Friday, 14 December 2012

A new con from BT

BT operate as separate parts, BT Wholesale and Openreach, for example. It is all BT plc, but that is how they operate.

Openreach provide the FTTC service used for the likes of BT Infinity and for our FTTC services, as a service with a hand over in the exchange. This is linked to equipment BTW operate (connecting to a BRAS).

Openreach have a 12 month term on this part. This alone is rather annoying. BT Wholesale therefore have a 12 month term for ISPs getting FTTC. Annoying but pretending for a moment that Openreach is a separate company you can see the logic.

There is now, finally, a way to migrate BTW FTTC service from one ISP to another. Yay.

This is where the con comes in:-
  1. BT Wholesale charge the 12 month term to the existing ISP even though they are not paying this to Openreach, and are getting a new ISP to take on the service
  2. BT Wholesale start a new 12 month term with the new ISP even though they have less than 12 months term to Openreach left
  3. BT Wholesale charge us £50 to do the migrate, even though it is just a port config change on the BRAS.
These last two points surely have to be to protect their BT Retail "Infinity" product - why else?

Update: Slightly odd comment from BT regarding the 12 month term: "BTW does not get paid twice." - I suppose we may have misunderstood. We have asked for clarification.

12 comments:

  1. What I found interesting was that for a period BT Retail was offering a 'try Infinity for 3 months' offer. How was BT Retail offering a 3 month contract when every other provider in the country can only offer 12 months?

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    1. Their answer would be along the lines of

      BT Retails : "we are taking a commercial risk on the remainder of the 12 month contract, there is nothing to stop you doing the same."
      ISP : "but you aren't forced to pay if they cancel"
      BT Retail : "yes we are we still have to pay BT Wholesale, who have to pay Openreach"
      ISP : "but you're all BT PLC"
      BT Retail : "ah, but Ofcom lets us operate as different entities"
      ISP : "But you are the same company"
      BT Retail : "not for the purposes of the regulator"
      RevK : "Mr ISP please read my blog...."
      /ISP reads blog
      ISP : " Right I'm quitting to take up cat herding, its easier "

      Delete
  2. I wouldn't argue it was a con, unless a migration to Infinity didn't have these restrictions. BT can do what they want, as long as it's not unfairly promoting their retail services. I can't see how this is, unless these restrictions don't apply to moving _to_ Infinity?

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    1. Well, moving *to* infinity has no impact on my BT Group plc share dividend, does it. Insisting the existing ISP pay 12 month benefits BT plc on that. Moving away from Infinity gets BT money.

      Delete
    2. But moving *to* infinity costs BT retail £50 which it pays to BT wholesale (which are both BT PLC) so they can waive that charge and look better to the end customer

      Delete
    3. Quite - my point is that any price that BT plc charge (either as Openreach or Wholesale) is anti-competative if it is unjustifiably high.

      E.g. Imagine if, to do a specific bit of work, it costs BT plc say £10 in the amount they pay an engineer, etc, but they charge £1000. If BT Retail pay BT Wholesale £1000, then BT plc have cost only £10. Indeed BT plc would make no loss if they charged the end user only £10. However, when AAISP pay BT plc £1000, BT plc make £990 out of that in profit. Huge difference. Even with rules on treating BT Retail as if it were a separate company, the directors only have to just stay within those rules, not actually make any huge profit as that is down to their responsibility to their share holders, the ones that make when Openreach and Wholesale make lots of profit, so they can afford to spend what they like almost on costs to BT plc.

      I am not saying BT plc should not make a profit - after all, I am a BT Group plc shareholder, but whenever that profit is unjustifiably high it is anti-competative to other ISPs.

      Delete
  3. I'm not normally one to defend BT, but...

    1+2. Can the new ISP take over the remaining period, leaving say 6 months to run, or do they have to sign up to a 12 month extension form the changeover date?

    3. Even if it's only a config change, it takes time for an engineer to make that change and that engineer needs to be paid.

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    1. New ISP starts new 12 months min term with BTW. Old ISP also pays for remainder of 12 month term all at once.

      The config change does not need an engineer, it is automated, and the same as changing a DSL line for a migrate, for which they charge only £9.

      Delete
    2. the FTTC migration charge starts with an Openreach charge, BTW are passing that on.

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    3. PhilT, apart from the fact that your statement is in fact "the FTTC migration charge starts with a BT plc charge, BT plc are passing that on."

      Why exactly would there be any migration charge from BT plc t/a Openreach exactly? The FTTC side connects to a GEA connects to equipment run by BT plc t/a BT Wholesale. BT Wholesale charge an ISP for that circuit.

      When BT plc t/a BT Wholesale migrate the line from one of their ISP customers to another of their ISP customers, they do not need to involve BT plc t/a Openreach at all. There is in fact no technical change at all. Indeed, you can use one ISPs login on another ISPs FTTC line even. The change is billing and admin of the circuit from BT plc t/a BT Wholesale to the ISP.

      BT plc t/a Openreach do not need to even be told let alone asked to do anything or "migrate" anything.

      Delete
  4. RevK I would take this up with ofcom if possible, I think its quite nasty whats going on.

    The 12 month openreach contracts is clearly anti competitive and I sit here wondering why ofcom allowed it since they are supposed to promote competition, I also have been for a while wondering why isp's are charging high fees for migrations and your post explains why so BT charge 5x for a FTTC migration than they do for an ADSL one.

    The adsl market was good that a user could hope from one isp to another relitively easy from month to month if they wanted to whilst the FTTC market is very inflexible.

    This also has implications for those who dont have security of tenancy for 12+ months, tenancy agreements are commonly 6 months only.

    Ofcom are doing a conultation on contracts at the moment but they are focusing on price increases mid contract however I did mention this bad practice in their other notes box on the form asking them to review this situation.

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    1. ISPA are asking OFCOM for us as well

      Delete