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Britain's broadband crisis – The War of Words

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Comment AOL UK and Freeserve claim they will take legal action against BT if the issue of ADSL installations is not resolved. BT claims it has nothing to hide and accuses AOL UK and Freeserve of "sabre rattling".

Whether you believe this is simply a war of words or a genuine challenge to BT's hold on the future of broadband in Britain, the events of the last 48 hours have been astonishing.

For until now, the issues concerning the supply and allocation of wholesale BT ADSL products has remained largely behind closed doors.

That changed on Wednesday when, at an industry conference held in London, a senior spokesman for Freeserve went public and called the roll-out of ADSL a "national disgrace", adding that Britain's biggest ISP receives only 16 ADSL installations a day. That in itself would have made headline news.

So when a journalist from a national newspaper chimed in with figures that revealed BTOpenworld - BT's broadband ISP - had secured two thirds of all ADSL installations in Britain, the animosity that had been kept under lock and key suddenly exploded to the surface.

What immediately followed this seemingly innocent revelation was a bitter stream of anger and resentment that highlights the pent-up frustrations of an industry at odds with the incumbent telco.

Transparency - It's as clear as that

The main allegation cited by AOL UK and Freeserve centres on whether BT's competitors are being treated fairly. On the one hand, wholesale ADSL products are only available from BTIgnite. This division of BT is also responsible for carrying out the installations.

On the other hand, BTOpenworld is a competitor - a rival supplier of broadband services that also receives its wholesale product and installation from BTIgnite.

So, BT is both wholesaler and retailer...and despite all of BT's protestations and assurances that BTOpenworld is treated just like any other ISP, AOL UK and Freeserve simply don't believe that's true. BT's critics - and it has many -simply do not believe that separate divisions of the same company can be run without any influence.

They point to the fact that BTOpenworld has 20,000 customers out of a total of 30,000 ADSL-enabled users as proof, claiming the roll-out of broadband is skewed in BT's favour.

If only it were that simple

BT denies any wrongdoing. It claims the process is above board and transparent - and that it's a case of sour grapes from its competitors

Of course, it could be that AOL UK and Freeserve are receiving only 20 and 16 ADSL installations a day respectively (compared to between 300 and 500 for BTOpenworld) - because that's all they've asked for. If it's true - and we don't really know because those figures have yet to be released - then BT's off the hook, right?

Well, not quite. For the ISPs claim they are reluctant to invest millions in a marketing campaign to promote the service when BTIgnite cannot guarantee that it can meet demand. BTIgnite says: submit your order and we'll do what we can. AOL UK says this is no way to run a business.

So what started as an attack on the roll-out of ADSL is now something far more deep-rooted. AOL UK and Freeserve are publicly questioning the role of BT as both wholesaler and retailer. They claim its vertical domination of the telco market effectively allows BT to hold all the aces. And this stranglehold is limiting customer choice.

So, can BT be trumped? Can it defend its position? Based on the actions of Freeserve and AOL UK, they reckon they have a strong case - unless they are playing a dangerous game of bluff. Furthermore, AOL UK has another trick up its sleeve.

Execs at the ISP are still walking round with stupid grins on their faces after leading the fight for the introduction of a wholesale unmetered narrowband Net access product. AOL UK won that battle - it sees no reason why it can't win this one as well.

Now it's up to Oftel

However, before anyone takes their seat for what promises to be a particularly bloody scrap, it should be remembered that the roll-out of ADSL is currently the subject of an investigation by telecoms regulator Oftel.

It is set to give its ruling on the issue within the next fortnight. Following this very public confrontation, the pressure is firmly on Oftel not to delay its adjudication. In fact, it may even be pressed to bring forward its judgement to try and end the current crisis. The pressure's on for Oftel to act. It's also up to Oftel to get it right. ®

Related Stories

BT 'institutionally restricting market share'
AOL UK delivers broadband ultimatum to BT

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