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By: MarkJ - 29 December, 2009 (7:40 AM)
bt openreach logoBT is facing complaints from rivals TalkTalk and Sky Broadband about the wholesale viability of its next generation fibre optic based broadband services ( FTTH / P , FTTC ), which are about to begin their commercial rollout around the UK. The ISPs are both demanding improvements to BT's wholesale product which they claim, currently lacks the flexibility to help providers differentiate themselves from rivals.

Regular readers will recall how, during the early years of ADSL based broadband services, most ISPs who took BT's initial products offered an almost identical service. There is more flexibility this time around, especially in terms of bandwidth (usage allowances); but ISPs bred on a diet of cheap and flexible unbundled ( LLU ) products could view BT's offering as a step backwards.

The complaints are important because BT no longer dominates the retail broadband market, holding a share of approximately 30%. As such it will need to make money from its wholesale products, which must be attractive for ISPs to adopt it. Likewise the lack of flexibility, which is normal when multiple ISPs take a service from one supplier, could result in a mass of similar services with fewer ways for consumers to differentiate between providers.

Dougal Scott, Sky's deputy head of Strategy, told The Financial Times:

"We'll continue to work closely with BT to provide input on how the trial products need to be modified. It's important that future products are attractive to potential wholesale partners if BT is going to see a return on its investment."

Charles Dunstone, CEO of The Carphone Warehouse ( TalkTalk ), echoed Sky's remark and added that the proposed BT Openreach FTTC and FTTH / P products were "not acceptable" in their current form. Some ISPs have also told ISPreview that they may look to drag out their existing ADSL and ADSL2+ based (up to 8 and 24Mbps respectively) broadband platforms until BT has improved the coverage and flexibility of its next generation products.

This would not be unexpected; indeed traditionally the slow rollout of any new BT based broadband technology has received a somewhat staggered response among ISPs; FTTx won’t replace ADSL for a fair few years until coverage is more universal. There is no reason to expect that FTTC and FTTH would be any different, except that it represents a much more fundamental infrastructure improvement and significant speed boost ( up to 40Mbps for FTTC and 100Mbps for FTTH ); minimum speeds of around 10 to 15Mbps are likely.

Meanwhile BT claims to be confident that its next generation products will deliver a good service and they will only look to improve flexibility should there be commercial demand. Surely calls by two of the country’s largest ISPs for just that is enough of a kick to get things moving?
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