ADSL crisis - this is war

The controversy surrounding the allocation of broadband services is intensifying, with British Telecommunications and ISPs going to war Thursday.

AOL and Freeserve are furious at the revelation that BT's ISP, BTopenworld, is able to add up to 2,000 new ADSL customers per week when they claim the maximum allocation they are given is just 100 per week. Both companies are threatening legal action and calling on Oftel to investigate.

AOL has declared war on BT. "With the pitiful allocation BT is giving us we can't launch a service," says a spokesman for AOL. "BTopenworld has confirmed on record that it is getting 20 times that and, if true, it is a blantant and unlawful abuse of BT's market position. We have an army of lawyers looking at where we stand and if we have no other avenue we will launch immediate and substantial legal action."

These strong words are echoed by Freeserve's chief executive officer John Pluthero. "BT's revelation is a shocking admission that they are institutionally restricting the market share of Freeserve and other competing broadband providers. At the current, pathetic levels of allocation granted to us by BT it would take us three to four years to get to where BTopenworld says it is today," he says in a statement.

Pluthero believes the issue is serious enough for heads to roll. "BT has succeeded in making ADSL uneconomic and unavailable. UK consumers would be thoroughly justified in demanding the resignation of the entire BT board."

BT hits back, describing the complaints of AOL and Freeserve as a "case of sour grapes" because BT has successfully grabbed market share. "BTopenworld has successfully marketed ADSL but other ISPs don't seem to be pushing it very hard," says a BT spokesman.

He claims that the allocation of ADSL is "transparent, fair and equitable" and that the only reason AOL and Freeserve aren't getting the same amount of installations as BTopenworld is because they are not placing the same number of orders. According to BT, every ISP is guaranteed 40 percent of its orders and if AOL were to order the same amount of ADSL as BTopenworld it would get the same amount of installations.

Chris Gibbs, vice president of broadband products at BT Ignite, has a slightly different version, claiming it cannot guarantee 40 percent, but that it will install as many as is possible. According to Gibbs, Ignite -- the division of BT which supplies BTopenworld and other ISPs with ADSL -- has suspended the previous allocation system because it failed to respond to the dynamic demand for ADSL services. "At the present time we are accepting as many orders as an ISP wishes to put in. We are welcoming orders as fast as people put them in," he says.

Interestingly, Gibbs also disputes BTopenworld's maths. "I don't think BTopenworld are getting 2,000 installs per week," he says.

For AOL, the dispute goes beyond the telecoms arena and is set to become a political hot-potato. The spokesman calls on the government to sit down with BT to sort the matter out or risk its plans for a wired nation. "Blair talks about broadband Britain but at the current rate it is going to be stillborn," he says.

BT needs to transform itself into a keenly inspired organisation, where marketing and technical people work together to offer new and exciting services to an amazed market. Guy Kewney says -- in reality, what seems to be happening is that a bunch of dyed-in-the-wool civil service bureaucrats are harnessed to an army of jobsworth telegraph-pole monkeys who obstruct any effort made by strategists to make things happen. Go to AnchorDesk UK for the news comment.

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