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Entanet Calls on BT to Slash their Wholesale Bandwidth Charges for UK ISPs

Thursday, August 23rd, 2012 (11:31 am) - Score 1,028

Communications provider Entanet UK has warned that the new generation of superfast broadband (25Mbps+) services “will only be sustainable” if BTWholesale is forced by the telecoms regulator to cut wholesale bandwidth charges for ISPs.

The ISPs Head of Service Operations, Neil Watson, noted that the deployment of new services like FTTC (up to 80Mbps) and FTTP (up to 330Mbps) was welcome but had also increased the bandwidth capacity demands for providers around the country. A similar sentiment was echoed by AAISP earlier this year (here), which warned that it would “cost around £16,000 a month to BT alone” to deliver the full capacity of a true fibre optic 330Mbps link to home users.

Neil Watson, Entanets Head of Service Operations, said:

We don’t believe that superfast broadband will single-handedly bring us out of the economic downturn but, unsurprisingly as an ISP, we do believe that the investment in superfast broadband by the Government and UK ISPs will help to boost the UK economy. Only time will tell to what extent. However, we also believe that if we are going to continue to develop faster and faster broadband services then something also needs to be done about the cost of wholesale bandwidth. Otherwise smaller market players are going to struggle to keep up with capacity demands, which will lead to a lack of viable competition within the market, restricting consumer choice and potentially leading to monopolistic behaviour.

For example with the latest 330Mbps FTTP services one customer could potentially be using 330Mbps, where previously when customers had 1Mbps connections that same capacity would have supported 330 separate customers, significantly increasing the capacity requirements and costs for ISPs.”

In fairness Watson’s final example suggests a dedicated supply of bandwidth on a 1:1 contention, which is generally only applicable to the most expensive business packages. By comparison home users have to share capacity between lots of other users, which makes the package affordable and is one of many different reasons why so few ever receive 100% of what their line is actually capable of.

Certainly cheaper bandwidth would always be welcome and that’s one of the reasons why so many would like to see greater competition in the UK’s wider telecoms market, although Ofcom has so far opted to take a somewhat hands-off approach. On the other hand BT has a habit of putting prices up in other areas when it’s forced to cut them elsewhere, thus there’s no guarantee that Entanet’s idea would resolve the underlying problem.

At the same time Entanet has also called on the government’s superfast strategy “not to further isolate rural communities” by leaving them until last and to provide more education in order to “encourage people to get online“. In addition the ISP noted that it wasn’t just families with data hungry teenagers who stood to benefit from superfast services, with Entanet having experienced a “majority of interest in fibre products from business users“.

As usual it’s easy to forget that the real benefit from superfast broadband comes via the infrastructure improvement itself. For example, FTTC has already delivered significantly faster speeds into some homes that could previously only receive a handful of megabits. It might not always deliver the top speeds but many still experience a huge improvement over what they had before.

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By Mark Jackson
Mark is a professional technology writer, IT consultant and computer engineer from Dorset (England), he also founded ISPreview in 1999 and enjoys analysing the latest telecoms and broadband developments. Find me on Twitter, , Facebook and Linkedin.
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