A tale of a telco, a regulator and a frustrated government

Earlier this week, silicon.com reported on the UK Trade and Industry Select Committee hauling telecoms watchdog Oftel over the coals. Here, Nik Hole, who was present at the proceedings, expands on what was said, and considers the unbundling of the local loop&

The job of regulating BT isn't always a smooth and simple one. Indeed David Edmonds, director general of Oftel, this week explained: "BT, on a range of issues, has not responded as quickly as I would have wanted& I have communicated that this is unacceptable on a number of occasions." However, Christopher Chope, of the Committee, felt that Oftel had not been proactive enough, asking: "Isn't it true that by dragging their feet BT have gained commercial advantage?" The Committee continued its complaints about the pace of developments. "BT is a former public utility like Transco, constantly dragging its feet. There seems to have been eight weeks of nudges and winks, didn't it cross your mind to push?" Oftel turned the issue into a matter of pride by asking how many other EU countries are able to claim the same level of progress towards EU compliance, with Edmonds responding: "We have been working our socks off on this." The Select Committee clearly felt, as many in the industry do, that the pace of change on unbundling the local loop has been too slow and that Oftel was taking too long to consult. What impact will unbundling have, beyond telecoms companies? Alan Bell, CEO of Oyster.com, a European internet professional services company, said: "The BT monopoly is still not broken. Oftel is giving in to BT's sale spin. The industry moves far faster than legislation, which is moving too slow. Oftel has an answer for everything but won't adequately address what is needed." BT last week announced it intends to create NetCo, a separate company responsible for its network infrastructure concerns. This came in for a great deal of discussion as the Committee obviously felt the creation of NetCo could muddy the waters yet further in the short term. Helen Southworth of the Committee commented that BT had a "superb reputation of dragging things out". She said: "We would be a lot more comfortable if we knew a time-scale." David Edmonds attempted to reassure the committee saying: "I don't have a timetable yet because I haven't got full details from BT yet. There is no question of BT acting until we have carried out a full consultation process. Until they tell us what structure they want, I can't do anything or advise them." He added that it would be wrong for him "to dictate their [BT's] commercial development". After the meeting, BT gained some sympathy from unexpected quarters. Industry analyst Robin Duke-Woolley, from telecoms consultancy Schema, said: "This meeting seems to have been all about MPs trying to engage in BT bashing, with Oftel caught in the middle. I find these sentiments worrying. I can understand the MPs have a watchdog role, but are they also engaging in a constructive process of dialogue with BT?" The meeting made it clear that the MPs want changes, and want them fast. They seem fed up with BT dragging its feet and getting in the way of development. By lambasting Oftel in the way they have, they have given the regulator a powerful political mandate to get stuck into reforms and use statutory powers - mercilessly, if needs be. Everyone seems to be clear about what is needed. Oftel has to prove to the MPs and the industry that it can deliver the goods quickly and effectively, but a route forward must be formulated for BT. Constantly limiting the development of a major international telecoms player like BT serves nobody well, but the company's prevarication isn't acceptable either. BT's decreasing reliance on the domestic, fixed-line voice telecoms business will provide part of the solution, but it is far from proven that the company can challenge international players effectively outside the UK, even in cahoots with partner AT&T. Perhaps the sooner NetCo gets established and the last mile of local loop gets unbundled, the sooner Oftel and the rest of us can get off BT's back. It will then have to prove whether it is a world player on merit, or just on heritage. By Nik Hole