An action plan for Ofcom

Reverse LLU economics to stimulate deployment in rural areas

There are around 6,000 BT phone exchanges in the UK, of which about 25 per cent (1,500 or so) are actually viable enough for local-loop unbundling by BT’s rivals, such as Easynet, Cable & Wireless and Carphone Warehouse. Co-locating equipment in exchanges and leasing DSLAM gear is relatively cost-effective, but when you get to running fiber backhaul, your plans come slightly unstuck as it's absurdly expensive. This makes consumer unbundling only practical in heavily-subscribed metropolitan areas, where it’s almost saturated already. B2B unbundling is more favourable, but only slightly so.

LLU was stimulated by Ofcom forcing BT Wholesale’s hand, which drastically cut prices and opened the market for others to make money from cutting them out of the loop. While IPStream resellers have only just got their long-awaited 8Mb “Max” service, LLU has given us the first truly high-speed broadband using ADSL2+ and shortly will take us one louder with VDSL2. Consumers are getting a great deal. Consumers in cities, that is. Anyone not in a city or large town isn’t.

Reversing the current economics would redress the network imbalance we have now. The cost of unbundling needs to be inversely proportional to the available customer base and their distance to the exchange – the more hostile the exchange, the cheaper it is to work with. The government doesn’t want to subsidise communities but wants to empower lovely things like tele-working and convergence. Let hungry commercial operators get in there and provide unique, localised services for those who need it most.

Licence ISPs like broadcasters

John Pluthero said what ISPs knew about customer service he could write on the back of a postage stamp and, unfortunately, he was right. Most operators are content never to talk to their customers, let alone try to deal with their problems. An alarmingly large number do not even give their contact details to their own subscribers or the public. This lack of transparency or accountability is deeply worrying as limited companies appear and disappear as quickly as their bank loan for the BT central or VISP account runs dry. As we move into a new era of converged communication services, this type of cavalier behaviour is just not acceptable.

Survivors of ISPs that have gone spectacularly bust with little or no warning (often with buckets of their own customers’ money) are mounting up in the same way rogue premium-rate telephony scam artists have. BT has no interest in cutting off these customers’ accounts as they are cash cows that pay for a world of useful luxuries. As long as they are paying their bills (or the likelihood is that they will), it is up to the rest of us to deal with their cynical approach to service provision. Ask any UK Online or Bulldog subscriber – provisioning, support and billing aren’t exactly a speciality.

All tiers of ISPS need to be fully licensed on a national register in exactly the same way as broadcasters are. Operators should need a licence and have the appropriate diligence conducted on their affairs every year before they are allowed to deal with small businesses and/or the general public (consider full MPF unbundling, carrier pre-selection and VoIP services where access to emergency services is a key issue). Guidelines, practices and regulation need to be mandated and enforced by a central authority that can tighten up the shortcomings of such a fast-moving industry. Understandably, no-one is going to like being regulated, but it desperately needs to be done.

Create a compulsory migration system for triple play

The MAC code migration system has never been compulsory, but arguably it should be. Some people believe it one of the core reasons the market for broadband has been so fluid in the UK. Competition is a fact of life and particularly vicious in telecoms, and consumers searching for better deals have had access to a vital mechanism by which they can tidily and easily shop between providers. The system is far from perfect, but the sentiment is there.

Triple play is very different indeed. Given the problems with full (MPF) unbundling, absolute chaos has ensued while operators get to grips with what BT has been fluent in for years. You can live without broadband if you have the backup of a 56k modem, but when the phone or TV goes down, it’s a very different story. As work on BT’s IP/IMS project (21CN) nears completion and all ISPs move to IP-based services, we enter a realm where services based on them need 100% uptime.

We need to build a form of “passport” system that enables customers to migrate between operators but leaves their services as intact as possible. The first incidental death caused by not being able to call for an ambulance because the line was down will be a very preventable tragedy. Consumers need maximum control over who maintains this information (their migration details) and what is done with it.