Broadband Bulletin Issue 6 - April 2005
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Observatory News
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Observatory appoints New
Project Manager
Dr James B. Waddell, Senior Research Associate, has been
appointed as the Project Manager for Broadband Wales Observatory at
the eCommerce Innovation Centre (eCIC) at Cardiff University
For the past 5 years James has been working on the Opportunity
Wales programme at eCIC where he developed an eCommerce Adviser
accreditation scheme, and a robust methodology and auditing process
for the delivery of eCommerce Support Services to approximately
10,000 businesses across Wales.
He has been seconded to the Observatory for the final year of
the Broadband Wales programme to continue the delivery of market
intelligence and strategic research outputs for eWales.
Commenting on his new position, "The final year of the
Observatory's work will be to capture the results and benefits of
the Broadband Wales programme and to provide analysis and
commentary for eWales on the expected demand for the next
generation of broadband data services.
The Observatory would therefore welcome contact from broadband
users in Wales who have got a great story to tell on how broadband
has impacted their business or their lifestyle."
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BT's 21CN for a competitive business advantage
In November 2006, BT will roll out their
new telecommunications infrastructure, 21C Network, in the Cardiff
area. Recently, Dr James B. Waddell, Project Manager at the
Broadband Wales Observatory took part in a BT Webinar discussing
the potential business benefits of the 21C Network and in
particular the increasing use of on-demand applications for small
to medium-sized businesses.
The half-an-hour discussion entitled "Gaining competitive
advantage in business with BT's 21st Century Network: Wales leading
the way!" can be viewed at
www.bttalkingbusiness.co.uk/online/index.php?tab=2.
Completion of a short on-line registration form is required to view
the programme and others in the series.
Regulatory Round-up
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Ofcom has published its Annual Plan for 2006/7 which
sets out nine priorities for the year including the promotion of
competition and innovation in voice and broadband services through
implementation of the Strategic Review of Telecommunications.
Ofcom has begun work assessing the effectiveness of the
broadband switching, migration and connection
processes.
Ofcom has proposed to deregulate BT retail phone cost
controls, citing the change in the telecoms market due to Voice
over IP, Local Loop Unbundling and competition from cable and other
providers.
Ofcom declared the UK as world leader in digital
television viewing when it published its Communications Market:
Digital TV Progress Report for the fourth-quarter of 2005.
Digital TV is now viewed by 70 percent of UK households.
Ofcom has published plans to release
new radio-spectrum
which may be used for broadband, wireless communication and mobile
multimedia services. The frequencies will be auctioned by
March 2007. Possible uses include mobile TV, wireless
broadband, satellite digital radio or wireless cameras at sporting
and other events.
http://www.ofcom.org.uk/Consultations
Ofcom has launched a consultation into geographic variations
to competitive conditions in the leased line market – including
leased lines to be used for broadband.
Closes – 8th June 2006
The European Commission (EC) has called for input on the
European Communication Policy, White Paper.
The consultation calls for comments on five areas for which
the White Paper proposes joint action to be taken:
- defining common principles guiding the communication activities
on European issues
- empowering citizens
- working with the media and new technologies
- understanding European public opinion
- doing the job together
Closes – 31st July 2006
Market News
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Broadband Bundled
Carphone Warehouse hit the headlines by launching "Free
Broadband, Forever, From Talk Talk".
Customers will pay a connection fee of £29.99, a monthly fee
of £9.99 plus a line rental charge of £11.00 for a package of
local, national and international phone calls with broadband access
up to 8Mbps.
However, customers will need to sign an 18 month contract and
will pay an additional £9.99 per month if their local exchange has
not been unbundled by Carphone Warehouse.
The company aims to unbundled 1,000 exchanges by May
2007.
Broadband from Carphone Warehouse will be offered under the
Talk Talk brand which claims a 10 percent market share of the UK
residential phone line market with 2.5million customers.
As at March 2006, Carphone Warehouse had 168,000 broadband
customers up from 50,000 in March 2005 according to a fourth
quarter trading update.
The company has stated its target of 3.5million residential
telecoms customers by March 2009 with over 50 percent taking
broadband.
NTL Merging with
Virgin
Agreement has been reached between NTL and Virgin Mobile which
should result in the two companies merging.
NTL has agreed to licence the Virgin brand for 30 years for
its consumer business. This enables NTL to trade as a company
under the Virgin brand umbrella.
Virgin Mobile will be merged in to NTL to complement the
existing cable television, phone and internet services.
NTL expects that the move will enable it to increase customer
base by taking advantage of the Virgin brand which has been
attached to everything from transatlantic flights to computer
games.
The company will also aim to cross-sell mobile services to
cable customers and vice-versa. This could boost NTL's cable
broadband customer base from the current figure of 2,630,300 that
resulted from the merger with Telewest which completed in March
2006.
NTL acquired Virgin.net in November 2004. This has
helped the cable company gain 32,300 broadband customers who
connect through ADSL.
Bulldog targets SMEs
Broadband un-bundler Bulldog has launched a new suite of
products aimed at Small and Medium enterprises (SMEs).
Research carried out by Bulldog showed that 45 percent of
businesses felt they could grow faster if they had access to the
right information and communications technology at the right price
and with the right support.
The SME packages are targeted at businesses with up to fifty
staff. Bulldog, owned by Cable and Wireless, has unbundled
some exchanges in Wales.
Tesco has agreed to distribute Bulldog CD-ROMs at 300 stores
in areas where the company has unbundled exchanges, in an attempt
to boost customer numbers.
Bulldog has so far unbundled 400 exchanges and aims to double
this figure by September.
Wimax from Pipex
One of two holders of Wimax licences in the UK, Pipex, has
announced plans to have several major cities covered by 2008.
The new venture, Pipex Wireless, will be majority owned by
Pipex but backed by Intel with a $25 million investment.
The other Wimax licence is held by PCWW.
BT Broadband in
Welsh
Welsh speakers can now order broadband from BT. The service is
provided by telephone through BT's Welsh language bureau.
Tel: 0800 800 288
An on-line broadband ordering service is also now
available.
BT has also recently added a Welsh language option to its
on-line phone book.
Customers who currently receive broadband up to 2 Mbps from BT
will need to register if they wish to receive speeds of up to 8
Mbps.
BT has been upgrading exchanges, including some in Wales, to
provide 8 Mbps services.
BT has announced plans to upgrade all of its exchanges to
provide faster broadband speeds.
The telecoms company will also be improving its online
availability checker to show the expected speed available for each
of the individual 1.4 million lines in Wales.
Ann Beynon, BT's Director Wales, said: "BT is committed to
making these 21st century high speed communications available to as
many communities as possible over the widest area, for everyone who
lives and works in Wales."
Wanadoo claims VOIP lead
Broadband provider Wanadoo has claimed that with 150,000
customers signed up to the "Wireless & talk" service, it is
Britain's number leading voice over IP provider.
The service enables customers to make phone calls over their
broadband connection using a normal telephone. Wanadoo is
owned by France Telecom.
UK fastest growing ICT market in Western Europe
The European Information Technology Observatory (EITO) has
published its 2006 report which shows the overall ICT market growth
in Europe is slowing down with 3.2% expected in 2006 compared with
3.6% in 2005.
However, the UK ICT market is expected to show a 4.2% growth
in 2006 compared with 3.5% in 2005.
Expected growth for 2006:
· UK software
industry 6.1%
· UK IT services
industry 5.1%
· UK IT hardware
industry 3.9%
· UK telecoms
industry 3.6%
Broadband League: UK Remains in 13th place
The latest figures from the Organisation for Economic
Cooperation and Development (OECD) show Iceland as the leading
nation with 26.7 broadband subscribers per 100 inhabitants.
The UK has 15.9 subscribers per 100 inhabitants, one place
behind the US with 16.8.
IT and the Welsh language
The Welsh Language Board has released its Strategy Document
for IT and the Welsh language following extensive
consultation.
The document, named "Iaith Pawb", is available online in two
parts:
1. A Strategy Document which
notes suggestions for advancing the Welsh Language in the field of
IT;
2. A Standards Document, which
is a technical document for the use of individuals and institutions
wishing to provide IT facilities of all types bilingually.
Alun Pugh, Minister for Culture, the Welsh Language and Sport,
commented:
"The Welsh Assembly Government's strategic plan for a bilingual
Wales, Iaith Pawb, notes the need to mainstream the Welsh language
in a large number of areas, including information technology. IT is
constantly developing, and this strategy clearly shows how we can
ensure that Welsh plays a part in this all important field. The
Board is to be congratulated for this work."
MTV launches VOD in UK
MTV is to launch its Video on Demand service "MTV Overdrive"
in the UK. The service will feature music videos, movie
trailers, programme highlights and extra scenes from 23rd April
2006.
LLU Explained
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What is Local Loop Unbundling?
Local Loop Unbundling (LLU) is the process where the Incumbent
Local Exchange Carrier (ILEC), BT and Kingston in the UK, allow
other telecommunications companies access to the twisted-pair
copper cables which run from the telephone exchange to customer's
premises.
This allows operators (ISPs and Telecoms companies) to upgrade
individual lines using DSL technology telephony and broadband
services direct to the customer. The customer is then able to have
a choice of telecommunications service providers and they are not
reliant on the incumbent operator.
The local loop is still owned in its entirety by the incumbent
local exchange carrier (ILEC).
How can Unbundling be made successful?
In order for ISPs and telecommunications companies to make LLU
both commercially and economically viable they need to locate their
equipment in ILEC exchanges that have a high population density so
that the LLU entrant can expect a reasonable take-up of
customers.
Here is where the problem lies as most if not all LLU entrants
have chosen to install their equipment within the same
exchange. Subsequently ILECs have delayed allowing new
operators access as they have to build new collocation facilities
to house them all.
Therefore one of the major costs is actually putting equipment
into an exchange, the other is what is know as "backhaul" or
connecting the equipment back to the LLU supplier's own network and
infrastructure.
All LLU operators act in secret from each other and install
their own equipment and their own backhaul.
Who is the competition?
In reality it is BT who is the real competition, as they
account for over 85% of the infrastructure in the UK. They have SMP
(Significant Market Power) and are the dominant player. Even if a
LLU entrant puts their own equipment into the exchange, it's likely
that they'll purchase (at least some of) their backhaul from BT,
because they don't have their own network near that exchange and
it's expensive to dig fibre.
Who is opposed to LLU?
LLU is in general opposed by ILECs, which in the major of
cases used to be state monopoly enterprises before the
telecommunications sector was liberalised.
ILECs argue that LLU affects infrastructure-based competition
and technical innovation because new entrants prefer to parasitise
upon the incumbents network instead of building their own. Also the
regulatory interference required to make LLU work, that is to set
the price, is detrimental to the market.
Who is for LLU?
New entrants on the other hand, argue that, since they cannot
economically duplicate the incumbent's local loop, they are
prevented from providing certain services such as ADSL
(Asymmetrical Digital Subscriber Line), without the use of LLU,
which in turn allows the incumbents such as BT to monopolise the
respective market and subsequently stifle innovation.
They also point out that ILECs did not construct their local
loop in a competitive, risk-fraught environment but under state
monopoly protection and using taxpayer money, which according to
new entrants means that ILECs ought not to be entitled to continue
to exact monopoly rents from the local loop.
Regulation:
LLU in the UK is regulated by Ofcom (Office of Communications)
which has appointed an Independent Telecommunications
Adjudicator.
The EU Regulation on LLU requires incumbents to offer shared
access (or line sharing). Line sharing enables operators and the
incumbents to utilise the same line. Consumers can acquire data
services from an operator while retaining the voice services of the
incumbent. Some operators may choose to offer data services only,
so with line sharing consumers can retain their BT service for
voice calls while getting higher bandwidth services from another
operator without needing to install a second line.
The EU Regulation also requires that other operators can
interconnect with the local access network at a point between the
incumbent's site and the end user. This arrangement is referred to
as sub-loop unbundling.
In sub-loop unbundling the connection point is the Primary
Connection Points (PCPs) which are green street cabinets. Sub-loop
unbundling can be used for emerging technologies such as VDSL (Very
high bit-rate Digital Subscriber Line), where the equipment needs
to be much closer to the home to deliver very high bandwidth
services. An optical fibre would deliver the high-speed services to
the local green cabinet and VDSL used to send them along the copper
pair to the customer's premises.
The EC Regulation on Local Loop Unbundling (EC/2887/2000) came
into force on 2nd January 2001. The Regulation requires incumbent
operators throughout Europe to offer unbundled access to their
local loops on reasonable request. Condition 83 sits alongside the
regulation and provides the detail, which may be needed to ensure
that the Regulation can be applied effectively in the UK. The text
of the regulation can be found at:
http://europa.eu.int/eur-lex/en/lif/dat/2000/en_300R2887.html
Telecommunications Adjudicator Scheme Participants:
Below is a list of the operators that have signed up to the
Telecommunications Adjudicator Scheme. The Scheme was launched by
Ofcom to help accelerate the implementation and delivery of fit for
purpose and appropriately industrialised products and processes for
delivering LLU.
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Operator
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Website
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AOL
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Be Un Limited
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Bulldog Communications Ltd
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Carphone Warehouse/Opal Telecoms
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Easynet
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Kingston Communications
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NTL
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Pipex Communications Ltd
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Swedia Networks UK Ltd
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Thus
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Tiscali UK Ltd
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Updata Infrastructure
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Video Networks Ltd
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Wanadoo UK plc
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Zen Internet
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OTA Update for February 2006
The Office of the Telecommunications Adjudicator announced on
3rd March 2006 that the number of unbundled lines exceeded
300,000. This is up from 250,000 in January 2006.
The OTA predicts that the number will grow to between two and
three million by the end of 2006 but has expressed disappointed in
progress in some areas.
The Telecommunications Adjudicator aims to facilitate swift
implementation of the processes necessary to enable competitors to
gain access to BT's local loop on an equivalent basis to that
enjoyed by BT's own businesses.
Local Loop Unbundling Progress
Cable and Wireless (Bulldog)
Current number of exchanges: 400
Target date: September 2006
Target number of exchanges: 800
Tiscali
Current number of exchanges: 26
Pipex
Target date: End of 2006
Target number of exchanges: 100
Carphone Warehouse (Talk Talk)
Target date: May 2007
Target number of exchanges: 1,000
Data sources:
Please note these figures are the most up to date and accurate
figures publicly available at time of going to press.
Exact figures may vary.
Useful Links
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Broadband Wales Programme
Visit the Broadband Wales Programme website for information on
the benefits that broadband can bring for you
www.wales.gov.uk/broadband
Broadband for Life
Other News and Events
Broadband Brokerage Scheme
If you want broadband but can't get it, or you need a faster
service than is currently available to you, then you should
register your requirements via the Broadband Brokerage
Scheme.