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BT Wholesale Datastream virtual path pricing - a mystery
Thursday 28 August 2003 10:23:00 by Andrew Ferguson

The pricing of the virtual paths on BTs Datastream Wholesale products in particular those used with In Span Handover (ISH) products are something of a mystery. It is not that the prices are hidden, but why when BT Wholesale dropped the price of the IPStream Office by 50% and IPStream Home by just 13%, that the virtual path costs on the Datastream products did not also drop? Various complaints have gone into Oftel but that resulted in a small drop of less than £1 per month on the data port cost.

Now for the real gotcha, Oftel forced BT to drop the per port cost of Datastream by 70p per month, but wait for it, BT then increased the cost of some virtual paths. This increase amounts to around 60p per month on the highly contended Datastream 1Mbps and 2Mbps products, but for the low contention products could be an increase of £30 a month more.

So which products are affected? Three variants exist for the Datastream virtual paths, VBR nrt (Variable Bit Rate non real time), VBR rt (Variable Bit Rate real time) and CBR (Constant Bit Rate). These parameters are part of the ATM Quality of Service and the standard IPStream services run on a VBR nrt system, the other two variants provide slightly better quality of service in terms of latency and consistency of throughput. This can be useful if linking several sites together over VPNs or running Voice/Video Over IP between a number of sites. Originally all three options cost the same, but in mid July 2003, BT has now increased the price of VBR-rt and CBR to differentiate the value of these new services.

The sorts of prices involved for a 3Mbps virtual path are CBR £2165 per year, VBR-rt £1855 and VBR-nrt £1545 (all exclude VAT), if you increase to a 10Mbps virtual path you are looking at £6625, £5680 and £4730 respectively.

Differentiating by value of service is an odd way of justifying the increase in price of something, BT is supposed to work on a cost plus basis we believe. In other words if it cannot justify to Oftel why these prices have gone up, i.e. no measurable change in costs then BT should be forced to remove the price changes.

One of the major companies to have complained is MediaWays who provide wholesale Datastream based services, and unfortunately had decided to use the CBR service for the extra improvements it gave for no extra cost at the time. If of a cynical nature one could say that BT has increased the pricing in anticipation of future forced price cuts, which will result in pricing returning to marginally less than in June 2003, but accompanied by a lot more fanfare than the July 2003 price rises.

Some of the uniqueness of the Datastream market has been taken away by the announcement of the IPStream Home 1000 trial, but Datastream products currently still have the edge with 2Mbps products and 10:1, 5:1 and 1:1 contention type products. With the drive from consumers for ever faster and cheaper Internet access BT Wholesales actions with these price changes do not show a company aiming to push forward the boundaries of Broadband Internet access in the UK, but rather a company willing to charge as much as it can get away with.


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