Finding a funder for fibre to the home
Published: 06 May 2008 16:23 BST
...deploy services to their customers because of the technology used. Point-to-point does have virtually unlimited bandwidth, although it's 30 percent more expensive than PON.
There has been much debate over the universal service obligation (USO), which obliges BT to provide telephony services to any UK resident who wants them. Some people argue that the USO should be extended to include broadband. Should it include broadband, in your opinion?
At some point, yes. But it comes to the issue of: "Who?". If it goes to BT, you're enforcing a monopoly. My personal view is there should be a universal fund for anyone that wants to deploy the infrastructure.
How would a universal fund work?
All players in the industry would contribute to it. That fund could be allocated by the government according to their rules. It could be auctioned off by geographic severage.
It might be difficult to split the USO between multiple carriers though.
Don't forget that we already have the case of Hull, where the USO is carried by Kingston, not BT.
When would you want this extension to the USO to be in place?
The sooner we start, the better. If we wanted a broadband infrastructure by 2012, we should have started last year.
You hinted earlier that there are problems with BT's own network, 21CN. Are you satisfied with progress?
No. Nobody is. It's delayed by 18 months to two years. I understand there are technical difficulties. I understand [BT's chief executive] Ben Verwaayen was told that it wouldn't be done before 2014. But he said it must be done by 2011, in time for the Olympics. So huge pressure was put on the technical staff, against their advice.
So you think BT's [already delayed] completion deadline of 2011 will slip?
Almost definitely. It's a hugely expensive programme that's almost two years out-of-date. There is bound to be some impact on the end date. Whether BT can recover lost time — I wouldn't put my shirt on it.
The CMA's chief executive, Glenn Powell, told me a couple of years ago that BT was poor at communicating its plans for 21CN, meaning businesses were being kept in the dark on how they would be affected. Has that situation changed?
That was so 18 to 24 months ago, but not now. They need to talk to us so enterprises can plan ahead and put money in their own budgets.
Do you think 21CN will deliver the benefits BT promised?
I think so. They [will] have an end-to-end IP network. It's bound to encourage the development of IP-based applications. And it will have carrier-grade quality of service (QoS), which is important.
One of the more important regulatory events this decade was the functional separation of BT, which created Openreach. While the theory behind Openreach was largely welcomed, carriers argued vehemently for a long time afterwards. Are you satisfied with Openreach?
It's a darn sight better than anything we had before, but it's not perfect. The imposition of SLAs and SLGs [service-level agreements and service-level guarantees] by Ofcom will help. That has been too long coming. That is just an example of how they're improving. From our point of view, functional separation has been a huge success. The EU has now embraced the concept. One of the arguments against it is: it inhibits investments. But it hasn't inhibited investment here.
Do you think we finally have equivalence of treatment between service providers?
Equivalence now is 100 percent or 1,000 percent better than anything we had before [Ofcom's] strategic review. If you'd talked to BT's competition, they would have given you a yard-long list of things not done. If you were to ask now, the list would only have a dozen things on it.
Ofcom celebrates its fifth birthday this year. Would you say it has been a success story?
Undoubtedly. For sure.
What about its latest chief executive, Ed Richards?
Ed Richards has got his own agenda. He comes from the entertainment sector, rather than the telecoms sector. One sometimes wonders if there are enough senior posts in Ofcom filled by people from telecoms, rather than the media.
Isn't that just a result of Ofcom covering five disciplines? Telecoms is only one.
The question is: is the balance right? Stephen Carter was the last visible telecoms guy. That's not a criticism, just a comment on the way things are going. Ofcom has been a damn sight better than Oftel ever was.
There have been proposals made by the European Commission for one single super-regulator for Europe. Would you be supportive of a super-regulator?
I think it's absolutely essential. A new regulator at the centre will have more teeth. We cannot go on as we are. Effectively there is no single market in telecoms and that means that European enterprises are disadvantaged in the global market. ABN Amro told the Gartner summit in April that they would save huge amounts of money if there was a single market. One Italian car manufacturer has said it has 872 contracts to support its pan-EU telecoms needs. That's ridiculous.
Do you think the regulatory set-up is equal across European countries?
Some countries are good; some countries are not. Some regulators are not independent of the state, like Poland, for example. Some countries' governments have control of the incumbent [telco]. Some have inadequate competition rules or don't impose equal-access obligations.
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Is everyone supportive of the need for a European super-regulator?
Incumbents have said: "You can't do this". Most national regulatory authorities, including Ofcom, see this as a threat to their autonomy and oppose any extension of centralised authority.
How would such an organisation be created?
There is a huge debate over what form it would take. The solution is very likely to be a development of the existing European Regulators Group, although it's by no means clear just how it will be funded and how independent it will be from political interference.
One of the other big European issues is roaming. Call costs have fallen dramatically, following the demands of Viviane Reding. As a representative body for business telecoms users, you must be pleased with this.
It's great; absolutely terrific. It took us nine years of badgering.
Presumably you are supportive of Reding?
She is the greatest. This really chimes with what the CMA are doing.
Do you think data roaming prices need to fall?
Unless prices come down by July, [Reding] will legislate, and she means it. These stories of £10,000 bills are crazy. Even national downloads are crazy at the moment.
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