'

BT could face more anti-competitive charges

BT's ADSL service could be anti-competitive according to Ovum analyst Tim Johnson

BTopenworld goes live in July, offering users 'always on' broadband services that are up to twenty times faster than ordinary modem connections for £39.99 per month. However, as BT congratulates itself on finally delivering high speed access to UK users, one analyst suggests the telco is once again, guilty of anti-competitive behaviour. BT (quote: BT) has to buy its broadband services from one of its own, post-reorganisation companies, Ignite -- responsible for infrastructure business -- in the same way as other ISPs do. However, Johnson believes there remain questions unanswered about whether the setup is fair on BT's competitors. "I'm sure anti-competitiveness is an issue," says Johnson. "BT has to sell to openworld. On the one hand it is at arm's length, but on the other it is tightly integrated." BT plays down the analyst's claims. As a retail operation BTopenworld is "outside of Oftel's loop" according to Andy Green, chief executive of BTopenworld. Green believes there are no anti-competitive issues raised by the service. "We buy at the same price as AOL and Freeserve buy it," he says. Johnson is not convinced Freeserve and AOL will be happy at the way the service is being subsidised. "BT is being very coy about the wholesale price they pay BT. It is clear it is subsidising the service to some extent. For BT, what comes in one side, goes out the other, but for Freeserve there is no double entry. It is potentially anti-competitive" The wholesale price for ADSL is £35 per customer per month but BT admits there is an extra cost. "That £35 doesn't include the fat pipe which connects from the exchange to the ISP," says a BT spokesman, although he was unable to give firm details of the actual price being paid by BTopenworld. On the question of pricing, Johnson says £40 a month is too expensive. Unsurprisingly, BT argues £40 a month is "highly competitive" despite claims it needs to be cut to £20 a month to achieve mass market adoption. The telco also claims its pricetag is cheaper than Deutsche Telekom, France Telecom and other operators. Johnson disputes this. "It is not competitive with France Telecom. The prices BT is charging are higher," he says. Speeds are also slower than other operators and BT admits users may find they are only get half the promised 512Kbit/s data stream. "As more people use it the data rate does get reduced," says BTopenworld engineer Bob Foster. He claims rates could fall as low as 256Kbit/s during busy periods. ADSL charge comparisons (UK£) (Lowest cost residential offering)

Carrier Service Curr. Rental/ month Rate/UK£ UK£ price Down-stream data rate Notes
BT BT openworld £

39.99

1.000

39.99

512 Kbps Add £150 for installation (waived for early orders.) Includes ISP charges and value added tax
Deutsche Telekom T-Online 50 DM

99

3.340

29.64

768 Kbps Service over an ISDN line. Includes modem and ISP charges. Add DM229 for installation, DM0.10/min for usage over 50 hours/month
Belgacom Turbo Line Plus BF

1900

67.950

27.96

Up to 1 Mbps Includes modem; add BF8900 for installation and BF4.13 per Mbyte of usage over 1 Gbyte per month.
Bell Atlantic Personal Infospeed US$

39.95

1.580

25.28

640 Kbps Add $198 for installation, $325 for modem, $10/month for ISP charges
France Telecom Netissimo 1 FF

219.73

11.200

19.62

500 Kbps Add FF642.62 for installation, FF37.31 for modem. Value added tax is additional.
Singapore Telecom SingTel Magix S$

35

2.700

12.96

512 Kbps Add S$30 for activation, S$150 for modem, S$0.05/min for usage over 13 hours/month
US West MegaBit Select US$

19.95

1.580

12.63

256 Kbps Add $149.95 for installation, $295 for external modem, $17.95 for ISP charges
Sources: Access@Ovum and www.point-topic.com What do you think? Tell the Mailroom. And read what others have said.
Check out ZDNet's new Interactive Broadband Guide