A leading member of the government's broadband advisory group believes broadband infrastructure might be better off left in the hands of one or two dominant companies like British Telecommunications, undercutting efforts to step up competition for high-speed Internet services.
Peter Radley, chairman of one of the committees of the Broadband Stakeholder Group, said that the UK economy is too small to allow for more than a few broadband infrastructure companies. He told the Financial Times that the important factor is not competing infrastructure providers for a single technology, like ADSL, but rather that consumers have access to several different technologies, including cable-modem access and satellite.
"What matters is competition at the retail level," Radley told the FT.
The remarks fly in the face of long-standing efforts to open up local telephone exchanges to competing telcos, the so-called unbundling of the local loop. The original deadline for unbundling passed on Saturday, but not many exchanges have been opened up, and interest among competitive operators has dwindled.
One of the few companies set up to compete against BT in the ADSL wholesale market, On Cue Communications, folded last week.
At the same time, the state of broadband access in Britain has been criticised from all angles. Studies put Britain at near the bottom of the league in the public's takeup of broadband, and the government's e-envoy recently called for lower prices to encourage users to make the leap.
Oftel, the telecoms regulator, has been criticised for moving slowly on unbundling and other issues, but may be ready to force BT to lower its wholesale ADSL prices.
The Broadband Stakeholder Group was set up by ministers to help guide government policy, and will deliver its recommendations in September. Radley is chairman of the UK arm of Alcatel.
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