Broadband News

Select Committee on Trade and Industry report published

  • Wednesday, February 11, 2004 11:49 AM

The Committee on Trade and Industry has published its second report into the UK broadband market, the full report can be read here.

The report covers many areas including, retail broadband market, wholesale, local loop unbundling (LLU) and the break up of BT. Also looked at are what the governments role in the market should be, and the take-up of broadband across the UK.

One of the major problems is satisfying both the wholesale and retail sectors. The competitors to BT will be wanting a greater share to ensure their profits are maintained or increased, and BT will not want to lose business. Unfortunately ensuring competitors to BT have a fair crack at the whip can mean that some retail customers end up paying more. One example of this would be those people who as yet do not have the option of Datastream based services from wholesalers like Tiscali, Telefonica and Bulldog. In the future the same may be true for other technologies and LLU.

In its presentation of comparative LLU network charges around Europe to the committee, Freeserve has intimated that it it would be interested in using LLU services in the UK if the access charges were to reduce. The letter by David Melville (General Counsel, plc) states " Freeserve, with over 2.6m subscribers would be prepared to invest in LLU provided access costs significantly decrease in line with the rest of Europe.". It would be interesting to see something like this happen, i.e. a major non-BT ISP to get heavily involved in LLU broadband. The skeptics will highlight the fact that a lot of the time, Freeserves broadband products in the UK appear lack lustre, with a number of other ISPs under cutting the monthly fees. Lets hope that at least one provider has something major up its sleeve to jolt the UK market place in 2004.

The most common theme in the TISC report seems to be that there is a lot of uncertainty for companies in the UK broadband market, and therefore a reluctance to invest. Though one must question if this is endemic of the UK as a whole, or just the broadband market place.

For the stats collectors, the report states "with some 80% of the population able to access broadband, and with around 50% of households on-line, broadband subscriptions stand at approximately 3,021,000 or 10% of internet households". New subscriptions are rising at 40,000 a week. Interestingly take-up of broadband is very different among businesses, around 39% of the members of the British Chamber of Commerce now have broadband.

Many will see the further discussion of BTs break-up and re-awaken their calls for it to happen, but as the report highlights this may be a double edged sword. BT claims to have a set of 'chinese walls' in place to ensure BT Retail does not have an unfair advantage, but a number of rival ISPs contend that these walls are not fully in place or working. The danger is that if the Wholesale and/or Retail sections are forced off into separate companies that the BT Group may lose some interest in further network investment. If there was a significant LLU presence or cable providers were expanding this might not be so much of a concern. With so much of the UK dependant on the BT loop any regulatory action that may cause upheaval to the extent of delaying broadband roll-out will not be welcomed by the end-users.

One observation is that little mention is made of next generation broadband networks. As with many previous reports it is the here and now, and not what will be needed in 5 to 10 years time.


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