ISPs lose as broadband Britain stays in starting blocks

Problems associated with unbundling of BT's network are losing ISPs a lot of money, leading many to question whether 'broadband Britain' will ever take off

ISPs are losing out on the chance to dramatically increase revenues because of the slow rollout of DSL services and many are questioning whether there will ever be a broadband Britain.

According to research published today, UK ISPs believe they are missing out on 50 percent revenue increases because of the problems and frustrations of opening up BT's network. A quarter have lost faith in the process altogether and don't believe high-speed broadband will be a reality for several years -- if ever.

A hundred ISPs were interviewed for the survey, which was commissioned by telco Bulldog -- one of the few remaining players left in the local loop unbundling process.

Bulldog is the only telco in the unbundling process that intends to offer wholesale services to ISPs and telcos, putting it in direct competition with BT. While some operators have blamed the current slump in the telecoms sector for their withdrawal from local loop unbundling, Bulldog has devised a new funding plan. Rather than asking investors to stump up cash in a sector it currently has little faith in, Bulldog is turning to the telcos and ISPs which it will offer services to in order to get the investment it needs to put its equipment in BT's exchanges.

The telco is still optimistic that it will cover 70 percent of the UK by 2007, but admits there will be an uphill struggle. "There have been so many problems and no-one has been able to commit because of colocation issues and costs," said a Bulldog spokesman.

Currently BT is insisting that operators interested in installing equipment in its exchanges build their own hostel rather than sharing space. Energis -- another vocal critic of the process -- has estimated that because so many operators have dropped out of the process it will cost remaining players £150,000 to set up equipment in just one exchange.

"BT obviously wants to maximise costs but there are serious implications and BT shouldn't be allowed to get away with it. Oftel needs to be more strict," said the Bulldog representative. Energis too has called for urgent action from the watchdog to put the failing unbundling process back on track.

Local loop unbundling is regarded as a key factor in bringing broadband services to a mass market in the UK. Some ISPs offer wholesale broadband ADSL via BT but recently Freeserve put up the cost of its service from £39.99 to £49.99 blaming BT and Oftel for the hike. Others claim the wholesale version is not yet fit for a mass rollout given the problems BT is experiencing with order processing and guaranteeing service levels.

A survey from the OECD (Organisation for Economic Cooperation and Development) put the UK in 21st place in the world for the number of broadband users, behind Korea, the Czech Republic and New Zealand.

In a statement, chief executive officer of Bulldog Richard Greco explained his view of broadband Britain. "The market demand and potential of DSL is huge and ISPs are clearly desperate to access the technology. It is clear more still needs to be done. Bulldog will continue to aggressively pursue the accelerated unbundling of the local loop. We are determined to unleash broadband Britain as soon as possible but need the necessary support in order to do so," he said.

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