Oftel is a joke (with a crap punchline)

Director General too nice for our good

This really is the final straw. Oftel has finally produced its guidelines on local loop unbundling. Since this is one of the most important telecommunications issues the UK has ever seen and an essential aspect to the Internet's progression, we thought we'd spend some time looking at it.

Subsequently, we have read the entire "draft guidelines" on Access Network Facilities (not a fun job). We were not impressed by what we found.

Before getting involved in the minutiae, we feel it is important to take a step back and look at it from the bigger perspective. To do this, you first have to have a look at what sort of animal Oftel is. Oftel was created in 1984 under the Telecommunications Act to keep an eye on the recently sold-off BT (it was a government-owned company prior to this). It would consist of an all-powerful Director General, free from ministerial control, who, while without direct legal powers, could effectively force companies under his remit to bend to his demands.

The very model of a model Director General

The first Director General, Bryan Carsberg stayed until 1992 and had a fairly easy time of it, making sure that Mercury could use BT's lines etc.

Things started heating up when Don Cruickshank took over in 1993. Don was previously a management consultant and he spent the next five years aggressively pushing through legislation to open up the market.

The current head, David Edmonds, took over on 1 April 1998 and was faced with the tough task of finally pulling BT away from its monopolistic power base of networks to create a truly competitive market rather than a series of smaller companies orbiting and feeding off BT's Sun.

Oftel's figurehead culture served the formidable Cruickshank well when arguments appeared, but in recent years when BT has been forced to fight its corner, the strength and consistency required by Oftel has faltered. It has frequently been accused of being weak, of pandering to BT and accepting its self-satisfying arguments to the detriment of the UK's telecommunications industry.

Once a fonctionaire...
The answer to this failure lay in the current head, David Edmonds. David has been a civil servant for almost his entire career. He studied Political Institutions & History at Keele University. During his time rooting around Whitehall, he was almost exclusively working with housing projects, and it was this expertise that led to his first commercial job at NatWest, as the MD in charge of property.

He left NatWest in 1997 after six years and then reappeared as Oftel's head in 1998. We're not saying that the skills learnt in dealing with static housing aren't directly applicable to the fast, fluid world of telecommunications, but then they don't seem to be the most complementary either. The position is chosen by the Secretary of State for Trade and Industry.

A believer in consensus and teamwork, David reorganised Oftel so it would form project groups whenever issues arose. Reports would be written, feedback sought and finally mutual agreements implemented.

It is perhaps unfortunate then that this style of leadership occurred with the explosion of the Internet. With the Net, speed and decisiveness is what is required. BT was caught on the back foot by the burgeoning interest and the huge amount of finance suddenly available to its competitors and so decided to stand and fight its ground. It turned out to be the right approach.

David Edmonds' baby is the (already open) mobile market. He is a regular speaker at most large mobile conferences and plays an active role in its formation. Let him talk for more than five minutes and it'll soon come round to 3G or wireless communications. In the mobile market, Oftel's role is as mediator, and everyone accepts the rulings as they provide useful constraints within which the fast-moving market is contained, allowing focus.

You looking at me?
The case of BT is, however, the opposite. It is one of confrontation, not mediation. BT has no intention of giving anything away unless it has to and even then it will argue for more time. Despite pressure from the press, public declarations of backing from both the prime minister and chancellor, and the threat of legislation from the EU, the Director General has still manifestly failed to put his foot down and tell BT what's what.

The belated guidelines (coming with the usual consultation promises, but this time effectively cut out due to a ridiculously short timetable) demonstrate BT's dominance in this relationship once and for all.

So what do we have? A sloppy, vague and ambiguous set of BT-slanted guidelines. Peter Bonfield and Ian Vallance, BT's head honchos, must be chuckling in their coffee.

Sure, it was delayed from the previous delay but we expected some tough talking, some hard and fast rules. There is nothing concrete in the entire piece. Timetables are variable or under the discretion of the Director General, charges can vary, BT doesn't actually even have to allow competitors into its local loops.

The implementation dates are a joke. The guidelines will officially become just plain guidelines on 8 August. Competitors are allowed to respond, but it won't do any good, because Oftel plans to make them official at the start of September. From there, BT will take orders from people for what they want where.

The Great Escape

It doesn't have to comply with either - if it can prove any one of a number of escape clauses (not enough room, lack of ventilation, security concerns, if lines need to be adapted) - and it is not obliged to fix these situations either.

Oh, and it's allowed four months from being asked to install others' equipment to actually getting around to it - bringing it neatly round to Q1/Q2 next year. If we see a piece of non-BT kit in a local loop before June, we'll eat our hat.

In short, BT can effectively dictate its terms to those wishing to use its local loop. The sole lever of control that Oftel has given itself over BT is that BT doesn't give its own services preferential treatment.

But doesn't Oftel realise that BT is building a second massive infrastructure (which, thanks to the guidelines, it will not be obliged to open up)? BT will take a hit on its services (it already has for about a year) because at the same time it is screwing the competition.

There's no working around the defensive giant and there is no legislative force that others can bring to bear against BT. If the giant does what it inevitably will and blocks anyone trying to get into its exchanges, the only recourse is the lame Oftel complaint/report system. This has already proved itself hopelessly slow and outdated.

Ha bloody Ha

The review process is also a joke. The cost of these services will apparently be set by Oftel (after discussion with BT of course) on an annual basis.

Whatever happened to the idea of a competitive market? And the worst part of all of this is that by the very act of agreeing to their flawed guidelines, BT is seen to be letting itself off the age-old obligation of providing a certain level of service regardless of location. This is a small extract:

13.1 An obligation (known as the Universal Service Obligation (USO) is currently placed on BT to ensure that a defined minimum set of services of specified quality are available to all, independent of their geographical location and at an affordable price. The USO includes the obligation to provide a connection to the fixed network able to support voice telephony and low speed data and fax transmission on reasonable request.

13.2 The Director is of the view that it would not be reasonable to apply this obligation where the customer is already receiving a voice service from another operator, either over an unbundled loop, over cable or where the customer has an existing BT line and is requesting a second.

Who're you calling reasonable?
The question would appear to be: why the hell isn't it reasonable? BT will effectively still have control of what goes on on its networks, but if anyone chooses to go with a competitor, it is absolved from responsibility. A case of having your cake and eating it.

There'll hopefully be much more poring over this issue, but if you want to have a look for yourself, the entire document can be found here.

What's our conclusion? This: at a time when it was important to get it right, to look forward to the future and plan for nationwide, quality, high-speed telecommunications and build a self-improving market around it, we have sadly been let down by a protectionist bully and a scared, spineless teacher. We sincerely hope that the EC, angered at the unequal relationship between Oftel and BT will make good its threat and force through European legislation, which (even Oftel recognises) will override this feeble set of guidelines. ®

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