Feeds

Make BT more transparent, say rival telcos

No need to break up BT - yet

  • alert
  • submit to reddit

Internet Security Threat Report 2014

UK telecoms trade group - UKCTA - has called for a new "regulatory model" to be adopted by communications regulator, Ofcom, that would help curb BT's market dominance and lead to greater competition in the industry.

It claimed that its "Transactional Transparency" (TT) model would, if implemented, give rival operators greater scope to compete with BT.

Responding to the first phase of Ofcom's telecoms review, UKCTA said: " BT should be required to provide its access products to all operators, including its own downstream operations, to the same specification, at the same price and using the same processes (including product development)."

Although the group - made up of a host of telcos including Cable & Wireless, Colt, Energis, NTL and Thus - stopped short of calling for the complete break-up of BT, it does want to see greater operating and accounting transparency within the UK's dominant fixed line telco.

Responding to Ofcom's question as to whether the structural separation of BT - splitting its wholesale and retail business - was still a relevant, UKCTA said that it was: "20 years after privatisation, we are still faced with an incumbent that enjoys a dominant position not only in the access network where the underlying economics make a different outcome difficult, but also in the parts of the value chain which should be susceptible to far more effective competition.

"The situation in these markets, both network markets and retail markets, of an overly strong BT able to distort competition, is not conducive to delivering maximum benefit to the citizen-consumer and the UK economy which derive from the technological revolution we are witnessing today."

UKCTA's submission went on: "UKCTA does not currently strongly support full ownership separation of BT into a regulated access network business and a competitive business. In terms of creating the correct incentives for the regulated entity to treat all its customers equally, this structure would be optimal. However, it would be slow and difficult to achieve in the face of BT opposition. Also, where the line between the monopoly and competitive parts of the network are either not yet clear or likely to shift over time, ownership separation may be less successful than TT in producing the anticipated benefits.

"Furthermore, we would observe that were full structural separation ever to become the generally desired outcome as a means of delivering benefit to citizens and consumers, the chances of a smooth and successful transition would be enhanced if BT and its shareholders are convinced that they themselves will be able to reap tangible benefits.

"Such potential added shareholder value is, in our external view, virtually impossible to measure at the moment. But if TT is comprehensively implemented as we are advocating, it will become much easier for BT’s executives and owners to determine whatever future structural strategies are in their own best interests."

Not surprisingly, BT has rejected any notion that the company should be split up, maintaining that structural separation "would not be in the interests of the UK economy, UK consumers, the telecommunications industry or BT’s shareholders".

And it called on the regulator to "end debate over this matter", which it claims "adds to the level of uncertainty in the industry and therefore reduces all players’ incentives to Invest".

Instead, BT called on Ofcom to develop a "more targeted regulatory regime that can keep pace with technological change and so ensure the UK benefits from a vibrant telecommunications industry".

It wants to see a movement away from "micro-regulation" and see the focus shift instead to the regulator dealing with "bottlenecks" and "barriers to entry" rather than on market share.

It also wants to see a regulatory regime that encourages infrastructure investment instead of relying on mandated access to networks.

Said BT chief exec Ben Verwaayen: "Many markets are now extremely competitive and so there should be a relaxation of complex regulation particularly when new services are introduced and there are no barriers to entry."

Last week, the UK's two telecoms trade unions resolutely rejected any suggestion that BT should be broken up.

Even if the separation of BT could be achieved technically - which Connect and the CWU say would be "immensely complicated" - any British Government would find it extremely difficult to bring it about politically, said the unions in a joint statement.

Instead, the unions called on Ofcom to promote investment in the network and to help consumers better understand all the different options available to them. ®

Related stories

Unions say 'no' to BT break-up
Ofcom confirms BT break-up review
Ofcom plays down BT split rumour
Ofcom broadband review says nothing new Energis
Ofcom to probe UK telecom sector
Competitive broadband could add £22bn to UK economy

Internet Security Threat Report 2014

More from The Register

next story
Brits: Google, can you scrape 60k pages from web, pleeease
Hey, c'mon Choc Factory, it's our 'right to be forgotten'
Of COURSE Stephen Elop's to blame for Nokia woes, says author
'Google did have some unique propositions for Nokia'
FCC, Google cast eye over millimetre wireless
The smaller the wave, the bigger 5G's chances of success
It's even GRIMMER up North after MEGA SKY BROADBAND OUTAGE
By 'eck! Eccles cake production thrown into jeopardy
Mobile coverage on trains really is pants
You thought it was just *insert your provider here*, but now we have numbers
Don't mess with Texas ('cos it's getting Google Fiber and you're not)
A bit late, but company says 1Gbps Austin network almost ready to compete with AT&T
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Cloud and hybrid-cloud data protection for VMware
Learn how quick and easy it is to configure backups and perform restores for VMware environments.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.