Broadband News

Are the cracks showing in UK broadband?

PC Pro has some interesting comments on the state of broadband in the UK, with the item generally revolving around xDSL services that make use of the BT local loop infrastructure.

The concern of the various 'free' or bundled broadband services at the time of their launch was that they were too cheap for the services to be sustainable for more than a couple of years. Certainly many of the double/triple play bundles rely on customers taking another service, which is where the income will be generated, e.g. mobile calls on the telephone services, and pay per view content. The UK has gone through a period of around three years where the retail prices to consumers for broadband have been in free fall, with the cuts mainly being fueled by providers introducing acceptable usage policies and caps to keep a lid on their own costs. The unbundling processes took this a step further, by allowing providers to try and run services cheaper than what they can buy direct from BT Wholesale. For the millions of broadband users who still simply check their bank account and email now and then, plus perhaps do a little bit of online shopping, the myriad of offerings work well. However, for those embracing the dream of a broadband connection being central to a home entertainment system, many cheap provider products are lacking.

Plenty of providers have embraced local loop unbundling in the 10 months of 2006, and to date this has not always been successful. The fault rate for people being moved to an unbundled connection is not at an acceptable level yet, with around 22% of lines migrated to an unbundled service not working the first time. Additionally reports of ISP support being hard to contact or simply not understanding what people are telling them seems to be on the increase. It is possible that after a number of years of small incremental changes, that lots of customer support teams at service providers have been caught out by the number of questions from customers about the large scale changes that have taken place this year. It is interesting to see that BT Wholesale are saying the fault rate for Max ADSL is lower than its 2Mbps service, given the number of posts on our forums where people are having trouble raising faults this may be true, since it seems some are having trouble raising what they think is a problem with their service provider. Who is to blame for this is difficult to know, perhaps the industry as a whole (which includes us) has failed to explain the implications of a rate adaptive ADSL service, after years of very stable fixed speed services.

While services like Max ADSL are showing up the good and bad aspects of the copper local loop, we do see people getting speeds close to the maximum IP throughput of 7.15Mbps that is possible. Yes one of the oddities in the advertising for Max ADSL is that the 'up to 8Mbps' can never be met for actual downloads, but that refers to the line sync speed, which on the older 2Mbps service was actually 2.2Mbps to allow for overheads. What is clear is that as exchanges around the UK see bursts in demand for Max services, e.g. from students signing up at the start of a term, congestion is more obvious now. Problems with congestion were seen with the 1Mbps and 2Mbps services when launched, but there was little to no national press coverage about it. Of course congestion is a two sided coin, since with the most common form of ADSL (BT IPStream) there is the BT component, but service providers also control congestion according to how they manage the parts of the network they rent or own. With the price pressures from competition, providers are under pressure to have just enough bandwidth to keep most customers happy, and to some extent BT Wholesale may be under pressure to not over provision capacity to ensure that products from its competitors are not compromised.

So when will the bloodbath end? It is impossible to say. It is likely to get worse, and we suspect that issues like customer service will often be at the bottom of the priority list. Some providers may simply try to make its customer base attractive to competitors in the hope of a buy-out, others will try to compete head-on with products that price match the bigger operators who have deep pockets and can afford to run at a loss for a few years. We would not be surprised if those million or so people who kick started the broadband revolution from the year 2000 onwards are going to see monthly subscriptions increase to keep the same degree of quality of service as what they enjoyed a few years ago.


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