BT's fibre optic network
In 2008, BT released its intention to heavily invest in a network of fibre optic cables throughout the UK, making ultra-high speed connections possible for a significant proportion of the population.
The company aims to invest over one and a half billion pounds before 2012, providing its new level of service to around ten million people, and providing around half the population with some form of higher speed service than currently.
The service is expected to run at a theoretical maximum of 100Mb which is twice that of the current highest speed offered by any of its rivals (only available from Virgin Media, in cable-ready addresses) - although other customers may be offered a speed of around 50Mb. The intention is that this level of speed will make possible a whole new era of network communications, whereby fully interactive television will become the norm, delivered by internet rather than radio frequency.
A stumbling block of the roll out of this new network has been regulations surrounding the industry infrastructure as a whole. At present, BT has a virtual monopoly on the physical network throughout the UK.
It now operates this as a separate division, BT Openreach, which has responsibility for making sure all network operators have fair access to BT's physical network. BT is able to make money by charging other operators for use of their network.
The new fibre optic service essentially means laying new cables into all areas concerned, which has meant it has presented an opportunity to challenge the status quo. Virgin Media, in particular, have claimed it is unfair that BT alone should be allowed to profit from a new network in perpetuity, when Virgin has invested to establish its own cable network.
BT is concerned about investing in such an expensive network if if is not allowed to recoup its investment by profiting from the sale of bandwidth in the traditional way. This has been made an even more serious issue since the economic events of late 2008, with some BT shareholders expressing their desire for BT to turn their back on the investment for the foreseeable future, something the company's CEO has declined to do.
The UK Government has hinted that it may be willing to support the investment needed in high speed internet if it becomes apparent this is a requirement. The government has an existing pledge to deliver 2Mb speeds to all homes in the UK by 2012, although there is concern this will no longer be viewed as an acceptable minimum.
Technology such as wireless broadband has been considered as an option for delivering this, but is currently seen as expensive and unreliable. Many in the industry believe that only a fully supported national fibre optic network can deliver the type of network usage that is currently physically possible, but that are made impractical by poor broadband speeds.
BT has started physically laying the new network in test areas of the UK. For example, ten thousand newly built houses in Ebbsfleet Valley, Kent, will be amongst the first to enjoy the new service; the lines having been laid in January 2009, with over 30,000 more people expected to be connected in parts of London and Wales throughout the year.
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