Eye2Eye Pt III: Oftel's Edmonds on the watchdog's future

In the final part of our exclusive interview David Edmonds talks about the future of regulation

Edmonds is keen to see Oftel as it exists now abolished and replaced by a new "converged technologies" regulator. Admitting he understands the frustration of an Internet community which sees Oftel currently taking up to half a year to solve issues, Edmonds defends his organisation vehemently and says no-one -- least of all the government he serves -- would thank him for making snap judgements.

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Do you see Oftel as a competition watchdog rather than a consumer watchdog?

Quite the opposite, but the two are hugely intertwined. The fundamental role, the role I am given in legislation, is to promote the interests of the consumer and the consumer is at the heart of everything I do.

In my dealings with Oftel it seems it is a very reactive rather than a proactive approach. You wait until you get a complaint and then you act on it. Would you say you are a proactive organisation?

I'd say we are very proactive. The best way of protecting the consumer on the whole is getting other people in the marketplace so that BT sees that there are people competing. Look at cable... cable modems give the ability for a lot of us to have an alternative in broadband and in narrowband. I think that Oftel is a profoundly proactive regulator.

Who introduced local loop unbundling? We did. We weren't responding to complaints from the media, we weren't responding to complaints from the competition. This was something that Oftel produced.

If we have a formal complaint we do act, but we do a lot of work under our own initiative and if we see issues we drive them forward. The introduction of unmetered access followed from Oftel's introduction. I think in Europe we are well up among the most proactive regulators.

Does the processes that Oftel goes through sit well with the pace of change of the Internet era? Head of the select committee described your consultation process as "lazy" and says "your complacency is quite appalling". That is fairly damning, isn't it?

No. You are taking that second phrase quite out of context. He talked about complacency being quite appalling in the context of telephone boxes and how many there were and the fact that BT rolled out only 150 out of 500 call boxes. I think Mr O'Neil's [chair of the select committee] remarks in that context were unfounded.

On the first part [the 'lazy' accusation], the consultation process for Oftel is at the heart of our way of working. Parliament would be the first to criticise me if I behaved in a way that was arbitrary, highhanded and didn't take account of people's views.

I think that in the world of the Internet you make a very valid point that new products are coming into the marketplace and new services are demanded. Oftel spends a month working out what those consequences are, produces a consultation process that gives the competitor and indeed the incumbent eight weeks to comment on them and then takes a view. That can take up to six months. But it is at the essence of a regulatory system that works within the law.

So does Oftel need different powers for the broadband era?

I think the creation of a new regulatory agency [would be a good idea]. I propose there should be an Ofcom. I think that new regulatory agency should subsume the work currently done by Oftel, the ITC and the Radio Authority.

We would look at the technology rather than the media. As a consumer you don't care about whether you are getting Internet access by digital television or broadband mobile or your PC, what you care about is that you get a service in a world that is competitive. I think there is a lot to be said regulation converging as technologies converge.

In that context, the organisation could have new powers. Oftel would disappear.

I'm arguing for the merging of the functions of Oftel. What we want this organisation to do basically is look after the interest of the consumer in a world of converged technology. I see all of the functions being thrown into the pot and a quite new organisation emerging. I am very, very enthusiastic and committed to that.

In the short term what will Oftel's role be, post BT's split? Will you regulate the spun-off businesses?

Regulation applies to the marketplace where the player has dominance. We look at whether a company can use its business weight in a way that gives it unfair advantage. We would look at what positions the new spun-off or demerged businesses would have in particular marketplaces and regulation flows from that. At this stage I'm waiting to see what comes out of the BT proposal. I want to know what's in the NetCo company, I want to know what is in the resale business and what I have said is I will consult.

Would you say that Oftel's strategy before you took over, to let competition go via the cable route, was a mistake in hindsight?

I wouldn't say it was a mistake. I think that we could have looked sooner at local loop unbundling. We could have picked it up when the Germans were doing it in late 1996, probably two years before. There was enough known about it from what was happening in the States so I suspect with hindsight that yes. I'm certainly not criticising my predecessor or the staff then though.

And my final question: are you happy that in the Internet arena Oftel has done everything to serve the interests of the consumer?

I think we have made remarkable progress in the UK. The way the NTS (number translation scheme) led to the opening up of the free access ISP market, the introduction of an unmetered product by BT, the insistence that wholesale products flowed from that [and] the unbundling of the local loop.

The Internet community is very articulate and very impatient because it works in an environment where everything happens very quickly and [everyone] is used to instant gratification. I see the ability to move in this quicker way as very important to individuals and to businesses and therefore I understand the frustration when people see delay.

I would ask for understanding. We are working our way through a incredibly complex process of technological change where we can't always predict what is going to happen. I would ask for understanding that we need to get our decisions right. What may appear to be caution to your readers, what may appear to be delay, is in fact very careful analysis and preparation, leading to implementation.

I think you are looking at an organisation that in the space of the last few years has come to understand the Internet and electronic communication in a way that we haven't had to before and has responded very quickly and has been pretty darned proactive.

Despite all the flak I have had in the last few months, I have continued to defend my organisation and will continue to do so.

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