BT up to old regulatory tricks

Sally Davis, CEO of BT Wholesale, was a keynote speaker at the Sofnet event at London's Olympia yesterday. She talked about 'wholesale underpinning the society we live in" and how it enabled a multitude of new business models, putting control into service and content providers', and consumers' hands.

Davis also described how BT was providing "flexible, burstable, increasable" bandwidth to accommodate new usage patterns and pointed to the fact that her division provides the infrastructure for VirginMedia.

She was also effusive about the 21 Century Network broadband packages that are to be launched today, though BT wouldn't provide any details. asked Davis what BT's interest in rolling out fast broadband services to rural populations and other pockets that haven't got broadband at all or only 512k, with little or no prospect of fast broadband.

Davis said, "We are a very rational company. If there is market demand and any way to make a return we'll do it. We're in discussion various parties and Ofcom at the moment because there isn't a way of making a sustainable return in the copper environment. Businesses need clarity around the regulatory environment to invest in the future and that clarity is not there. We still have a universal service obligation, for instance."

A review was commissioned by the former head of Ofcom, Stephen Carter, which is headed by Francisco Ciao (ex CEO Cable Wireless) to look at government policy concerning next generation networks. The government is concerned that market economics and competition is not working - that is, given the returns in many areas there is no incentive to invest the necessary capex to upgrade the access network, which could have big implications for the country's GDP.

Keith Monserrat, Business Development Consultant, Analysys Mason commented, "If BT Wholesale is going to underpin society then that service to the nation should be contained in a "˜national utility' that is either driven by national objectives or by providing cost effective service to all service providers. Hence the only logical answer is the break up of BT and true balance sheet separation between wholesale and the internal BT divisions."

In April BT was named as the worst landline provider in a customer satisfaction survey carried out by price comparison site uSwitch. It is also embroiled in a regulatory wrangle with all the UK's other service providers over unbundled line charges. If it succeeds, the increase will have a serious impact on their profits.

In the 1990's BT argued vociferously that it should be given more favourable terms and conditions than the cable companies who had to pay for UK franchises (operating areas).