It seems that Ofcom, the UK's super-regulator of telecoms and the media, has been eating meat again. How else to explain the sudden rush of blood to the head that has resulted in macho posturing about turning the regulatory screws on BT's wholesale leased line business? By Martyn Warwick.
Ofcom has briefly woken from its vernal torpor to launch a "consultation" about the wholesale leased lines and fast data services market in general and regulating the UK's incumbent telco, BT, in this regard in particular.
Ofcom says that whilst the metropolitan London market is comparatively competitive, outside the capital things are very different with BT dominating and, to all intents and purposes, monopolising a leased line sector worth £2 billion per annum.
A regulator writes, “Outside of London, Ofcom is proposing to regulate very high-bandwidth, wholesale leased line services above 1Gbit/sec. BT is proposed to have ‘significant market power’ in this relatively new market, in all parts of the UK except London and Hull.” This means many operators and service providers have to pay over the odds to ensure that they can tap in to backbone telecoms infrastructure via Ethernet or fibre-optic cables.
The Ofcom statement continues, “The combined measures are designed to sustain competition and ensure the UK has a backbone of high-speed business networks capable of supporting not only companies, but also consumer services that ultimately rely on these networks, such as superfast broadband and mobile video streaming."
Thus Ofcom will look again at the regulations pertaining to the Ethernet connections of 1Gbit/sec or less that are provided by BT.
The regulator will also beef-up its scrutiny of the charges BT makes for these services and ensure that the incumbent telco does actually provide them on a fair and "strictly non-discriminatory basis".
Ofcom reckons its new-found cojones will help ISPs and opwners of corporate networks to make better and more economical use of backhaul as they strive to cope with the ever-increasing demand for data-intensive, high-bandwidth content exemplified by video and cloud computing. It will also certainly help the speedier and more timely roll-out of LTE/4G services.
As might be expected, BT is not at all happy about being told what to do and be forced to demonstrate that it is even-handed and charging fairly and equitably for its leased-line services.
A BT statement reads, “The [Ofcom] document is very long and contains a number of proposals but from an initial review, we are disappointed that Ofcom has found that BT has market power in the very competitive high-bandwidth market and still intends to regulate declining legacy services. However, we welcome Ofcom's intention to simplify and add certainty to pricing in the business markets, as well as their recognition of greater competition in London.”
So, the sluggish regulator has acted but, as usual, it is too little too late. The new regulations will have no impact on the much-vaunted Broadband Britain initiative that has been spluttering along and firing on three cylinders for years past. Few companies have come forward to tender for various broadband projects mainly because of the difficulties they have faced, and continue to face, in getting economically viable backhaul from BT. Strangely though, BT itself (along with Fujitsu) is bidding for such projects. Well, it would, wouldn't it?
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