PSINet Inc is to shift its focus to Europe, and expects its revenues from the continent to surpass those from the US within three years, CEO Bill Schrader said in London yesterday. At the launch of the internet service provider’s $48m London web hosting facility, Schrader also condemned government meddling in the growth of the internet and attacked incumbent telcos for stifling the growth of e-commerce.
Schrader said the Docklands server farm, the first of 12 to be established globally in the next 18 months, was located in the UK as it is becoming the nexus of internet activity between Europe and the US. He said that European companies are using lessons learned from their US counterparts to leapfrog their competitors. Europe now leads in many respects, he said, while warning that the excessive power still afforded to incumbent telcos is likely to stifle the market in the short term.
British Telecommunications Plc’s reluctance to roll out ADSL to consumers and businesses, in particular, was the target of his wrath. BT has been forced by the industry regulator Oftel to allow competitors into its local loop by July 2001 to facilitate the introduction of high-bandwidth services. Schrader told ComputerWire that PSINet could roll out ADSL in a matter of days to a customer if it had access to BT’s exchanges and local lines. But the cost to the customer of doing it now would be made exorbitantly expensive by lease charges imposed by BT, he said. The UK could be the center of e-commerce in the world, he said, if every ISP had access to the local loop.
And he doesn’t expect it to be any easier now BT has had its hand forced, predicting stalling tactics and foot-dragging ahead of the deadline. The problem, Schrader reckons, lies in government. I believe in the market, he said, and governments should stay the hell out of the internet. They’ve had 100 years of stifling innovation and creating monopolies in the telecoms industry. The only way to stop soft regulators and dominant incumbents, he reckons, is if a non-incumbent telco or large ISP were to buy them up. BT may be a target for AT&T Corp or Deutsche Telekom AG in the near future, but a smaller incumbent such as Swisscom AG may not be out of PSINet’s price range in five year’s time, Schrader mused.
The criticisms come the in week the UK government is due to publish its Electronic Communications Bill (previously the Electronic Commerce Bill) amid political point-scoring from both sides of the British Parliament. The Labour government had come under criticism for delaying the publication of the bill until it was forced to ask permission from the opposition Conservative party to pass it through Parliament this session. The Conservatives reacted, calling the bill a dog’s breakfast and refusing to cooperate, whereupon the government accused them of crass oppositionism. The outlook looks bleak, with an e- commerce law to cover issues such as ISP liability and electronic signatures not likely until late this year at the earliest.
