BT’s FTTH plan is based on very fuzzy math

UK taxpayers may be on the hook for a very big bill if BT gets concessions from regulators in return for building a fiber to the home network. It seems the Brit’s telco monopoly is trying a few tricks form the US telco’s playbook by selling a lofty goal with numbers that simply don’t add up. If that’s the case, the end result will be lots of taxpayer investment, less competition, stagnating network upgrades, and higher prices. Lets hope for the sake of UK residents that  their regulators are not as easy of a patsy for the telco siren song as they have been here in the US.

Unless you’re using Enron math, BT’s new plan to connect 10 million homes — roughly 40 percent of the United Kingdom — with fiber networks at a cost of £1.5 billion doesn’t quite add up. At today’s conversion rate, that’s about $3 billion — or $300 to wire up each of these proposed 10 million homes.

BT hopes this will help it stave off competition from rivals who have started to use their new backbones and the latest technology to eat into its broadband business. Cable operator Virgin, for example, plans to use DOCSIS 3.0 to compete with BT. The incumbent has been reticent about upscaling its infrastructure over concerns that it would spend billions and then be forced to share with upstarts, the way it does now. By comparison, the new plan is closely tied to regulatory concessions and includes some sort of investment protection from Ofcom, the British regulator. (GigaOm)