Original URL: http://www.theregister.co.uk/2007/06/04/bt_speed_wars_over/

BT declares ceasefire in broadband speed wars

Users don't care about speed, telco claims

By Christopher Williams

Posted in Broadband, 4th June 2007 14:12 GMT

BT is aiming to push access speed down the broadband agenda as the copper wires which carry data into homes swiftly approach their technological limits.

The firm, which announced record profits last month, is maintaining its party line on fibre to the home, that it is a "UK PLC issue", rather than a matter for the national telecoms network owner alone. Instead, it will push broadband as an "application driven" service, which it reckons will help it compete with rivals who have unbundled the local loop (LLU) in exchanges to give them cheaper access.

Angus Flett, BT Wholesale's director of product management, said: "I think the speed wars didn't provide value for customers...as long as the service works [they] don't give two hoots about speed."

BT's success in rolling out IPTV over its network shows that "application driven" service is more important than raw pace.

Critics have charged that BT is under-investing compared to telcos in South Korea and on the continent, who are rolling out fibre optics to the home, offering up to 100Mbit/s access. BT denies the claims, but has published no plans to offer beyond 24Mbit/s ADSL2+ over its new 21CN backbone.

Flett said: "If you do VDSL2 [a technology which offers up to 100Mbit/s without upgrading the 'last mile' copper wire], then you have to do fibre to the cabinet, and if you do that then the economics mean you might as well do fibre to the home."

Recent controversies over bandwidth throttling have highlighted how access to the broadband network is more complex than many consumers appreciate, particularly as greater strain is placed on the infrastructure by the growing popularity of video and other bandwidth-hungry applications.

BT plotted its change in tack back in 2005, but it's been gradually nudging the rest of the ADSL market to jump on board. It has announced it will bin its range of fixed speed wholesale broadband products, and offer only its "Max" service, which is currently theoretically capable of 8Mbit/s, but is highly variable based on environmental and network conditions. BT calls the management technology "smart broadband", and says the stability of the service it offers distinguishes it from LLU providers like TalkTalk and Sky.

Flett said: "Am I going to be the cheapest? No. Regulation makes sure I don't kill LLU." BT recently lost out on one of the biggest potential wholesale contracts when Virgin Media signed to Cable and Wireless' LLU service to allow it to offer service to regions outside the cable network, but Flett reckons the quality of BT lines will be key as homes become more reliant on IP-based communications.

BT Wholesale has recently launched an effort to bag more broadband resellers keen to offer a fuller range of services, but without the investment in content and infrastructure investment that BT Retail's rivals at Sky and Virgin can match. It has signed up Vodafone and the Post Office as early big names for its white label managed services venture, which offers the functions of a triple-play ISP without the tricky deal brokering and engineering.

The play fits well with the attempted hushing of the speed debate: if BT can get punters to think in terms of the services their broadband can deliver, rather than the speed of the pipe they come down, it'll be able to flog more Vision boxes, more Fusion Wi-Fi mobile handsets, and it might not have to spend billions upgrading copper wires. ®