ISPreview - Year in Review 2006
ISP's Talk Migration, ADSL2+ & MAX
By: Mark Jackson - February 7th 2007 : Page 2 -of- 3
"The industry is converging as it's no longer viable to sell 'just broadband'"

2) What impact has BT’s ADSLMax (up to 8Mbps) technology had on your ISP/network since its introduction last year?

EntaNet: Increased number of fault reports from people experiencing issues and fallout from those who don't understand the implications of a shared resources, best efforts network. BT's costs for bandwidth are still extortionately high for the service provided.

Vispa: A good example of BTWholesale moving the goalposts with their 8mb offering. From their point of view, perhaps it was a good move as they knew ISP's would run out of capacity and the orders flooded into BT for new central pipes! From the ISP's point of view, it was bad. Smaller ISP's with small centrals suffered the most as they cannot afford the upgrade. Think of a 10mb central pipe, two 8mb customers have the facility to use 16mb but they are limited to 10mb. The same goes for 34mb, 155mb & 622mb centrals. Instantly, you need a new one (or two).

It's brought drastic changes to industry as services & tariff's have changed somewhat. More aggressive usage caps & slower speeds than expected. With the public perception of 8mb being "I can get 8mb broadband" without realising that in actual fact, realistically you are going to get anywhere from 1mb to 5mb depending on your distance from the exchange & ISP capacity. ISP's were soon inundated with slow speed complaints as capacity is more noticeable with 8mb. It's not always the ISP. Look how quickly BT are trying to upgrade exchanges!

All in all, perhaps Ofcom should have reviewed their restrictions in light of 8mb being brought to market. BT couldn't drop their prices to allow ISP's to continue to build viable business plans and the result; The industry is converging as it's no longer viable to sell 'just broadband'.

Firenet: It has created more costs involved in maintaining the higher need for faster speeds on ancillary services such as email, hosting, and domain services. The overall costs of retail priced bandwidth has dropped due to competition, however the commercial provisioning of bandwidth has risen, which doesn't help Internet service providers who haven't got an unlimited spending budget like the big "free for life" nationals. Bandwidth costs needs to be reduced to come in line with the nations needs for downloading faster, bigger and cheaper. In addition, if this is what the customer wants, the sooner OFCOM get that message, and then the sooner we can go back to unlimited bandwidth for the customers benefit.

3) BT is due to start rolling out even faster ADSL2+ technology this summer, what are the biggest concerns and expectations about this new product?

EntaNet: As this will be on 21cn rather than on IPStream the impact should be lowered as bandwdith charges to ISPs are lower but the significant investment in a national network is substantial (current estimate for phase 1 - to Jan 08 is 5.75Million for Entanet).

Vispa: BT have announced 24mb broadband. Thankfully they have announced this as part of Wholesale Broadband Connect (wBBC) portfolio. As this is an entirely new product it is a different ball game. The trials will begin this year and I guess like many other ISP's we're watching very closely.

Firenet: The sheer cost of the continual advancement of our ADSL products is my big concern, we are in a world of an ever adapting, faster, and demanding bandwidth, but the overall cost of bandwidth hasn't reduced in the UK.

Therefore, it means that if we buy services wholesale that start at 32 meg broadband, the caps will still have to start at 2 gig so that the product runs in line with the price competitive requirements of our customers. Until bandwidth costs at wholesale level are reduced dramatically, capping will remain the biggest issue that we will have for the future of provisioning.

OFCOM are regulating services for the BIG isp's but fail to help the smaller ones, who are continually having to play catch up with an ever more demanding threat of over priced initial installation bandwidth charges, hefty deposits, and having to gain thousands of customers before it starts to pay off.

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