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"Perhaps one of the most interesting conclusions was a perceived conflict of interest between having the company responsible for the UK's broadband network part

"Perhaps one of the most interesting conclusions was a perceived conflict of interest between having the company responsible for the UK's broadband network part of the same company that is a leading internet service provider." Perceived?

cdent 11y ago
Yeah, same reaction. There's nothing new in these observations. The ringfencing between OpenReach and the rest of BT has been present for quite a while. It has kept the lawyers and legislators happy and done pretty much nothing for the customer. As far as I can tell this new review from ofcom is essentially a confirmation of the status quo: Yeah, let's leave things as they are but keep our options open. Even the CEO of BTGroup pretty much said the same: We have most of these guards in place already, we're happy to work with OfCom. Translation: Thanks bros!
dangravell 11y ago
I don't quite understand why these natural monopolies are run by the private sector. I can see why you might get sub-contractors to help maintain the network, but shouldn't the infrastructure be in public hands? Is it just market dogma?
- rayiner 11y ago
  Originally, it was all just British Telecom, which was a government-owned monopoly. That was split up into BT and OpenReach and privatized in the 1980's, as part of a general market movement. Putting the infrastructure into public hands has upsides and downsides. If the public is willing to invest money, you can get a pretty workable system: e.g. the Paris subway. If the public isn't willing to invest the money, you can get a very bad system, e.g. Flint Michigan's water supply. More often than not, public ownership leads to under-investment. In the U.S., for every enlightened municipality like New York that carefully manages its water supply, there are dozens that keep water rates far too low and consequently lack the money to upgrade miles of decaying lead pipes. All told, BT OpenReach is probably one of the better ways of organizing this function at scale. It's ostensibly private, but it was privatized with a carefully-designed system of incentives to keep investing in infrastructure. OpenReach is, for example, much more profitable than Verizon's wireline division. That's why they're still at least building fiber, instead of trying to get out of the business entirely.

cdent 11y ago

Yeah, same reaction. There's nothing new in these observations. The ringfencing between OpenReach and the rest of BT has been present for quite a while. It has kept the lawyers and legislators happy and done pretty much nothing for the customer. As far as I can tell this new review from ofcom is essentially a confirmation of the status quo: Yeah, let's leave things as they are but keep our options open. Even the CEO of BTGroup pretty much said the same: We have most of these guards in place already, we're happy to work with OfCom. Translation: Thanks bros!

dangravell 11y ago

I don't quite understand why these natural monopolies are run by the private sector. I can see why you might get sub-contractors to help maintain the network, but shouldn't the infrastructure be in public hands? Is it just market dogma?

rayiner 11y ago
Originally, it was all just British Telecom, which was a government-owned monopoly. That was split up into BT and OpenReach and privatized in the 1980's, as part of a general market movement. Putting the infrastructure into public hands has upsides and downsides. If the public is willing to invest money, you can get a pretty workable system: e.g. the Paris subway. If the public isn't willing to invest the money, you can get a very bad system, e.g. Flint Michigan's water supply. More often than not, public ownership leads to under-investment. In the U.S., for every enlightened municipality like New York that carefully manages its water supply, there are dozens that keep water rates far too low and consequently lack the money to upgrade miles of decaying lead pipes. All told, BT OpenReach is probably one of the better ways of organizing this function at scale. It's ostensibly private, but it was privatized with a carefully-designed system of incentives to keep investing in infrastructure. OpenReach is, for example, much more profitable than Verizon's wireline division. That's why they're still at least building fiber, instead of trying to get out of the business entirely.