BT CEO for the hot seat this week

BT CEO Ben Verwaayen has a very important appointment with the British parliament. He is to appear before the Trade and Industry Select Committee to answer what is expected to be a series of pointed and difficult questions about Ofcom`s (the nation`s telecoms and media regulator) ongoing and wide-ranging review of the UK`s telecoms sector. A great deal could depend on Mr. Verwaayen`s performance. For, although the Committee itself has no direct input to the Ofcom review, it will have a profound effect on both the regulator`s and the government`s perception of just how genuine the incumbent UK operator in claiming that it has changed its spots and is now, finally and at last, willing to embrace equivalence and real competition in the local loop.~ ~ Much will depend on Mr. Verwaayen`s ability to remain calm in the face of persistent and not necessarily benign questioning. He has a reputation for being short-tempered with his own staff and any such exhibition in front of a committee of MPs could be the kiss of death for BT as we now know it.~ ~ BT is trying to reach a regulatory accommodation with Ofcom and to make peace with dozens of putative rivals over the provision of equivalent wholesale access to BT`s network and the thorny issue of local loop unbundling.~ ~ It is now almost a generation since BT was privatised and opened-up to competition, yet it still retains a de facto monopoly in the local loop despite years of demands by the likes of Cable & Wireless (C&W), Energis and Thus that it must honour the spirit of competition legislation rather than simply pay lip service to it.~ ~ In the past, BT was able to get away with it because Oftel, Ofcom`s predecessor was widely regarded as a toothless watchdog, only too willing to roll over and play dead whenever BT got stroppy. Ofcom though is a different beast. It has several times already proven it is not the incumbent operator`s lapdog and tension between the two organisations is now the highest it has ever been.~ ~ Ofcom`s review is due to be published this summer. If BT continues to stonewall on equivalence the regulator has already indicated that it will not hesitate to request an investigation under the terms of the UK Enterprise Act and refer BT to the Competition Commission.

If that happens it is an odds-on bet that BT would be broken up into at least two, and perhaps more, separate businesses.~ ~ In an effort to pre-empt this so-called "nuclear option" BT has on the one hand, issued a veiled threat that regulatory interference might cause it to revise its plans for its all IP 21st Century Network, and on the other, dangles a carrot by offering to create an "Access Services Division" to run the fixed network infrastructure and provide competitors with unfettered to the local loop.~ ~ BT always says that its Wholesale division already treats its rivals with scrupulous fairness and does not provide its sister division, BR Retail, with preferential treatment.~ ~ This is a claim that always provokes a hollow laugh from the competition that say that BT routinely slows rivals requests to a snail`s pace through use of labyrinthine bureaucracy.~ ~ Indeed, only last week, Bulldog Communications, which is the broadband division of C&W, made a formal complaint to the Telecoms Adjudicator, the dispute resolution body set up last year by Ofcom, that whilst BT Wholesale offers its own subscribers a repair time of eight working hours, customers of rival operators have to wait 28 working hours (that`s three and a half days) for repairs to be effected.~ ~ This, says Bulldog, is prima facie evidenced that BT is not providing equivalence of access. The company also claims that BT`s rivals consistently find it can take weeks or even months for BT to transfer a subscriber or introduce a new service as the paperwork slides into a maze of Kafka-esque bureaucracy that always works in BT`s favour.~ ~ Meanwhile, and this really is ominous for BT, the chairman of the Commons trade and Industry Select Committee, Martin O`Neill MP, in an interview with the influential broadsheet, the Daily Telegraph, has said that, when the chips are down, as they soon will be, he believes BT will prefer to commit corporate hara-kiri and saw itself in half rather than face the Competition Commission and compulsory dismemberment.~ ~ So, there`s a lot riding on Mr. Verwaayen`s performance on Tuesday. To make matters worse, John Pluthero, The CEO of Energis, one of BT`s most persistent and determined critics, gives evidence immediately before he does, and Mr. Pluthero is sure to have some pungent remarks to make: remarks that could put BT`s CEO on the back foot from the very start of his vital captain`s innings.~