We’ve been waiting for years for true “superfast” fibre-optic broadband, but now it’s here it seems few people actually want it. At least, that’s the impression given by Ofcom chief Ed Richards’ comments earlier this week, when he said superfast (24Mbits/sec+) broadband uptake was “still low” and largely confined to families with teenage children.

How low is “low”? We asked BT for its latest fibre figures. More than six million premises now have access to BT’s fibre lines, but only 300,000 customers have actually signed up for the service. That’s a less than impressive sounding conversion rate of 5%.

It’s even less impressive when you consider that BT Infinity fibre costs no more than the company’s most expensive ADSL package, and that the company admits to “really going for it” in terms of marketing fibre to customers. People are being offered an effectively free speed upgrade and many seemingly don’t want it.

Why can’t Britain’s two biggest broadband providers tempt more people to upgrade to the superfast speeds?

In BT’s defence, its conversion rate is much higher than this time last year, when the company had signed up only 38,000 out of three million fibre-enabled households, a success ratio of only 1.5%. And its chief rival is doing no better. Virgin Media’s Q3 financial report reveals that eight million homes now have access to its 100Mbits/sec service, but only 187,000 of its customers are on 50Mbits/sec or 100Mbits/sec lines – a conversion ratio of only 2.3%.

Reasons for refusing fibre

So what’s going wrong? Why can’t Britain’s two biggest broadband providers tempt more people to upgrade to the superfast speeds?

There could certainly be an element of once bitten twice shy. For years, broadband providers have over-egged their advertised broadband speeds with the largely fictional “up to” speeds. According to Ofcom’s latest fixed-line research, the UK’s actual average broadband speed is 6.8Mbits/sec, but the average advertised speed is 15Mbits/sec. The broadband providers have only themselves – and the ever-pliant Advertising Standards Authority – to blame if nobody now believes their speed claims.

Price is clearly a major factor, too. Virgin’s 100Mbits/sec service costs £35 a month (when taken with a Virgin phone line), but its cheapest 10Mbits/sec package costs only £13.50 – almost a third of the price. And while BT does indeed match the price of its top-end ADSL and fibre packages, you can get BT’s up to 20Mbits/sec ADSL for as little as £13 (plus line rental), compared to the minimum £28 per month outlay for fibre. When the whole country’s looking after the pennies, people need a pretty good reason to upgrade.

And what is that reason? Remember that, to date, fibre has largely been rolled out in inner-city areas, places that already had fairly decent ADSL speeds. For the average consumer (who is far less demanding of their broadband than the average PC Pro reader), there are few apps or services that would run a great deal more smoothly on a 40/50/100Mbits/sec line than they would on a 10 or 20Mbits/sec ADSL connection.  Unless you’re downloading multiple HD video streams – as you might in Ed Richards’ stereotypical teenage family – there is currently no compelling reason for the man in the street to upgrade.

The people who would surely jump at the chance of a fibre speeds are those in rural areas, smaller towns or on the edge of exchanges, for whom the jump from only 1 or 2Mbits/sec – or even slower – to 40Mbits/sec and beyond would be truly life changing. A point that was reportedly made by senior telco execs at a recent conference in Denmark. But, of course, they’re harder and more expensive to reach.

But with BT admitting its business case was based on 20% of broadband customers making the jump to fibre at this week’s Westminster eForum – four times its current conversion ratio – you can’t help but wonder whether it may regret taking the soft option first.

The headline figure is £830 million of Government money being ploughed into the project, up from the £530 million announced in the Comprehensive Spending Review a few weeks ago. Except closer inspection of the figures shows there’s no new money here, just some creative accounting.

The Government is stripping £150 million a year from the BBC’s licence fee pot to help fund next-gen broadband. Because the Comprehensive Spending Review only runs until 2015, the Government only accounted for two years’ worth of BBC contributions in its previously announced £530 million figure.  But because the Government’s broadband plan stretches to 2017, it can add another £300 million to the headline figure and make it look like new money, even if it’s just a rehash of previously announced plans. Cunning.

So what’s it going to do with all this money? Invest £50 million in a “second wave” of projects to deliver next-gen networks in rural areas, based on four pilot-projects that it’s already commissioned. So nothing new there then.

It’s also going to hand out 800MHz and 2.6GHz spectrum to facilitate the development of superfast mobile services – again, exactly as it announced in the Comprehensive Spending Review only a few weeks ago.

The only genuinely new announcement is the idea of creating a “central digital point” in every community, presumably a fibre connection that local residents and businesses can feed off.

What does the Government mean by a “community” – a town, a village, a telephone exchange? It doesn’t know. “We haven’t set out what we mean by a community,” a Department of Culture spokesman told me. “The likelihood is a village or hamlet will be considered a community, three houses at the top of a mountain won’t.”

“It’s not possible to define that and we’re not going to do so,” he added. And if it’s not possible to define it, it’s not possible to measure it either, which is convenient.

Even if the Government does manage to get a fibre hub into most towns and villages, there’s no guarantee your house or business will be connected. “Communities would then take responsibility for extending the network to individual homes,” the Government’s announcement states.

Joined-up Government? That’s not even close.

For the past couple of days I’ve been with BT in Northern Ireland, visiting homes and businesses that have been among the first in the UK to be hooked up to BT’s fibre broadband network.

If you’re one of those people who can’t understand why Britain needs a decent high-speed network, or think that rural campaigners are greedy for demanding proper broadband in their area, you should listen to the stories from the people we visited in Northern Ireland.

People such as Paul Sherry, Hugh Morgan and Joseph Ireland – three ambitious young men who set up their own company while midway through their degrees, because they could see that there would be no jobs in the flagging construction industry waiting for them when they finished their studies.

They run Energy Assessments NI, a company that certifies the energy efficiency of new buildings as required by EU law. Much of their work involves sending and receiving large architectural drawings over email, or delivering certificates electronically to their customers – tasks that are painfully slow or just aren’t possible without a decent broadband connection.

On their rickety old ADSL connection, it could take 15 minutes just to upload one of the files spat out by their software – if it even uploaded at all. Now, with the 10Mbits/sec uploads on their fibre connection, that file is uploaded in seconds, allowing them to correct errors instantly and get on with the rest of their work, not sit staring at a stuttering progress bar.

Because they’ve now got a broadband connection worthy of its name, three young men who would otherwise have joined the ranks of the unemployed can compete for valuable contracts with councils across the UK

And so, because they’ve now got a broadband connection worthy of its name, three young men who would otherwise have joined the ranks of the unemployed can compete for valuable contracts with councils across the UK – all from a modest, low-rent office in their hometown of Newcastle.

Then there’s John Paul Annett, who runs a picture framing business and garden centre in County Down. The bulk of Annett’s business involves downloading images over the internet, then printing and framing the artwork for retail customers across the UK. Because uploading high-quality images on his old ADSL connection was so horribly slow, Annett used to showcase the company’s wares in glossy catalogues that cost about £6 each to print. Now, with a decent fibre-to-the-cabinet (FTTC) connection installed in his remote factory, he can send them out via email in the PDF format. “If you can send them by email, it saves you a fortune,” he told me.

Reduced printing costs aren’t the only benefit: when interior designers ring up asking for examples of his work, he doesn’t have to ask them to wait two days for the catalogue to arrive in the post. He can email them a brochure or high-res JPEG of a bespoke frame he has in mind and clinch a deal that, previously, the buyer would have almost certainly have got bored of waiting for.

It’s also been possible for his in-house web designer to add short videos of their work to YouTube, so customers can see the care and workmanship that goes into his picture frames. “The frustration factor’s gone,” said Annett.

The Energy Assessments trio and Annett are the lucky ones: beneficiaries of a forward-thinking local minister, an EU grant, and BT’s decision to match public money with its own to bring fibre to the vast majority of Northern Ireland’s businesses. The rest of the UK’s rural regions aren’t as fortunate, with many still running on dial-up quality connections that literally cripple their livelihoods.

BT plans to cover two thirds of the British population with fibre by 2015, and while that’s encouraging, it’s not enough. While the Government still fiddles with regional broadband pilots and spends months trying to define its own, ridiculous targets, businesses are going to the wall – or not even starting in the first place – because their internet connections just aren’t fast enough.

Whether it’s BT or Virgin, our own Government or the EU, a combination of all four or someone else entirely – someone needs to find the money to deliver fibre right across the country.  We can’t afford not to.

Why, you might well think, do I have to wait that long? I was despatched to one of BT’s FTTP trials in Milton Keynes to find out how much work goes on behind the scenes, and this blog post will reveal everything you need to know — probably more than you ever wanted to know — about the labour put in by engineers to get a tiny little cable to your home.

Two things to keep in mind: first, Milton Keynes, being a newish sort of place, has a well-planned duct system, making the trial a bit more straightforward than it could be in other locales. FTTP in older cities won’t be so easy or even possible, while others will get fibre access over telegraph poles instead.

The other thing to remember is this: fibre is really, really thin. Surprisingly so.

The fibre in that picture isn’t the coloured bits — it’s the thin, hair-like strand sticking out of the end. The coloured material is to protect the delicate fibres.

The trial requires all-new cabling and the use of subducts, where the fibre is squeezed in alongside existing infrastructure. While keeping cables small is easier with fibre because it’s so thin, that also makes it breakable, so protective cables need to be thick enough to keep the fibre safe.

From each exchange in the test area in Milton Keynes, cables with a dozen fibres feed out to a splitter. There, each is fibre is spliced and split out to supply 32 customers — although BT usually keeps two aside for backup.  The fibre winds its way through tubes in subducts to a local distribution point and a device called a manifold, which shares the fibre connection out to up to a dozen properties, but usually about half that.

(See that little hole in the wall at the top of the picture? That’s where all the cables need to go through. The device on the left with the cables feeding in is the distribution point, while the black tube on the right is a manifold.)

If the thinness of fibre makes it seem easy to handle, don’t be fooled. All the cabling is pulled through ducts by hand: no machinery can do it properly. That’s no small thing, as in the trial area in Milton Keynes alone, there’s 600km of cables as well as 4,000 manifolds and 1,000 distribution points to install — all to bring fibre broadband to 11,500 homes. Even if you don’t know what all that equipment is, the point is there’s a lot of it.

The fibre isn’t in the cables when it’s pulled through, however. The fibre cables are blown through the duct tubes using compressed air. Because this can be done over some distance, and BT would rather not shell out for a engineer just to stand at the end of a tube and wait for fibre to slide out, the system texts the engineer when it’s time to stop blowing, so the right amount of fibre is sent through.

(Fibre after it’s blown through a tube. Exciting times.)

All these bits of fibre — from the exchange to the splitter to the distro point to the manifold and then to the premise — need to be connected up. This is called splicing, and is rather like gluing together the ends of two pieces of hair.  The engineer carefully strips off the fibre’s protective coating, exposing the actual fibre — which is easy to break and easy to get lodged in your skin.

The exposed fibre is cleaned with rubbing alcohol — the engineer actually listens for a squeak to make sure it’s clean — and the ends cut so they’re square, before being slid into a small box called a fusion splicer, which lines everything up and joins the ends. Watching the screen (see the picture below), shows the fibre ends being adjusted up and down until they line up perfectly, before the screen is filled with a satisfying sci-fi blast of white light, and the pieces are fused together.

BT tolerates a loss of up to 0.05db in the splicing process, but this machinery is so handy to use that I managed to join two pieces of fibre with just 0.03db loss on my first — heavily-coached — try.

When BT rolls out FTTP, it installs fibre from the exchange all the way down to the manifolds, but pauses there, only installing the last several yards to the house once the customer has coughed up the cash. “We’ve got to give the facility to every house,” noted one BT engineer. “It sits there dormant until such a time as a customer puts his hand up and says ‘yes, I want it’.”

Once the customer opts for the FTTP service, a specialised engineer comes out. Over the course of seven hours, he or she blows fibre through to the customer’s house, splicing the fibre to an external connector attached to the side of the customer’s wall, which connects to a lead internally to the “optical network terminal point” inside the house — essentially a BT-branded box with (hopefully) blinking lights and ports to plug a router into.

And if you’ve got one of these in your house, consider us jealous, because it means you’ve got BT’s FTTP.

There are two ways to get hold of this information:

Sam Knows Broadband has an excellent Exchange Checker that tells you if and when BT plans to lay fibre in your neck of the woods, as well as providing detailed information on the availability of ADSL, cable and LLU providers in your area. To see if fibre’s coming to your area, enter your postcode, scroll down to the BT Wholesale section, and check the date alongside “FTTC status”. (FTTC stands for fibre-to-the-cabinet, BT’s up to 40Mbits/sec fibre service.)

BT Openreach, the division of BT responsible for network deployment, also publishes a PDF document with the full list of exchanges on its Super-Fast Fibre Access Site. Click on the “Where and When” link at the top of the page to download the list.

It’s worth noting that there are some discrepancies between the two sites. For example, SamKnows claims my local Burgess Hill exchange will be upgraded in December 2010; BT’s list says we won’t get fibre until March 2012. The culprit, I suspect, is that little asterisk next to Burgess Hill and many other towns on the BT list.

The footnote explains that sites marked with an asterisk have had their fibre rollout delayed as BT’s plans have changed. “No exchanges have been removed from the list and we are still planning to deliver fibre to these areas by the revised date shown in the table,” BT explains. In other words, don’t hold your breath.

For many years now, BT has been claiming it simply cannot afford to deliver fibre broadband to large parts of the country. In 2008, the Broadband Stakeholder Group claimed it would cost £5.1 billion to deliver nationwide Fibre To The Cabinet (FTTC) – a figure that BT itself has repeated in public.

However, a press release issued by none other than BT today provides a fascinating insight into the economics of fibre broadband – and casts some doubt over the accuracy of those lofty figures.

In what BT describes as a “fibre triumph”, a local council in Kent has contributed to the cost of deploying fibre in the village of Iwade. According to BT, the council stumped up £13,000, which “unlocked” £62,000 of investment from the telco, meaning it cost a total of £75,000 to bring fibre to each of the village’s 1,350 premises.

Those figures (which I’ve double checked with BT) mean that it cost £55.56 per property to bring fibre to the village.

Extrapolate those figures nationwide – and I realise there’s enormous danger in doing so – and the figures become even more interesting. There are about 25 million residential properties in the UK, and although I can’t find a reliable figure for the number of business premises, there were 2.1 million registered enterprises in 2009. Let’s assume an average of two buildings per business, and we’re looking at 29.2 million premises across the country.

So the total cost of delivering FTTC to the country is:

29.2 million x £55.56 = £1.622 billion

That’s a hell of a lot less than the £5.1 billion projected by the Broadband Stakeholder Group, even if the business premises assumptions are a bit skew-whiff.

Questionable figures?

Now, I accept that basing nationwide figures on the experience of one small village is dubious. As a BT spokesperson told me this morning: “That figure is unique to Iwade,” and the economics of each location vary on a case-by-case basis.

What’s more, “In the case of Iwade, three of the four [telephone] cabinets in Iwade met the BT Openreach business case for FTTC enablement but a fourth did not – by providing public funding to bridge the gap in the commercial case, Iwade’s Parish Council has taken action to ensure that the whole village can benefit from super-fast speeds.”

Nevertheless, BT’s spokesperson also admitted it would be fair to assume that rural Iwade wouldn’t have been included in the two thirds of the country BT has promised to fibre by 2015. That means it’s in the most expensive third of the country – the areas where BT says it can’t afford to invest by itself, meaning the cost of laying FTTC to two thirds of the country is likely (and I stress likely) to be much less than the £55.56 per head it costs in Iwade.

There will, of course, also be a fair number of very remote areas where there’s only a handful of houses on each cabinet, where the cost per head could well run into the hundreds or even thousands of pounds.

New hope

That said, if the experience of Iwade is even remotely close to typical, then the cost of bringing up to 40Mbits/sec fibre to the entire country is much less than first thought. Indeed, the fact that BT recently increased its rollout from half to two-thirds of the country by 2015 suggests that the company isn’t finding the costs prohibitive either.

The Iwade experience also makes you wonder how many other towns and villages are being left out of the fibre broadband loop, for relatively paltry sums. If £13,000 – the cost of a cleaner at the town hall – is all that’s needed to trigger high-speed broadband in some rural areas, I expect many councils would write the cheque tomorrow. Especially when small businesses are moving out or going to the wall because they can’t get reliable broadband connections, as is the case in South Derbyshire and many other areas.

The problem is BT’s keeping everyone in the dark about the bulk of its fibre plans. It says it will reach two thirds of the country, but won’t reveal which two thirds: only a few hundred exchanges have been identified to date. How are councils meant to work out if they should pump public money into fibre broadband if they don’t know whether it’s going to reach their area or not?

The BT spokesperson urged councils to talk to their local BT Group Regional Manager and find out how much it would cost to bring fibre to their area, and insisted that “Openreach will not take public or private money for cabinets and exchange areas that [already] meet its business case”.

But BT owes it to the public to announce which exchanges will be covered by its fibre rollout – and when – as soon as it possibly can, so that we all know where we stand.

BT’s fibre lines use VDSL, rather than the ADSL used to power today’s broadband.  That means BT can’t just flick a switch in the exchange like it normally does with ADSL upgrades: it needs to come into your home and fit a new faceplate on your master telephone socket.

The bad news is that with this set-up you can’t run your router off extension wiring any more – it must be plugged into the master socket. That’s a bit of an issue if, as in many homes, your master socket is inconveniently located in the hallway or kitchen. Not many people want their router sat next to the coat stand, and it’s a pain in the buttocks if you prefer a wired connection from your router to devices such as your PC or games console.

The only way round this is for BT’s engineer to run another length of Ethernet cable around your house, in what BT’s rather quaintly referring to as a “data extension kit”. BT says it will provide up to 30 metres of wiring to help people move their router to a more convenient spot as part of the standard installation fee (£50 on some tariffs, free on others), but adds that it will “assess the pricing options based on predicted demand levels”.

In other words, we’d better hope that not too many people want the extra cabling…

The amount of money on the table is derisory. BT is spending £1.5 billion on bringing fibre-to-the-cabinet to 10 million homes across the country, and BT is (so far) concentrating on urban areas where deployment costs are lower. Does the Government really think it can bring even 2Mbit/sec broadband to the whole of Britain on a sixth of the budget?

Actually, no, it doesn’t. The Chancellor’s woolly Budget report claims that “If necessary, the cost would also be met through additional funding mechanisms, as set out in the Digital Britain Interim Report.” In other words, fixed and mobile broadband providers will be expected to foot the bill. But as Communications Minister Lord Carter told The Telegraph earlier this week, “there will certainly be 25-30% of the country where there will be no economic case for building a next-generation fixed network”.

While the unambitious target of 2Mbits/sec is hardly the “next-generation” network Carter refers to, it’s clear that the Government has already given up on high-speed networks in rural areas, and will settle for connection speeds that aren’t even fast enough to run the HD streams from the BBC iPlayer in vast chunks of the country.

Is that really a massive problem? It most certainly is, because as Carter concedes in that same Telegraph interview “in less than 10 years, we will be in a complete ‘on demand’ television world.” Except for those who haven’t got the broadband speeds to cope, of course.

“Lord Carter talks of a video-centric world,” argues Henry Aubrey-Fletcher, president of the Country Land and Business Association.  “In reality we have a world where social and economic deprivation is growing because of a lack of access to fast internet connections.

“The economy is being divided because many rural businesses simply cannot compete with their urban rivals. School classes are split because of some children’s inability to do set homework online. Communities are being divided because people are seeking to move to a home that has broadband.”

Digital Britain? Only if you live in the right parts of it.  

“I have to tell you there are some shareholders who say ‘you know something, don’t do that, don’t do a whole lot of other things. That leaves you with a lot more cash and cash today is worth a lot more than cash in a few years’ time. I personally believe if it is the right thing to do as a 20-year decision it is the right thing to do. But we need to have the environment in which our shareholders feel there is a good chance of us making a return. If we cannot have that environment this is not the time to be taking on sure-fire losses.” – BT chief Ian Livingston quoted in The Guardian today.

Not looking quite so bold now, is he? 

The company says it’s prepared to spend £1.5 billion to bring high-speed broadband to ten million homes by 2012, but that depends on “ “a supportive and enduring regulatory environment”. In other words, give us what we want or we’re taking our football home.

That puts Ofcom in a no-win situation: if the regulator puts it foot down, it will be accused of stalling Britain’s broadband network; if it gives BT carte blanche, the former monopoly’s rivals will be crying foul.

BT has already demanded access to Virgin’s cable network in an exclusive briefing with PC Pro. What else will it demand in its negotiations with Ofcom? Oh, to be a fly on the wall in those meetings…