Feeds

Make BT more transparent, say rival telcos

No need to break up BT - yet

  • alert
  • submit to reddit

Designing a Defense for Mobile Applications

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

Securing Web Applications Made Simple and Scalable

More from The Register

next story
GoTenna: How does this 'magic' work?
An ideal product if you believe the Earth is flat
Google Nest, ARM, Samsung pull out Thread to strangle ZigBee
But there's a flaw in Google's IP-based IoT system
Orange spent weekend spamming customers with TXTs
Zero, not infinity, is the Magic Number customers want
US freemium mobile network eyes up Europe
FreedomPop touts 'free' calls, texts and data
Apple orders huge MOUNTAIN of 80 MILLION 'Air' iPhone 6s
Bigger, harder trouser bulges foretold for fanbois
'Two-speed internet' storm turns FCC.gov into zero-speed website
Deadline for comments on net neutrality shake-up extended to Friday
NBN Co execs: No FTTN product until 2015
Faster? Not yet. Cheaper? No data
prev story

Whitepapers

Reducing security risks from open source software
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
Boost IT visibility and business value
How building a great service catalog relieves pressure points and demonstrates the value of IT service management.
Consolidation: the foundation for IT and business transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.