Implementing Oftel’s Broadband Strategy

John Russell

12 July 2002

Outline

• Oftel’s broadband strategy

• Key recent decisions

• Market developments

Oftel’s broadband strategy

• Goal = quality, choice and value for money • How - by promoting network competition and

competition in the supply of services • Technology-neutral approach• Intervention focused on bottlenecks caused by

BT dominance• Quarterly surveys, ad hoc research and

international benchmarking (Sarah Evans)

Key recent decisions

• BT’s ADSL products

• BT Marketing

• ATM Interconnection

• Local Loop Unbundling (LLU)

• Partial private circuits (PPCs)

Recent decisions - BT’s ADSL products

• Pricing - margin between BT’s wholesale and retail prices (SPs)

• Pricing - absolute level of wholesale prices (LLUOs)

Recent decisions-Marketing statement (21 May)

• Enable consumers to have easy access to information on what services are available to them

• Make clear how BT can market its services without acting anti-competitively

• Oftel will closely monitor BT’s compliance

Recent decisions-ATM interconnection (21 June)

• BT directed to provide ATM interconnection to other operators, to enable them to offer ADSL services

• BT also required to run a trial for an SDSL version of the interconnection service

Recent decisions - LLU

• March 2001, complaint that BT did not offer a ‘nearest equivalent’ to BT’s own facilities

• Directions of Oct 2001 (Co-mingling) and Dec 2001 (Access)

• Lower prices for co-location. Set-up dropping significantly

Recent decisions - PPCs

• PPCs allow operators to compete with BT in the leased lines market

• March 2001, Oftel required BT to negotiate provision of PPCs with 10 operators

• BT launched PPCs on 1 August 2001, Oftel received requests for determination on 2 August

Recent decisions - PPCs

• Requests for Determination from 8 OLOs split into 2 Phases:– Phase 1 - direction requires BT to make a

number of improvements to its wholesale leased lines products (14 June)

– Phase 2 - will resolve the more complex issues eg pricing and SLAs. Consultation August, decision October 2002

Market developments -availability

• ADSL - 66% (1115 exchanges)

• June 2002 - BT ADSL order registration system

• Cable modem access - 38%

• Satellite - 100%

• BFWA - 13%

Market developments - prices, April 02

£21

£26 £27 £27

£35

£0

£5

£10

£15

£20

£25

£30

£35

£40

Sweden UK US Germany France

£/m

on

th

Source: Oftel International Benchmarking reports, based on ADSL and cable modem tariffs valid as at April 02.

Market developments - take up

Source: Oftel.

0

100,000200,000

300,000

400,000

500,000600,000

700,000

800,000D

ec-0

0

Feb

-01

Ap

r-01

Jun

-01

Au

g-0

1

Oct

-01

Dec

-01

Feb

-02

Ap

r-02

Jun

-02

709kbroadbandcustomers

290k DSLcustomers

419k cablemodemcustomers

• Prices are down

• 20k new connections a week

• Service provider competition - DSL

• Network competition - cable

• Satellite and BFWA developments

• Interest in LLU

Conclusions