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Reflecting on BT's new triggers...
Monday 24 November 2003 09:20:00 by Sebastien Lahtinen

BT's announcement of 2,300 new trigger levels a week ago has been welcomed by most campaigners and broadband groups but others have been questioning the reasoning behind the decisions trying to find out why they were not as lucky as others.

Firstly, we ought to say we welcome BT's decision to publish so many trigger levels without further delay. BT is a commercial company and should not be expected to subsidise broadband rollout to areas where it is uneconomical and thus the setting of trigger levels, even where these may seem to be very high, should be applauded. There are however issues BT have not been clear on and questions that needed answers.

Broadband Coverage

Last week BT took the bold step of announcing that it expects to achieve 100% coverage of communities in the UK by 2005, although this did not necessarily mean every solution would be using ADSL technology (and in fact one could ask whether this includes satellite which technically probably covers 100% of the UK already). If BT is convinced this will be possible, we questioned why they did not make a decision to enable every exchange with a trigger level in the order of trigger level achieved so far. BT however point out that the 100% coverage will only be achieved with the support of communities and public partnerships ant not only by market stimulation. Also it expects the costs of deployment over two years are expected to fall.

Exchanges with pre-existing trigger levels

The review carried out by BT on exchanges without a trigger level resulted in triggers being set based on a longer accounting payback period and taking into account cost reductions that are now achievable.

"We're sticking with the previous triggers based on exchange specific costs. If we adopted the same approach to these as we're taking with the new tranche of exchanges, trigger levels would actually increase. Changing the model enables us to set triggers and give certainty to those people served by the exchanges that take us beyond 90% coverage. The reduced costs that enabled us to reduce the pre-existing triggers earlier this year are factored into our weighted average for the 2300 new triggers. By improving the network design, taking an updated view of technology costs and extending the payback periods we can take a longer term view and set triggers for theses 2300 at levels below that which would have been the case 6 months ago."

Alison Ritchie, Chief Broadband Officer, BT Group

We entirely agree with BT that they need to measure the profitability of exchanges in order to determine the point at which they can justify the cost of enabling an exchange, but we feel that the issue of "weighted averages" is being confused with using a different accounting formulae for how long an exchange is given to pay back the investment cost of enabling it and the cost reductions that are available to BT for exchanges which with pre-existing triggers. If there are further cost reductions reflected in the 2,300 group triggers not already measured in the other ones, there is no reason for BT not to re-evaluate existing triggers in the same way (albeit on an individual exchange rather than an average basis as for the new set of 2,300 triggers). The current situation will favour BT as it puts local campaigners to work beyond the point at which BT would want to enable the exchange, thus making them more profitable. With many exchanges previously described as "unviable" receiving triggers below those previously given triggers suggests the cost savings are considerable or the payback period is significantly longer.

Weighted averages

Rather than by evaluating the individual cost of upgrading each exchange, the 2,300 new triggers have been set by taking an average cost of enabling one of these exchanges and weighting these against the sizes of the exchanges (in terms of subscribers). This means that a smaller exchange may have a much smaller trigger than a larger one despite being just as costly (if not more costly) to enable. It could be looked at 'subsidising' the smaller exchanges with the larger ones in some ways.

Alison Ritchie denies this is a subsidy and confirmed that the costs of carrying out individual surveys for every single exchange prior to setting a trigger was both costly and time consuming and this approach allowed BT to set triggers for a large number of exchanges as soon as possible with the minimum cost. Acknowledging that as with any averaging model there are "some winners and losers", Alison Ritchie believes that this will result in more exchanges being enabled sooner, and we would tend to agree.

"The clear message that was coming through [from campaigners is] for triggers to be set for as many people as possible. What's really important here is that we've been able to give people in these areas some clarity, something to aim for."

Alison Ritchie, Chief Broadband Officer, BT Group

Timetable & Triggers

It usually takes about three months from the trigger date for an exchange to be enabled and BT have been telling campaigners that they expect to be broadly maintaining this timeframe even with increasing numbers of exchanges triggering but the recently announced RFS dates extend into March 2004. BT explained that this has been unavoidable in some cases because of the extra work necessary to the exchange, network infrastructure, etc. or where a subtended backhaul is required where it may be dependent on another exchange being enabled. The 2,300 trigger levels announced last week take into account the average cost of delivering broadband capacity to that exchange including the possibility of subtended backhauls.

So what about those who live further away?

Probably one of the most popular questions we receive from users is asking what can they do if their ISP has told them that BT has rejected their ADSL order on the basis that the line quality is not sufficient to support the required level of service. With the focus on the new trigger levels, one could easily forget those who are just too far away from their exchange to receive broadband even if their exchange will be (or is already) enabled. BT have set out its commitment to deliver broadband to everyone through whatever technologies are appropriate in each case and expect to address the 'reach issue' by next summer.

"BT is committed to pushing availability to those currently out of reach for ADSL broadband and is actively exploring a range of possible technologies, systems changes and product developments to take broadband reach beyond the current constraints. The recent extension to 60dB line loss (6km reach) increased the proportion of people within reach in enabled areas. However there are still about 3 - 4% still out of reach on enabled exchanges.

BT has already implemented a programme using overlay copper to provide ADSL connections to some people served by TPON optical fibre links and within the 6km (60dB) limit. We are currently exploring approaches to enable DSL to be provided to people currently served by TPON at distances further from the exchange. Technology evaluation of fixed wireless broadband access has been progressing with a trial in Cornwall and Scotland. Long term, satellite and wireless are likely to be part of the broadband delivery mix but as well as the technology development there are commercial issues which need to be addressed.

We have a range of programmes in place to assess and mitigate the issues in such areas but we need to proceed as quickly as we can, but also in a sensible way, i.e. beginning with evaluation of technology or systems changes, then moving to trial of potential services/products. Specific trials will be announced at the appropriate time in the coming months and we hope to be in a position to explain our plans for dealing with the reach issue by next Summer."

Alison Ritchie, Chief Broadband Officer, BT Group

Conclusion

The announcement of these triggers covering almost every exchange in the country is welcomed and BT should be congratulated for listening to the community that has been asking for this and finding a solution for setting such a large number of triggers in a single swoop instead of rolling them out at a slow pace. Not only is this likely to take politicians, councillors, etc. off their back, it is a true leap in the right direction in the same way that introducing the trigger level system itself was in the first place, giving people the information they need to make decisions about campaigning and/or looking at alternative broadband delivery platforms such as fixed wireless solutions. BT have said that some of the new triggers are "achievable albeit challenging" but stress that they have been set with the intent to broadband enable all of the exchanges in question by 2005.

With that in mind, we are disappointed that BT has not re-evaluated the existing trigger levels, not in the same way as the 2,300, but only in conjunction with the reported cost reductions, and to a lesser extent, the financial decision to use a longer payback period. We suppose it could be (although it has not been) argued that some exchanges will require earlier upgrades to cope with increased broadband speed requirements, thus warranting a shorter payback period. This could be the case in more populated areas which will expect to keep up with the faster and faster speeds more so than other more remote areas--We are currently in the infancy stages of broadband trying to get broadband of some kind to everyone whilst in the future we are likely to find urban areas are likely to have more choice and faster access than rural areas, the very nature of communications networks. This has already been seen in London and some other major cities already with faster unbundled services available. On a more positive note, at least BT is not trying to raise this figure by lowering the speeds it considers "broadband". [seb]

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