Br0kenTeleph0n3

Following the broadband money

Will EC consultations stall UK progress on access to BT poles and ducts?

with 2 comments

Ecta, the European Competitive Telecommunications operators’ association, has welcomed European Commission moves to lower the wholesale price of access to incumbent telcos’ infrastructure, but has warned against overcompensating them with “excess profits” on their fibre networks.

Ecta said, “Network owners in many countries are making excessive profits over their largely depreciated copper infrastructure. This means that consumers are paying very high prices, and investments on fibre networks are just not happening.”

Ecta said it was unnecessary to allow “excessive profit” to compensate for any revenue lost to lower prices for infrastructure access. “All that investors need is a fair return, not excessive profits,” it said.

Being “over-generous” risked pushing fibre prices out of consumers’ reach and would undermine the Digital Agenda targets, it warned.

Digital Agenda champion Neelie Kroes this morning published two consultations designed to create a level playing field across Europe for infrastructure access prices. These could vary from €5.21 a month in Lithuania to €12.41 a month in Ireland for wholesale access to the local loop.

She did not believe that these differences between countries could be explained solely by variations in underlying costs.

The first consultation deals with alternative operators’ open (non-discriminatory) access to the infrastructure and services of dominant telecom operators. The second deals with how national regulators calculate prices that operators have to pay for this wholesale access.

Kroes wants a standard system to operate across Europe.

Telcos could also soon have access to €9bn through the “Connecting Europe Facility” proposal now before the Council of Ministers and European Parliament.

Kroes’s Digital Agenda targets are to have all Europeans with access to 30Mbps broadband by 2015, and to have 50% using 100Mbps services by 2020.

Comment

Kroes appears to have largely accepted Ecta’s argument, presented in June, that incumbent telcos have sweated their copper assets, and only invested in faster fibre networks once cable TV operators and “triple play” services (fixed line voice, TV and broadband) threatened their market share.

However, she has also given ear to incumbents’ pleas for protection of any investment in fibre.

The irony here is that many Ecta members are incumbent operators in their home countries. While they want prise open access to their off-shore competitors’ networks, they are fighting hard to keep competitors out of home markets.

The UK is already halfway down this road. In January, at the regulator Ofcom’s request, BT published terms and conditions (the so-called PIA reference offer) for access to its poles (£21/pole attachment/y), ducts (£0.95/m/y)and other physical infrastructure.

This was heavily hedged, denied use of the facilities to competitors who wanted to use the ducts to sell leased lines, and insisted on reciprocal access to competitors’ networks. In addition, Fujitsu Telecom, with Virgin Media and TalkTalk, claimed BT’s prices were four to five times their actual cost.

The BT offer was rejected by both competitors and business users. Following its inability to attract anyone to test its PIA scheme, BT was expected to deliver a revised reference offer by the end of September.

Ofcom and BT did not respond immediately to queries as to whether the commission’s consultations would affect the PIA reference offer timetable.

Update

Ofcom says it won’t. BT is presumably busy with a power failure at a Birmingham exchange which shut down many subscribers’ broadband for hours and got it trending on Twitter.

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Written by Br0kenTeleph0n3

2011/10/03 at 13:25

2 Responses

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  1. This is all well and good, but the real need is to be able to “back haul” using Telegraph Poles and Ducts, the current PIA program is only for “access” products. With access the owner of the copper can still dominate the back haul market and limit the technology being used.

    With back haul, then there is the concept and ability for un-fettered access to the physical infrastructure – this means a 3rd party carrier could deploy their own LTE picocells locally at the premise and use their own backhaul, rather than be tied to BT’s DSL links.

    Peter

    2011/10/03 at 14:49

    • Indeed, which is one of the reasons why BT has had no takers for a pilot to test the viability of its reference offer. The question is whether Europe’s glacial pace of telecoms reform will make ours slower or quicker, and what we might lose thereby

      Ian Grant

      2011/10/03 at 14:54


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