BT unfazed by Oftel complaint

BT remains defiant as experts question the position of government, Oftel and the telco
Written by Jane Wakefield, Contributor

BT is sticking to its guns Tuesday despite a formal complaint to Oftel over its rollout of broadband services.

Energis and Colt are among a group of rival telcos furious at BT's unbundling and ADSL plans. The operators have lodged a complaint about what they describe as "discrimination" in BT's roll out of ADSL services. While Oftel refuses to release details of the complaint, it is believed the high price of wholesale ADSL is one of the key problems.

BT answers mounting criticism of its ADSL service, pointing to the 150 ISPs it claims are currently buying wholesale ADSL from it. "One hundred and fifty ISPs have already taken out the offer and they would beg to differ," says a BT spokesman. He maintains that the £35 per customer per month wholesale price tag is comparable with "US companies and cable operators".

Principal consultant at research firm Ovum Tony Lavender believes £35 is "too high" a price for wholesale ADSL. "On the face of it it does seem that BT has significant first mover advantage," he says. "BT is rolling out its own ADSL services in 500 exchanges but other operators will only get access in 300 exchanges and many of these are not really in the areas they want," he adds.

He believes BT should be forced to offer its wholesale product at the same price unbundled services will eventually retail at. Oftel has yet to set a final price for this but it is widely believed it will be cheaper than the current wholesale prices.

Demon is one of the 150 ISPs currently offering ADSL and it is not entirely happy with the way BT is handling the service. Back in March the ISP complained to Oftel that BT was charging a preferential wholesale rate to its own broadband operator BTopenworld. Oftel has yet to reach a conclusion about the complaint.

The watchdog will also not reveal how long it will take to investigate Monday's complaint. "There is no prescribed timeframe but we will resolve it as soon as possible," says a spokeswoman. BT claims Oftel has not yet notified it about the complaint.

Unbundling of the local loop is another key issue angering operators. They are unhappy that BT is being given until next July to make access to its telephone lines widely available. BT admits mass access will not happen until the summer but points out that trials begin in January.

This was reiterated Monday by e-minister Patricia Hewitt who claims that the UK is in line with EC policy over unbundling of the local loop. Her comments come ahead of a meeting of telecoms ministers in Luxembourg Tuesday to decide on the timetable for unbundling.

Not all commentators agree with Hewitt's interpretation of the EC's views on unbundling. "A lot of it comes down to how you read the document but the UK's interpretation is not seen as tenable to UK operators," says Ovum's Lavender.

He believes it is too late to make a difference to the timetable whatever is decided in Luxembourg. "I suspect had BT been prodded hard enough, early enough it could have been possible to move the timetable forward. Oftel didn't react and now it is too late to move it by anything other than a couple of months," he says.

With Germany, Denmark and Finland already unbundled, Lavender describes Britain as "middle of the pack" on broadband, which will disappoint the government. It is keen to see the UK in the number one spot for all things electronic.

Lavender is concerned farther damage will be done to the UK's e-commerce plans as companies making location decisions choose Germany over Britain. A Department of Trade and Industry spokesman denies that the UK is losing out. "Germany is not ahead by as much as you might think and ADSL is just one of five broadband platforms. On digital TV and 3G we are well ahead of the rest of Europe," he says.

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