Telcos, ISPs Skeptical of BT’s Ability to Change
LONDON -- British Telecom (BT) may be “talking the talk” but competitors have yet to see it “walk the walk” on giving rivals equal access to its last-mile copper loop, Commons Trade & Industry (DTI) Committee Chmn. Martin O'Neill said Tues. The committee is looking into the Office of Communications’s (Ofcom’s) strategic review of the country’s telecom sector. Both Ofcom officials, ISPs and competitive telcos said that while BT’s proposals for providing greater access to rivals sounds good, the devil is in the details.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
Last year, Ofcom said it had 3 options for dealing with the incumbent’s stranglehold over the country’s telecom infrastructure -- do nothing, refer the matter to the Competition Commission for an antitrust investigation that could ultimately result in the breakup of BT, or require the telco to change its behavior and provide “equivalence of access” to competitors. Ofcom opted for the latter, which is backed in principle by the U.K. Internet Service Providers’ Assn. (ISPA) and the U.K. Competitive Telecom Assn. (UKCTA). However, they said Tues., they remain skeptical about BT’s willingness to change.
BT’s proposals will move the debate along, Ofcom Chmn. David Currie said, but it’s too early to say whether the regulator is fully satisfied with it. Asked why industry is so skeptical about the proposal, Ofcom Chief Executive Stephen Carter pointed to rivals’ experience with the incumbent and the fact that it holds all the network cards. Industry is behind Ofcom’s call for real, equivalent access to the loop, he said, but it remains to be seen if access to BT products and services -- and a true corporate attitude adjustment -- are feasible and enforceable, Carter said.
Currie’s discussions with BT senior management appear to indicate the telco genuinely wants more competition, he told lawmakers. Still, he said, it’s a large organization and cultural change will have to percolate through all levels to be effective.
UKCTA members are very happy with Ofcom’s strategic review, but in the end they want results on the ground, said Ian El-Mokadem, managing dir., Centrica Telecom. BT’s proposal to create a separate access services division is a step in the right direction, but “there’s an awful lot of detail missing,” he said. Moreover, he said, a big chunk of BT’s response to Ofcom’s strategic review consultation document denied the need for change.
ISPA members are also wary of BT’s ability to change its anticompetitive behavior. It’s fine in theory, but Ofcom shouldn’t accept BT’s proposal as the last word, said Tiscali CEO Mary Turner. BT’s denial of “poor performance and aptitudes” was disappointing, she said. ISPs need more information on the company’s access services will work, how and when it will make cultural changes, and how those changes will be monitored and enforced.
ISPs will be “totally reliant” on BT to tell them if it’s complying with Ofcom’s regulations, said Simon Persoff, Wanadoo head of regulatory affairs. Persoff said he fears BT will claim that for some parts of its network, and some products, equivalence isn’t appropriate. He urged Ofcom not to “barter” BT services and products for some form of regulatory forbearance.
Ofcom is discussing how it will enforce equivalence of access, Currie said. If the regulator isn’t confident it can make its orders stick, it will have to consider other alternatives, he said. The DTI committee will hear from BT next week, O'Neill said, and will issue a report in 2-3 weeks. Ofcom’s final telecom review order is expected around June.