Select Committee on Trade and Industry Minutes of Evidence

Examination of witnesses (Questions 200 - 219)



  200. Per customer.
  (Mr Saunders) It is in the hundreds of pounds. The issue is the trade-off between the initial cost of gaining access to the building, which is an upfront bill cost for that hostel, the cost of getting your own fibre into it or buying back haul capacity as it is called from another operator, the ongoing rental of space within the building, rental for each individual customer, and there is your own capital cost in terms of the systems you put into the building and that will vary from operator to operator. It is orientated towards the number of customers you are currently or would seek to address.

  201. Is there any physical disruption inside the exchange?
  (Mr Saunders) There may be.

  202. How many people are going to come and dig up the road?
  (Mr Saunders) There will be fibre from the operators being built into the exchanges. Hopefully it is everybody's intention to share this build as much as possible, both to reduce costs and, hopefully, to minimise disruption.

  203. So the road is only going to be dug up once outside the exchange?
  (Mr Saunders) I would not like to guarantee that.

  204. The actual customer and consumer who takes advantage of your service, do they have to have any changes to their equipment inside their office or house?
  (Mr Allan) They get a little box, a little case of their own and some wires to the exchange. Most of the disruption is at the exchange end.

  205. If I, as a customer, opt for one of your broadband services, can I take broadband services from more than one of you at the same time?
  (Mr Saunders) Over the same pair of wires, no. Clearly, if you want to have multiple broadband suppliers over separate lines that is quite feasible, even in a residential environment.


  206. You say, Mr Saunders, having gained access you would be able to get your kit in, in probably four weeks maximum?
  (Mr Saunders) Once we have established a standard mode of working with BT in terms of gaining access to get the equipment in, I think that is feasible.

  207. What are the obstacles at the moment to you getting this standard mode of approach? Is it that BT will not let you in or is it that things have not quite got to that stage yet?
  (Mr Saunders) I think it is the latter. We have not actually started the trials process yet which will enable us to identify the logistical difficulties in terms of gaining access and fitting our equipment in.

  208. Ms Machin, you are talking about four months.
  (Ms Machin) Initially for the first set of sites. I think that is probably more realistic a time frame.

  209. Can I just say to you that I visited some exchanges on Friday and I do not know if you have done that yet but you can do awful lot in four months. I do not think we are building rockets to go to the moon.
  (Ms Machin) It is not just a case of physically installing equipment. It is the operational systems to ordering the metallic path facilities that have not been tested and trialled yet. There will probably be some limitations on the local loops that will be available from those first sets of exchanges that we can go into. There is developing the marketing of those services to the target customer market within the area that you are in. I am just looking at that from the first day that you have it handed over to a realistic timescale for being able to offer services freely to the customer base initially.

  210. Would this be more a matter of Energis being in danger of biting off more than it can chew, that you are cautioning this because you are a wee bit frightened of it, that you are getting in over your head?
  (Ms Machin) We have spoken to our suppliers of the equipment and I am quoting to you what they are telling us, that initially they are looking at round about three to four months to obtain the equipment. It will take the supplier three months to obtain the equipment with a further month to install, commission and provision it for those first sites. This will obviously be improved with better forecasting and as we roll out the programme. That is what we are facing.
  (Ms Gilthorpe) Can I add a point on behalf of Cable and Wireless? There are two things, one of which is that we are already dealing with equipment suppliers to make sure that we get that part of it done in anticipation of getting into the exchanges wherever they might be and doing as much as we can up front. The trial is critical. It is unfortunate that in some circumstances some of the sites that were going to be trialled have been delayed. That is a critical phase that we go through in the learning process. When it comes to rolling out the real service, we are fully expecting it to take no more than four weeks a site.

  211. So we have a spectrum between four months and four weeks?
  (Mr Saunders) I do not think they are inconsistent. I think it is indicating that there is a learning curve to go through. Based upon our own experience within our own network four weeks is easily achievable providing you understand what you are moving into and there are no problems physically getting your equipment installed and then connected.

Mr Morgan

  212. What sort of disruption is there to the service of BT customers during this process? Presumably it is not totally risk free, is it?
  (Mr Saunders) It depends on the types of services that you are seeking to deploy. Basically you are taking over an existing line which is already used for delivering BT services or I will have a new copper pair fitted just to deliver broadband services. In the case of the former obviously there is going to be interruption. The BT services will stop and the operator will be offering their own services. Obviously the aim is to reduce that window of disruption to the minimum.

  213. I am thinking more about somebody who just happens to use that exchange, who has no interest in your service at all but just as a result of that work going on. You tell me that there is no risk of that happening at all?
  (Mr Allan) We did it last year, and whilst it was technical trials it was for the provision of DSL services and this year we did commercial trials, so it was a relatively risk-free experience. The risk of disruption of normal service for BT customers is minimal.
  (Mr Saunders) There is a technical standard that has been agreed between BT and industry which is called the access network frequency plan, which is aimed at ensuring that there is no significant disruption to services as a result of the installation of DSL systems.

Mr Butterfill

  214. We did have those assurances when the cable operators were putting cable down the streets. There are not always very good plans of exactly where these services are located and all of us in our constituencies can remember working through other people's cables. How good is the information about what goes into these exchanges and where and whether you need to do some digging up? Are we likely to have some accidental damage?
  (Mr Allan) You can never say there will not be any accidental damage, but you are not actually putting in a physical infrastructure to a household. The infrastructure is there. All you are doing is putting black boxes at either end of a copper wire so it is actually at the exchange end and then you have to get the wire into the exchange where there is a build requirement.

  215. But that is the bit that I am concerned about.
  (Mr Allan) That is the easy bit. The cable companies in terms of digging up all the roads and streets and putting wires into people's homes is the tricky bit.

  216. Can we be clear about what is physically involved? If you are putting this additional equipment in, will it require some cooling in places? Are you going to need to put in air conditioning that may not be there at the moment or improve the standard of the air conditioning? Is that going to be a requirement?
  (Mr Saunders) Part of the specification of the hostel collocation that I spoke about earlier is forced air cooling, not air conditioning, at this stage as part of the standard product. That is an issue that is being examined by the industry. DSL technology is quite power hungry so there may be instances where air conditioning is necessary and that will be identified and written into the requirements for the hostel facilities or the collocation facilities that BT is obliged to provide.

  217. Are there any cases where you may need to improve the electrical supply to deal with the additional demand?
  (Mr Saunders) Similar, yes, that is the case. Again, that is part of the process that BT and industry are working through.

  218. That could be quite difficult if your local transformer station is a long way away and you cannot get the level of power you require.
  (Mr Saunders) Again, from our own experience in our own Hull network we have been through that learning curve and it is something that the electricity suppliers are quite capable of dealing with providing you give them—

  219. In all locations?
  (Mr Saunders) I cannot speak for all locations within the United Kingdom but clearly that has to be dealt with.

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