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By: MarkJ - 29 December, 2009 (8:37 AM)
btBT has cast a shadow over the government’s Digital Britain commitment, which aims to make a minimum broadband speed of 2Mbps available to everybody in the UK by 2012. The operator is threatening legal action if proposals by Kip Meek – the Independent Spectrum Broker (ISB), which would involve extending current 3G Mobile Broadband licenses indefinitely, are carried forward.

A BT spokesman told The Guardian:

"BT has major reservations around the wireless spectrum proposals from the Independent Spectrum Broker. The proposal to extend current 3G licenses indefinitely represents a gift of several billion pounds from the UK taxpayer to the mobile operators and is a barrier to competition and innovation in the mobile market.

We would like spectrum to be auctioned in a way that is fair to all operators and stimulates competition in the market for both existing operators and new entrants. We are discussing our concerns with BIS and are hopeful that these will be addressed.

BT is currently studying BIS's additional consultation document, which usefully clarifies points that were unclear in the original consultation, including the full scope of the BIS consultation. BT will submit a full and detailed response to the BIS extended and expanded consultation in due course."

The proposal is part of a wider plan that would entice UK mobile operators into sharing their spectrum and opening it up for wider use by Mobile Broadband services, thus extending the services coverage to more remote and rural locations. By contrast BT has only ever dipped its toes into the fixed wireless realm, instead sticking more to local Wi-Fi Hotspots.

BT has an understandable self-interest here, as any commercial company would, though their voice is unlikely to change the tide. Ironically it comes at a time when BT is trying to lobby for money from the government’s proposed 50p phone line tax and reduce its pension deficit by raising the price of access to its phone lines. Not the best time to be attacking the government then.

UPDATE - 4:24pm

BT has been in touch to clarify that it would be very willing to play a part in addressing the issue of the 2Mbps USC, so long as there is public funding available to bridge the gap with a commercial case.

However it firmly believes that the proposed spectrum caps risk a carving up of new and existing spectrum between the existing mobile operators with no real provision for new entry.

A BT Spokesperson informed ISPreview:

“BT believes that the proposals gift large value of spectrum to the incumbent mobile operators without any real provision to promote new entry or competition. Extending the 3G licences (twelve years before they expire) without a full auction is a large subsidy to mobile operators, at the expense of the tax payer, and is unfair to other investors in the communications market.

The proposed spectrum caps risk a carving up of new and existing spectrum between the existing mobile operators with no real provision for new entry. BT believes that a full and open consultation should be held on these proposals and will press for significant changes to be made in order to address the areas of concern.

Fixed line solutions are inherently better at supporting high-bandwidth usage by multiple users at the same time than mobile or satellite based solutions which can often suffer from slow speeds. Mobile Broadband customers in a given area have to share the available capacity with other users and suffer further speed degradation from environmental factors.”

BT should of course also be worried about the potential for future LTE based Mobile Broadband services to offer a faster and more accessible service than it is currently able to provide in many remote and rural communities. Indeed it makes a fair point about mobile operators being allowed to benefit while established fixed line alternatives would receive precious little support.

Presently BT's only real solution to reach these remote locations with a reliable 2Mbps service is the expensive Broadband Enabling Technology (BET) rout, which requires two 1Mbps telephone lines to be bonded. It would be interesting to see whether BT can produce a national fixed wireless alternative to the ISB proposals, though at present we have not seen a clear plan for hitting the 2012 target with this.

Still BT should not be too concerned; mobile operators have serious capacity constraints to deal with, due in no small part to the low pricing of Mobile Broadband services, which has failed to bring in enough revenue to support necessary improvements. This issue is likely to persist for some time to come.
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