Five of the largest potential participants have pulled out of offering UK DSL services.
Telecoms firms Telewest, NTL, Global Crossing, Worldcom and KPNQwest have announced that they will abandon their plans to provide DSL services in the UK, instead looking for alternative means of providing business Internet services to UK businesses.
The main benefit of DSL (Digital Subscriber Line) is that it uses existing copper lines to offer high data speeds. This makes it relatively inexpensive. Previously the only way to achieve such speeds was through leased lines, but because of the installation costs and BT’s monopoly position, only corporate customers can afford them. Allowing other companies to access the local exchanges to offer DSL services was supposed to bring the benefits of broadband to the SME market.
But BT has been extremely slow in allowing other companies to access its exchanges. Many see this as a deliberate strategy to protect leased line revenues. Whether or not this is the case, it certainly means that smaller businesses will have to wait longer for broadband, and the price may initially be too high for many to see real benefits.
The delay contrasts with Germany, France and the Netherlands, where broadband access is becoming widely and cheaply available for small businesses. The government’s dream of ‘Broadband Britain’ is hardly being fulfilled. But what can be done?
While some blame BT for hurting smaller businesses, in reality it is simply fulfilling its obligation to act in the best interests of its shareholders. The problem is that telecoms regulator OFTEL lets BT get away with it. If OFTEL is unhappy with BT it should act. If its powers are insufficient, the government should increase them.
OFTEL’s forthcoming replacement by combined telecoms and media regulator OFCOM may help: a change of personnel and focus might make it more ferocious in dealing with BT. But the government has admitted OFCOM will have no additional legal powers. The time to act is running out. If OFCOM fails to do the trick, the government will be left to rue its inaction as Britain falls behind its more proactive neighbors.
