The U.K. govt. and its telecom regulator acknowledged Wed. competition in the country’s wholesale broadband market is weak, but said they're working on it. Responding to a Feb. 10 report by the Commons Trade & Industry Select Committee on the state of the market, the Dept. of Trade & Industry (DTI) and the Office of Communications (OFCOM) said they agreed with the panel’s findings. The responses, filed earlier this year, were released Wed. by the committee. To the panel’s concern that alternatives to British Telecom’s (BT’s) existing ADSL network won’t be widely available any time soon, DTI said cable companies’ investment in broadband- enabling networks is increasing. Moreover, it said, govt. policy provides “significant incentives” for 3G service rollouts by requiring mobile phone network operators to provide service to 80% of the population by 2007. OFCOM said one of its key objectives is to promote “the often substantial investment” needed for continued broadband deployment and upgrading infrastructure. The regulator will take appropriate actions to “create an environment where making these significant and risky investments can be appropriately rewarded,” it said. OFCOM is in the midst of a wholesale broadband access market review and will study the impact of next-generation telecoms networks, it said. The report questioned whether the govt. should invest more money in commercial broadband rollout rather than leaving it to market forces. DTI said Regional Development Agencies and Regional Aggregation Bodies will be key to bringing broadband to marginal communities by aggregating demand across the public sector. To the panel’s concern that further rollout will at some point be dependent on public sector bodies’ bringing “something to the table” -- causing BT to slow deployment to take advantage of public subsidies -- DTI said “this does not seem to be the case in practice.” Rather, it said, BT’s establishment of a trigger level program “has been remarkably effective” in increasing deployment. The committee report asked whether the market could deliver improvement in broadband speed. DTI said it expects to see next-generation services launched first in high-density urban areas, but the govt. “would not wish to down play the importance of lower-speed entry level products as a means of encouraging people to migrate from narrow band dial up Internet access to broadband.” In its response, OFCOM stressed it’s already doing several industry reviews in addition to the one on the wholesale broadband access market. But it agreed with the committee “that the time is right for a more fundamental review of the regulatory regime.” The committee report recommended that BT’s wholesale and retail arms not be split. DTI agreed, but OFCOM said it’s trying to determine the structure of the future regulatory framework, part of which is the way BT is regulated. DTI and OFCOM agreed it’s too early to consider a universal service obligation for broadband. The committee is satisfied with the responses, a spokesman told us, but may monitor the govt. and OFCOM to ensure they follow through. “It’s early days at OFCOM,” the spokesman said (the regulator took over from its 5 predecessors late last year). In Oct., the panel will take a look at the regulator’s telecom work, he said.
The U.K. Office of Communications (OFCOM) Thurs. announced steps aimed at boosting competition in “broaderband” data, voice and content services. The regulator: (1) Launched a market review consultation on local loop unbundling (LLU). (2) Published a final statement on its wholesale broadband access market review. (3) Said it will create the office of Telecoms Adjudicator to monitor the swift development of LLU processes. At the same time, incumbent British Telecom (BT) agreed to cut prices for its LLU products, saying it hoped the move would reduce the need for future regulation.
The European Union (EU) is making “remarkable progress” in broadband growth, and there’s every reason to believe it will continue, Information Society Comr. Erkki Liikanen said Tues. From Jan. 2003-Jan. 2004, the number of individuals and businesses accessing high-speed Internet jumped 80%, Liikanen said at a news briefing on a European Commission (EC) communication on national broadband strategies slated for adoption today (Wed.). Wireline continues to dominate European broadband, he said but wireless technologies such as Wi-Fi, 3G and satellites are beginning to show up in the market. Too, he said, “mobile is really moving from voice to data.” Between this and last Jan., Liikanen said, broadband growth in top performers Denmark and Belgium continued at a fast clip, while deployment in other member states, which has lagged, is starting to pop. Korea leads the world in broadband takeup -- it’s in 67% of Korean households -- but the market there is becoming saturated, he said. European countries now compare “rather favorably” in the global picture, he said. All 15 original member states have unveiled broadband strategies and the 10 new member countries will do so later this year, Liikanen said. The various national plans share certain characteristics, he said, including the desire to give the market a chance to work before regulating. However, he said, in areas less densely populated, the market isn’t working and the “last mile must be opened for competition.” The public sector must try to foster uptake by using broadband as a platform for connecting schools, hospitals and local govts. to provide e-health, e- govt., and distance learning services, he said. Many member states admitted May 1 are already approaching the level of the original 15 in mobile services, Liikanen said, and some are closing in on the EU-15 in Internet usage. Once new members have fully implemented the EU’s new regulatory framework -- 4 have yet to do so -- the situation could change quickly, he said. The challenge will be for the EU-10 to guarantee such things as independent regulatory schemes and universal service via fixed and mobile networks, he said. In their favor, Liikanen said, the 10 accession countries are strong in the science and math arenas and they already have a good record of being able to move toward Internet adoption without going through all the steps the EU-15 had to negotiate. Asked to explain why broadband rollout is faster in Europe despite the availability of better content in the U.S., Liikanen said the U.S.’s commitment to broadband uptake has waned in the last year or 2 while Europe and Asia have made it a higher priority. The EU has made broadband promotion a public policy issue, has fixed targets where govt. can make a difference and has mobilized regions throughout Europe that have mapped their current and future deployment. There are challenges on the content side, he said -- Europe needs multilingual content, digital rights management (DRM) technologies, and more security online. DRM is a longterm solution that could benefit business, individual users and carriers, he said, but it must have open standards and be interoperable. Asked if he'd back doing away with intellectual property-related levies charged on various devices, Liikanen said in principle, commercial users should pay for services online as well as offline. On other topics, Liikanen said: (1) VoIP “in principle” shouldn’t be regulated because it’s a new technology. However, he said, the EC is looking into whether VoIP offerings can fulfill universal service obligations such as access to emergency services without regulation. (2) All regulatory steps for the launch of new top-level domain .eu are complete. By July, the EC hopes to have signed agreements with both the new .eu registry and ICANN. By Sept., the registry should be up and running, and a sunrise registration period for trademarked and other protected names launched. Liikanen wouldn’t disclose how much .eu domains will cost, saying only the price “should be reasonable.”
European countries could be moving closer to rollout of new broadband telecom networks over power lines. A key agenda item at today’s (Wed.’s) meeting of the European Commission’s (EC) Communications Committee (COCOM) is a draft EC recommendation setting out transitional measures for gradual deployment of power line communications (PLC), known in the U.S. as broadband over power line, including conditions aimed at minimizing electromagnetic interference. And PLC associations will meet with EC officials May 25-26 to discuss the current state of the PLC market and regulatory landscape.
Austria is ready to be “first to jump the cliff” into commercial e-numbering (ENUM) services, Internet Foundation Austria (IPA) Chmn. Michael Haberler told us. A 2-year commercial phase will launch this year, overseen by the country’s Broadcasting & Telecom Regulatory Authority (RTR) and with NIC.at providing registry services, said Georg Serentschy, RTR managing dir.-telecom section. The plan flies in the face of claims ENUM isn’t ready for prime time in Europe because technical and regulatory issues aren’t resolved. Because no one knows how ENUM will develop, Serentschy said Thurs., regulators are exerting a light touch.
Concerns that British Telecom (BT) is overcharging competitors for product management, policy and planning (PPP) in providing narrowband interconnect services is misplaced, an independent study for the Office of Communications (OFCOM) said Mon. OFCOM said it would take the findings and recommendations into account in a public consultation set to start this spring. The report found that BT allocated costs to narrowband interconnect PPP in accordance with detailed attribution methods and that the method used “does not appear unreasonable.” However, consultants Ovum and Robson Rhodes recommended, among other things, OFCOM: (1) Specify and publish a detailed and precise definition of PPP, using BT’s working definition as a starting point but amending it to exclude such things as the cost of other communications providers (OCP) bad debt. (2) Require BT to make public more information on PPP. On OCP concerns about BT’s PPP costs, the report concluded that substantial fluctuations in the costs reflect one-time events rather than, as OCPs claimed, BT’s using the PPP pool as a “dumping ground” for costs it can’t allocate elsewhere. Moreover, analysts said, PPP costs aren’t being double-counted and don’t include expenses of departments such as regulatory affairs and legal services. OCPs also worried about PPP charges. The report concluded that the current charge mechanism doesn’t reflect the main underlying cost drivers and, in fact, distorts competition in favor of OCPs that spend little on infrastructure investment as opposed to those that do. Moreover, it said, BT hasn’t tried to recover bad debt through the PPP charges. But analysts recommended that OFCOM consider several options for allowing BT to recover PPP costs in the future: (1) Remove service center costs from PPP and recover them through transaction charges per interconnect circuit order. (2) Put PPP in a “price basket of its own” because its current mix of cost structures for both PPP activities and the supply of interconnect circuits makes it difficult for OFCOM to set an appropriate price cap. (3) Recover remaining PPP costs from OCPs in a way that more closely reflects cost causality.
Despite the growing popularity of digital TV (DTV), the U.K. isn’t likely to meet its goal of a 95% switchover from analog to DTV by 2010 if it relies solely on the market, the Office of Communications (OFCOM) said Mon. “It is time for all interested parties -- the Government, OFCOM, the broadcasters, manufacturers and retailers -- to change gear” from planning for switchover to implementing it, OFCOM said in a report to the Secretary of State for Culture, Media & Sport. The report follows a survey showing U.K. consumers wary of the govt.’s motives for switchover, and a Council of Europe investigation into the need for regulation to ensure access to DTV in the face of increasing media concentration.
A World Intellectual Property Organization (WIPO) panel Thurs. unveiled a proposed treaty updating broadcast rights protection for the digital age. The document, the product of WIPO’s Standing Committee on Copyright & Related Rights (SCCR), lays out proposed provisions as well as alternatives offered by various delegations. It expressly excludes protections for webcasting, but leaves open expansion later to cover simulcasts by broadcasters of their own programming, and webcasts. The draft defines broadcasting as “the transmission by wireless means for public reception of sounds or of images or of images and sounds or of the representations thereof; such transmissions by satellite is also ‘broadcasting.’ Wireless transmission of encrypted signals is ‘broadcasting’ where the means for decrypting are provided to the public by the broadcasting organization or with its consent. Broadcasting shall not be understood as including transmissions over computer networks.” The SCCR said, “a great majority of Delegations in the debates in the Standing Committee opposed the extension of the protection to webcasts” and suggested the issue be left for the future. The draft requires signatories to provide adequate legal protection and effective legal remedies for circumvention of technological measures protecting broadcasts. Some digital rights advocates have feared the draft might contain broadcast flag language similar to that under consideration in the U.S., though a WIPO official said in Feb. that measure wasn’t likely to be included (WID Feb 5 p3). The SCCR is slated to consider the consolidated text at its June 7-9 session, and to decide whether to recommend that the WIPO General Assembly convene a diplomatic conference. While it’s true the draft doesn’t require signatories to adopt a particular broadcast flag proposal, it does mandate that countries provide adequate anticircumvention legal protection and remedies, said Electronic Frontier Foundation attorney Gwen Hinze. Its language mirrors one article of the 1996 WIPO Copyright Treaty, which was used to justify enactment of the Digital Millennium Copyright Act [DMCA], she said. The real question, Hinze said, is how signatory countries carry out that provision in national law and what technological protection measures broadcasters then choose. “Before we rush headlong into adopting yet another layer of legal protection to technological measures for broadcasters, we should look closely at the costs and benefits of doing so,” Hinze told us. After 5 years’ experience with the DMCA, she said, “it’s clear that legal protection for technological measures on copyrighted works has not been successful in stopping digital copyright infringement or the distribution of circumvention tools, but has instead caused considerable collateral damage to important public policies.”
British Telecom’s (BT) decision to cut prices for residential phone customers has caused major heartburn for U.K. indirect access operators. Last week, BT said it would scrap its standard rate in favor of 3 more competitive options. Beginning in July, existing standard-rate customers will shift to Option 1, paying 3 pence per min. for daytime calls and 5.5p for up to an hour per call in the evening and on weekends, instead of up to 60p for local calls at the old rate, BT said. Line rental charges will drop from Pounds 11.50 per month to Pounds 10.50 for customers. The primary reason for the change was to allow customers to make fair comparisons with rivals’ rates, a BT spokesman said. Many ads over the past year have contrasted BT’s standard rates to others’ lower prices, the spokesman said. Ads will now have to compare “apples with apples,” he said. But alternative operators in the residential arena, which at first failed to grasp the significance of higher line rental rates, awoke to it over the weekend, said Gamma Telecom Managing Dir. Kevin Jauncey. Jauncey, who’s appearing on a panel today (Tues.) on indirect access issues at the European Competitive Telecoms Assn. annual conference in Monte Carlo, said the discussion was modified slightly to address BT’s action. “It wasn’t seen straightaway what the implication was,” he said, but operators are now saying the rise in line rental charges to their customers (from Pounds 9.50 to Pounds 10.50 per month) will hurt competition. In the residential market, all alternative operators rely on BT for the “last mile,” Jauncey told us. A Pounds 1-per-month rise in line rental fees means customers pay not only their telcos’ charges but also an additional Pounds 12 per year to BT, making their phone rates less attractive. At the moment there’s not much BT competitors can do, Jauncey said. The U.K. Office of Communications (Ofcom) is reportedly deciding whether to investigate the new tariffs. But the BT spokesman said line rental has never covered its costs and is being subsidized by phone calls. As far as BT knows, he said, Ofcom would allow not only this rise but an even higher one because line rental must as nearly as possible pay its costs. BT rival Telewest said: “Consumers can only benefit from increased competition and we're used to maintaining pressure on other providers, forcing reactionary moves like this.” Telewest urged existing BT customers “who feel they've been paying over the odds for their phone service” to call the competitor. “If they take one of our unlimited packages, we'll also give them either a year’s free digital TV or a year’s free unlimited dial-up Internet access,” Telewest said.
European govt. ministers are expected to adopt tough new antiterrorism measures, including pan-European rules for communications data retention, when they meet later this week. Outrage over the March 11 bombings in Madrid is behind the move. At an emergency meeting Mon., Justice and Home Affairs (JHA) Council members agreed on a draft declaration on combating terrorism floated by the Irish Presidency and the European Commission (EC). Among other things, they focused on quick development of rules for retention of communications traffic data by service providers, the Presidency said. Not surprisingly, the prospect of more data retention rules prompted criticism from civil liberties advocates.