Interview with UK Rural Broadband ISP Rutland Telecom - ISPreview
Interview with UK Rural Broadband ISP Rutland Telecom
By: Mark Jackson - May 4th, 2010 : Page 4 -of- 4
"We are small and innovative and will always be several steps ahead of BT"

8. At BT's recent ISP Forum event in London the operator talked about launching new 'long line' FTTC trials this year (here), which could offer sub 15Mbps connections to rural communities that reside too far away for the full 40Mbps FTTC.

However BT said that "nobody sees it being an economic prospect" for reaching all remote areas. Many ISPs also used the opportunity to criticise BT's expensive 2Mbps long-line reach SHDSL / Broadband Enabling Technology (BET). What are your thoughts on these solutions to rural woes?

RT ANSWER: It seems odd that Openreach is doing BET with a whole new set of infrastructure competing with LLU operators who are customers of Openreach. It should be left to the LLU Operators to deploy their own extended reach SHDSL line cards if they want to. Openreach are increasingly competing with their customers - with BET they now taking space in exchanges which was meant to be for CPs.

OK in rural areas the big LLU Operator might not have a presence in an exchange but it concerns us that Openreach are doing this and not BT Wholesale - because Openreach can exploit putting racks and backhaul in exchanges using their own infrastructure at low cost whereas if an LLU Operator wanted to do this they would have to pay full price to Openreach. There seems to be another conflict of interest going on here.

The Openreach BET product seems to be significantly overpriced - this was pointed out over a year ago by LLU Operators at the Products and Commercial Group industry forum. No ISP showed any interest yet they proceeded with the trials. Why? You can buy a 24-port SHDSL line card for under $100 per port which can fit into an existing DSLAM chassis as a module. It would not surprise us to see BT Wholesale take this product up - rather like is happening in FTTC - then you effectively have BT PLC installing infrastructure for itself at low cost whilst the price of entry is set high for LLU Operators. A cynical view would be that by allowing Openreach to do this it prices CPs out of the market but allows BT PLC itself to reach rural properties with extended reach.

The problem is Openreach are trying to be more like an ISP. But even if we argue that it should be BT Wholesale (acting as an LLU Operator) that deploys BET, then BT PLC is still at a commercial advantage because the money paid to Openreach by BT Wholesale remains in BT PLC. Fundamentally I think we all know that Openreach should not be part of BT PLC - indeed there should be several competing companies in the position of Openreach. This would give healthy competition due to there being a selection of infrastructure guardians for CPs to choose from. BT Wholesale would have to compete with LLU Operators and BT PLC would be denied the commercial advantage of having Openreach as a supplier.

So leading on from this we can see the same issues with sub 15Mbps long lines with VDSL. If the price of entry is set high (because the argument is it is not economically viable) then it prices CPs out of the market leaving BT Wholesale to mop up the customers from Openreach and BT PLC once again moves back towards a monopoly. Before we know it we will have a nightmare scenario of exchange closures leaving BT FTTC all over the country. There will only be one significant wholesale provider and we will be back to where we were before the Undertakings. We'll probably all be in the undertakers! Our salvation may lie partly in the latest Ofcom consultation giving us access to BT ducts and poles. This might effectively allow companies to operate on the same level as Openreach - laying their fibre and offering it to CPs in direct competition with Openreach which is still likely to be part of BT PLC.

Whilst all this is very worrying, we ISP minnows have to make a living and ignore the bigger picture. We are small and innovative and will always be several steps ahead of BT. For example, we are already looking at bonding in VDSL2 and also bringing SHDSL into the subloop as well as challenging Openreach to allow us to unbundle SCPs or create PCPs in villages where they do not exist. We are flattered that BT started opening broadband shops shortly after visiting ours and look forward to going head to head with them in an FTTC area - preferably on a level playing field if Ofcom reduces the prices for subloop CPs to make them equivalent to Openreach FTTC, which is subloop unbundling by another name.

The End.

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