Monday, 8 April 2013

BT's Twisted Reality

An article in today's Telegraph reports on comments made by BT's chief Ian Livingston in response to calls by TalkTalk for more regulation on BT's broadband roll-out.  Interestingly, whilst the Torygraph is happy to promote BT's side of the argument, the original call for regulation by TalkTalk went unreported in the paper.

Naturally BT don't want more regulation on their business but Livingston (and his underling in Openreach, Liv Garvey) is playing such a game of words that beggars belief.

The nub of TalkTalk's argument as described by Sir Charles Dunstone (chairman) in his interview with the Financial Times last week (registration required) is that "Ofcom, the UK telecoms regulator, needed to regulate the cost of wholesale access to BT's fibre network" as currently BT Openreach can set the price as high as they like.  This doesn't affect BT's overall profit of course, since whatever BT Retail pay BT Openreach for access is simply a paper exercise.

Livingston's response was to characterise TalkTalk as "copper Luddites" adding "They don't' want to see the UK getting fibre" but Dunston's comments indicate TalkTalk are keen to resell BT's fibre services, if only BT wasn't abusing its monopoly position to charge exorbitant fees.

According to the Telegraph, "BT has committed to spend £2.5bn on connecting two-thirds of British homes and businesses to fibre-optic cables" which is simply untrue - BT's plan is not to connect their customers premises, only BT's own street cabinets.  The customer will still run on copper connections.  Doesn't this qualify BT as the "copper Luddites"?

TalkTalk's real beef is with the diversion of taxpayer's money to BT's pocket - Dido Harding (chief executive of TalkTalk) calls for an regulation "to ensure that the Government's investment delivers value for money rather than just funding a monopoly provider"

Garvey claims BT's decision to invest in fibre was a "leap of faith" and rivals "did not want to take the same risks" which is a ridiculous misrepresentation of the reality that BT have simply been keeping pace with technology (all carriers in the world are deploying fibre optic networks) in the routine maintenance of their network, deploying the technology that meet customer demand with fastest return on investment (i.e. FTTC rather than FTTP) and the "risk" of investing in rural areas with low takeup has been mitigated by the fact that the taxpayer actually paid for it.

Livingston says it's competitors "are not prepared to invest in fibre" however since it is the taxpayer's money, it would seem to be BT that isn't prepared to invest.

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