Tuesday 2nd October, London

Global Communications Society 

Broadband Revolution vs. a Narrowband Government

Michael Potter, US Telecoms & Internet Entrepreneur

Michael Potter argued that BT has been engaged in abusive anticompetitive behaviour. He pointed to allegations that BT has an internal regulatory strategy entitled, "Walking Backwards Slowly." Potter pointed to the recent European Commission raid of the Cellnet offices, on suspicion of price fixing, as an example of abuse. Other examples of anticompetitive behaviour included delays in unbundling, delays with Carrier Pre-Selection (CPS), obstruction and overpricing with the Calls & Access product, as well as recent Oftel crack-downs on over-charging for leased lines and for mobile interconnection. He declared that Oftel was an incompetent organisation. The primary argument for the dysfunction seems to come from David Edmonds himself, who argues that a new entity would be more competent at managing the industry. Potter slammed Oftel and Edmonds for using weasel terms such as "regulatory stability" and "proportionate regulation." "These terms have been used to justify a regulatory structure that resembles lies built upon lies." He said, "Oftel acts as it believes it only has a nuclear option at its disposal....the removal of BT's Public Telephone Operators (PTO) license, so Oftel has been frozen into inaction since this is thought to be politically unobtainable." As an organisation Oftel has no vision. Oftel has not executed. They spend all their time, energy and resources threading through legal minefields. This seems to be both their means and their ends." "Oftel should give BT a choice, to compensate consumers and new entrants for damages it has caused to the industry, or the government should confiscate BT's basic copper network and sell it, and use the proceeds for compensation." On the credentials needed for an effective Director General, Potter argued "that the digital economy is probably the most important economic driver in the entire UK economy. You need an individual who has the talent and the track record to effectively grow this part of an economy. Oftel should almost be seen and judged as a separate revenue enhancement entity for the nation."

Glenn Manoff, Ebone

Glenn Manoff began his presentation by suggesting that governments are using the right rhetoric (e.g. "eEurope", "eEnvoy", "Broadband Britain") but are entirely ineffective at creating the right market conditions. In justifying his statement he argued that there is no culture of clear responsibilities and accountabilities, and that the government is too focused on the consumer market and not focused enough on the business and wholesale markets. Furthermore, he suggested that there is no continuum between the end and the means, perhaps arising from the governments not understanding the local access issues clearly enough, not prioritizing it highly enough, or not being willing to 'make the tough decisions required to turn their well intentioned rhetoric into reality'. He continued to state that a broken regulatory process exists, wherein regulators are ineffective, have an unclear mandate and objectives, are disconnected from government objectives, have no clear targets on which to be measured and have no real accountability.

Ian Scales, Advanstar

There's a real and present danger that the difficulties surrounding unbundling in both US and Europe is interpreted as proof that the CLEC business model (in all its variety - including wholesale, consortia etc) is unsustainable. There is an obvious agenda here from incumbents (Chris Ernshaw from BT did a job on unbundling at the TEN meeting the other night), but there's also a temptation for executives (ex executives and so on) from the competitive side of the business to reinforce this by 'blaming the model', which is the easy way out in the circumstances. It's harder to make the more complex argument that not only are business models which rely (or part rely) on unbundling copper sustainable given the right circumstances, but that they're crucial for the next stage in the development of the industry as the financial markets start breaking up the likes of BT.

We risk playing into the hands of the BTs of the world too, if we aren't careful about how we go forward in urging government intervention on bb access (subsidy, public procurement and so on) since this can so easily resurrect the idea that the access network is a  natural monopoly and has a sort of genetic pre-disposition for a cross-subsidy of some sort (if it's not, why does it need government help?). The access network is NOT a natural monopoly and it doesn't need subsidy for broadband - it just needs the wreckers to get out of the way.

Stephen Murphy, Earthlease

Broadband for the Masses - the Earthlease Solution

As a result of the EU sponsored legislation on Local Loop Un-bundling (LLU), Earthlease believes that the Loop should be managed and developed as an "open platform" regulated utility legally separated from the incumbent operator.  This creates a clear enabling platform for new and existing service providers to offer broadband applications to consumers (business and residential) and a logical investor to expedite the development of new access technologies for the "last mile".

Earthlease believes that the creation of an incentivised, single purpose entity, fully regulated in the public interest will accelerate the LLU process and increase the level of accountability and transparency in the provision of network access for all users.

Clearly progress to date has been disappointing and a transaction as proposed by Earthlease and with governmental and regulatory support is urgently needed to secure the benefits of broadband access in the interest of all.