BT nomination scheme to widen fibre divide

 

Gallery

By Stewart Mitchell

Posted on 3 Sep 2010 at 15:30

BT is asking ISPs to nominate exchanges to get fibre, but critics warn the scheme will widen the digital divide.

Run by BT's Openreach, the Fibre Nomination Scheme will be trialled across the UK from now until December. It will let internet providers that already buy BT's wholesale Generic Ethernet Access product - mostly large ISPs and local loop unbundling providers - nominate up to six exchanges to be enabled for fibre.

BT is getting people to sign on the dotted line to make sure they're not going to be left with all the costs

Those exchanges will be switched on in phase seven of the superfast broadband rollout, scheduled for the end of next year.

However, with a brutal looking set of financial commitments for each exchange nominated, ISPs are unlikely to choose anything but the most densely-populated and cash-rich areas.

According to BT, in return for requesting an exchange be upgraded to fibre, providers will be asked for certain commitments, which vary depending on whether BT thinks the area is worth rolling fibre out to or not.

“If an exchange is deemed to be viable for commercial deployment, the provider must guarantee that 10% of premises will be using its fibre broadband within a year,” the company said. “If this doesn’t happen, the content provider will be liable for any costs incurred by Openreach in amending its deployment plan.”

Such a system, say critics, would require ISPs to be cast-iron certain that there was sufficient demand, otherwise they face an effectively open-ended bill.

“This will only move us further towards deployments that are the most commercially viable,” said Rob Bamforth, principal analyst with research firm Quocirca. “The communications providers are only going to go where they see the lowest hanging fruit, and with the financial pressures of this scheme that will only get worse.”

Gambling on viability

In areas that BT deems to be commercially weak, the demands are even more stringent, with providers being asked to fund not only the additional deployment costs, but also to cough up for an initial survey of the area that will cost them £5,000.

BT hasn't yet said how it will decide which exchanges are considered “viable”, but a spokesman justified the policy on non-viable areas, clarifying: “What we're saying is that we don't think they are viable for us, but other providers might think differently.”

To outsiders, however, the scheme looks like an attempt to get other ISPs to underwrite the risks of rollout by asking for financial guarantees in areas not deemed suitable for fibre in the first six phases of the rollout.

“BT is getting people to sign on the dotted line to make sure they're not going to be left with all the costs,” said Andrew Ferguson, broadband expert at Thinkbroadband. “It's a bit like if they'd asked everyone on the demand-led ADSL exchange switch-on to give a £20 deposit when they signed up.”

However, Ferguson stressed the scheme might appeal to the big players like TalkTalk and other unbundlers, who were eager to get foothold in the fibre-to-the-cabinet market.