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BT on the offensive over mobile spectrum, on the defensive against other ISPs
29 Dec 2009 | 20.24 Europe/London
BT is threatening legal action against Digital Britain proposals to extend 3G licences indefinitely, throwing what were already fragile plans on utilising mobile broadband to fill holes in the Government's UK-wide Universal Service Commitment (USC) once more into doubt. Meanwhile, other major Internet service providers are rounding on BT Openreach over its own proposals for its next-generation fibre optic network, with TalkTalk arguing they are "not acceptable" in their current form.
For quite some time, Kip Meek - the Independent Spectrum Broker (ISB) - has been trying to cut a deal with the mobile phone operators to help achieve one of the most publicised Digital Britain goals: a USC of 2Mbit/s for every home in the land.
His proposals include that the frequencies Vodafone and O2 currently use for voice and text services be refarmed for mobile broadband; in exchange for shelling out on the infrastructure that's required to actually make that work, all five of the big mobile firms will be granted indefinite extensions to the licences they hold covering the 3G spectrum (due to expire in 2021).
But it's not just this that BT has taken issue with: despite Mr Meek wanting to implement a cap on the amount of the spectrum any one firm can hold, the telecoms giant is worried about how the spectrum currently used by the analogue TV signal (due to be switched of in 2012) and a new 2.6Ghz band will be sold off.
"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," the firm told The Guardian.
But whereas using mobile broadband to help fill in notspots would mainly benefit rural areas, the telecoms firm is rumoured to be wanting to gets its hands on a good deal of the 2.6Ghz spectrum to use for super-fast wireless broadband in urban areas.
"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," added a spokesperson from BT, which has sent the Department for Business, Innovation and Skills a letter outlining its stance.
While the biggest home and business broadband firm gets on the Government's case on over its mobile plans, the second and forth biggest ISPs - TalkTalk and Sky respectively - are themselves getting on BT Openreach's back about its next-generation wholesale plans for its fibre optic network.
Its super-fast network - based around FTTC (fibre-to-the-cabinet) and FTTH (fibre-to-the-home) - is expected to cost around £1.5 billion; with that kind of expenditure Openreach is expected to need to take on wholesale deals in order to get a return on its investment - and all the friends it can get.
However, following his company's involvement in trials of BT's next-generation technology, TalkTalk chief executive Charles Dunstone says the current wholesale proposals are "not acceptable" - arguing the need for "something that is much more flexible."
The argument is that the wholesale offering isn't "flexible" enough to mean individual ISPs can differentiate their product from those of their rivals meaning that, in an echo of the pre-LLU days of ADSL, Internet service providers might not be able to offer much in the way of competition to BT.
"It's important that future products are attractive to potential wholesale partners if BT is going to see a return on its investment," Sky's deputy director of Strategy, Dougal Scott, told the Financial Times. "We'll continue to work closely with BT to provide input on how the trial products need to be modified."
The mobile phone operators are reportedly livid that BT is complaining against the Government's plans for the spectrum - especially because the firm isn't getting such a bad deal out of Digital Britain itself; it's going to be one of the main beneficiaries of the 50p broadband tax on all fixed lines designed to fund Next-Generation Access (NGA).
While the Department for Business, Innovation and Skills has already extended the consultation period to February 5th, at this point it appears unlikely BT - which is in any case seeking Government-sanctioned help to fill its pensions deficit - will be able to radically change the mind of the IBS and his colleagues through sending letters alone.
What's perhaps more likely is that commercial pressure from firms with as much clout as TalkTalk and Sky could cause BT Openreach to make its next-generation wholesale plans less rigid: they have the option of putting their money where their mouth is, and that's something BT can't necessarily afford.
Besieged are the Meek
For quite some time, Kip Meek - the Independent Spectrum Broker (ISB) - has been trying to cut a deal with the mobile phone operators to help achieve one of the most publicised Digital Britain goals: a USC of 2Mbit/s for every home in the land.
His proposals include that the frequencies Vodafone and O2 currently use for voice and text services be refarmed for mobile broadband; in exchange for shelling out on the infrastructure that's required to actually make that work, all five of the big mobile firms will be granted indefinite extensions to the licences they hold covering the 3G spectrum (due to expire in 2021).
But it's not just this that BT has taken issue with: despite Mr Meek wanting to implement a cap on the amount of the spectrum any one firm can hold, the telecoms giant is worried about how the spectrum currently used by the analogue TV signal (due to be switched of in 2012) and a new 2.6Ghz band will be sold off.
"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," the firm told The Guardian.
But whereas using mobile broadband to help fill in notspots would mainly benefit rural areas, the telecoms firm is rumoured to be wanting to gets its hands on a good deal of the 2.6Ghz spectrum to use for super-fast wireless broadband in urban areas.
"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," added a spokesperson from BT, which has sent the Department for Business, Innovation and Skills a letter outlining its stance.
Besieged Telecom
While the biggest home and business broadband firm gets on the Government's case on over its mobile plans, the second and forth biggest ISPs - TalkTalk and Sky respectively - are themselves getting on BT Openreach's back about its next-generation wholesale plans for its fibre optic network.
Its super-fast network - based around FTTC (fibre-to-the-cabinet) and FTTH (fibre-to-the-home) - is expected to cost around £1.5 billion; with that kind of expenditure Openreach is expected to need to take on wholesale deals in order to get a return on its investment - and all the friends it can get.
However, following his company's involvement in trials of BT's next-generation technology, TalkTalk chief executive Charles Dunstone says the current wholesale proposals are "not acceptable" - arguing the need for "something that is much more flexible."
The argument is that the wholesale offering isn't "flexible" enough to mean individual ISPs can differentiate their product from those of their rivals meaning that, in an echo of the pre-LLU days of ADSL, Internet service providers might not be able to offer much in the way of competition to BT.
"It's important that future products are attractive to potential wholesale partners if BT is going to see a return on its investment," Sky's deputy director of Strategy, Dougal Scott, told the Financial Times. "We'll continue to work closely with BT to provide input on how the trial products need to be modified."
Just BT it
The mobile phone operators are reportedly livid that BT is complaining against the Government's plans for the spectrum - especially because the firm isn't getting such a bad deal out of Digital Britain itself; it's going to be one of the main beneficiaries of the 50p broadband tax on all fixed lines designed to fund Next-Generation Access (NGA).
While the Department for Business, Innovation and Skills has already extended the consultation period to February 5th, at this point it appears unlikely BT - which is in any case seeking Government-sanctioned help to fill its pensions deficit - will be able to radically change the mind of the IBS and his colleagues through sending letters alone.
What's perhaps more likely is that commercial pressure from firms with as much clout as TalkTalk and Sky could cause BT Openreach to make its next-generation wholesale plans less rigid: they have the option of putting their money where their mouth is, and that's something BT can't necessarily afford.