

10mb standard broadband package

20mb Premium service

There is also talk of 100MB from virgin

I would say their service is very good.

As has been said ADSL is basically 8mb or less depending on distance from your exchange. That said there are some companies offering 24MB here are some comparison tables they are by no means complete:

http://www.broadband-suppliers.co.uk/index.php?broadband=comparison

This one allows you to compare on speed/price/unlimited as well as an option for your postcode and phone number. No use knowing Virgin is best if you cannot get it

http://www.ukbroadbandworld.com/

A speed test is often useful but beware of clock-watching the habit slows you down whether it is FPS broadband speed testing or waiting to leave a class/work/boring meeting.

Also worth considering is what is the full package TV/Phone/Mobile/broadband all through the same supplier can cut your costs.

Kind Regards walker

[whisper 0]

An ISP that has not enough uplink capacity for all its customers is tbh not an ISP

Also, for B2C public offers, there is no guarantee, only best-effort. At least for data traffic.

I see in your comparison charts that it's often mentionned "unlimited" usage.

Are usage limits the norm?

As a comparison, here in France, since 1 independant ISP (read, not France Telecom ) took the lead of the "no more France Telecom mandatory on Internet" few years ago, a kind of standard has emerged for ISPs offers :

- costs 30€ per month

- offers 3ple play Internet + phone + TV

- goes up to ADSL2+ througput (24M ADSL), though this is far from reliable due to ADSL technical limitations

- has no usage limit

All ISPs have aligned into this scheme, with a few differences, like France Telecom being a bit more expensive for the same options, but usually more reliable, or Free.fr (said ISP that began it all) launching all kind of new services, cable operator getting a bit higher in possible bandwidth, etc...

On the whole, the standard is around 20M 3ple play offer. Ofc, you never achieve such, I personnaly am blocked at 2.1M because I'm like 4.7km away from DSLAM with -54dB attenuation.

This has lead to a big cut down in the number of ISPs and several mergers. There are like 4 ISP left on the market, FT, Free, 9Cegetel and Numericable, in order of importance.

Today, the race is on the fiber. All are competing to get their fiber deployed before others, everywhere.

Perhaps BT is applying the same kind of logic in UK

Did it get well?

I'd say yes and no.

Prices have gone down

Bandwidth have gone all way up, very fast.

All good.

OTOH, the global quality of the service has gone haywire, both in technical and commercial point of view. You better have no issue.

When everything goes fine for you, all good, no complaint. When something goes wrong (link cut, no more phone, wrong billing, ...), then it's a bit of a quest to get the situation right again.

Call centers are horrible, and certain zones are plagued with issues. ISPs have cut budgets everywhere, you customer can feel it.

[Pathy 0]

From an economics view, i'd personally rate internet access as a service for which most people will continue paying for even as thier disposable income drops. It's become such a big part of our lives that I don't see people going without it. But thats just my perspective as a child of the internet age.

What BT is doing can be equated to investment into infrastructure, and this can never be a bad thing.

[Daddl 10]

You are aware that fast broadband doesn't just mean fast internet for endusers, but that the big telcos use the same connections to deliver voice communication (aka telephone calls), video conferences, tv programmes, video on demand services, etc.? For that you need a state of the art infrastructure or, as it has been mentioned before, you're out of business quickly.

[walker 0]

Hi all

To understand what is driving Internet growth and what may kill the golden goose.

You need to watch this.

http://www.archive.org/details/igovernance_rawfootage_l2a

A business exists in an environment.

As I have explained business in an environment seek to control it to prevent others from entering their market and competing and they will lobby for changes in law to create such an environment.

On the point of QoS it is obvious that if your total capacity is below demand you cannot provide the service. Hence whisper's experience in France where everyone offers unlimited bandwidth but there is not sufficient capacity to cope with rising demand.

So in the case of BT; they cannot provide their future content provision business model without extra capacity hence the investment.

BUT

Also consider that as more people create new content, Lessig's RW Internet from the above lecture; more content is created at less cost creating bigger demand!

The correct solution and the one that provides the biggest economic return is the one that rides this wave. That is what Richard Branson has realised, and obviously also now BT, though I think they saw it about a decade ago.

Remember this concept has already created the Internet and consider its economic power. Consider all those world leading companies that exist because of it from Google and Amazon to Yahoo Apple Microsoft Sun and IBM and all the other lesser companies and millions of organisations who now rely on it from your bank to Tescos to the company you bought your last holiday from to the BBC to your local government information site to your school or university to this very site.

Then reconsider BT's investment.

Kind Regards walker

[TrevorOfCrete 0]

Reading the papers today I see that BT's new guy Ian Livingston has announced a £1.5 billion investment in super-fast broadband. Right now in the UK there is massive unemployment, very high anger levels in the backbone (read 'decent & normal' population threatening potential major civil unrest, overpopulation, largely unwanted amounts of immigrants leaching off the state, rising public interest and favour in a future major right wing party, plummeting sales in all sectors relying on disposable income due to the population having no credit or disposable income left, and large numbers of original nationals emigrating well before retirement age for a life in a new country.

Hmm, i think you might have been reading the daily mail.  There certinly is not massive unemployment,  jobs are so easy to find (there are 678,000 jobs available in this country,  thats up 35,000 for this time last year),  infact this year has set a record for the most people in Britain in employment in terms of figures. There is not large amounts of unwanted immigrants leaching of the state (as most refugees who come here but cannot work by law,  but are also not paid money,  just given food coupons,  resulting in many of them returning home,  most other immigrants come to here to work so do not leach of the state, particularly the bulk ak EU immigrants),  infact without immigration from the EU we would now find ourselves in the middle of a large labour shortage.

I fail to see much anger,  most of it is aimed at fuel prices but can you really see large amounts of civil unrest?  personally i dont.  There is also certinly not favour for a major right wing party,  Labours failings have turned the vast majority of middle class voters to the Lib Dems and Tories,  both hardly right wing parties.  The vast majority of people in Britain still hold enough disposable income,  people are just choosing not to spend it because the overhyped chance of inflation.

The guy from BT probably knows quite a bit about his industry, he has also probably not made this decision on his own. It must make some economical sence or they wouldnt do it.

[chris330 0]

You haven't read the thread carefully enough. If you look a few posts down you will see the initial post was 'bait'

[TrevorOfCrete 0]

ahh ok, well i bit! you got yourself a 13 stoner

[chris330 0]

[walker 0]

Hi all

Further to what I was saying about bandwidth.

Watch the first part of this video

http://www.bbc.co.uk/mediase....nbram=1

It talks about the current limits on bandwidth and how our using things like video may cause the Internet to grind to a halt.

It also talks about the solutions such as the 100mb broadband that Virgin is talking about.

The future of WIFI; WIMAX that uses one aerial to replace 10s and thus reduce cost. This uses the Analogue TV frequencies I was talking about that will give us 50MB uber WIMAX LTE.

It also mentions the regulatory frameworks for those frequencies that existing companies use to prevent new technologies and hence market entrants and competition.

Here some of the accompanying text.

Quote[/b] ]Page last updated at 17:12 GMT, Friday, 1 August 2008 18:12 UKWeb speeds to increase 'ten-fold'

Dan Simmons looks at the ways researchers hope to stop the internet grinding to a halt as the demands placed on it continue to grow.

The world is hungry for bandwidth.

The first 1.3 billion people are already connected to the net and the next billion are keen to join in too.

Internet traffic is doubling every two years and there have been fears that this could overwhelm the net.

It is not about e-mail or web pages, but the demand for video and audio.

People want YouTube, TV or iPlayer (a BBC video on-demand service which is expected to account for 10% of UK traffic by the end of the year) and soon the net will be asked to deliver high-definition surround-sound TV, probably along with lots of things yet to be imagined.

"Ten years ago the internet was one tenth as fast as it is today and it was perfectly adequate and society worked perfectly well," said Andy Lippman from the MIT Media Lab.

"But with 10 times faster the opportunities to move all sorts of new data like video and voice and presence through the network immediately arose," he said. "So this is a case where we were choking off imagination."

100Gbps internet

Currently most of the cables used for the net's fibre optic backbone carry 10 Gigabits per second (Gbps) - the equivalent of about 400 HDTV streams.

 It's as if on a highway, we've squeezing four or even eight cars in the place where one car would have been otherwise

Nortel's Digital Optical Systems manager, John Sitch

But industry players like Cisco, Infusion, and Comtel say they can achieve 10 times that capacity using the same fibre optic cables...

http://news.bbc.co.uk/1/hi/programmes/click_online/7535735.stm

Follow the link to read the full story

Kind Regards walker

[chris330 0]

That's great! Thanks walker