Insight

Beating the business broadband monopoly

By Charlie Knight |

 

A coalition of some of the biggest names in telecommunications have complained to Ofcom about BT’s ‘monopoly’ over business broadband services. The group have asked the regulator to allow companies to lay their own cables in BT ducts and to use their own equipment to control BT cables to increase competition and innovation in the market.

The UK Competitive Telecommunication Association (UKCTA) includes such telecoms heavyweights as Sky, EE, TalkTalk, Virgin Media, and Vodafone. The group believes that BT’s infrastructure division Openreach has stifled innovation by restricting competition within business broadband services. The UKCTA, many of whom utilise BTs network of cables to provide customers with their services,  argue that while BT have delivered falling prices and rising speeds for BT customers, their record of responding to new line requests and fixing reported faults has harmed their businesses.

BT claim that allowing other companies to lay cables in BT ducts and use their own equipment to control BT cables will ultimately increase costs to the end user and that they voluntarily publish reports on Openreach service performance as part of its commitment to improving service for everyone. It is true that adding new cables or technology to control existing cables would require a great deal of investment for companies and precisely how they would cover these costs has not yet been discussed. It isn’t unreasonable however to believe that they would be passed on to the consumer, at least in the short term. 

Any company that did decide to move into this market would not only need to invest in the physical cable and its connection, but also a large number of permanent and contract staff to build and maintain operations in this new market. Depending on the level of this demand, we could see those with experience working in fixed-line broadband and systems implementation suddenly being offered better packages to lure the top talent to these newly created roles.

If the UKCTA get their way and BT are forced to allow other companies to lay their own cables in BT ducts and use their own equipment to manage BT cables, consumers may see an initial price rise to cover the associated costs. The alternative would be that companies simply take the financial hit in the short term and hope that the increased levels of service will reap rewards in the future. If enough organisations take advantage of any changes, we may see an increase in competition and better service with lower prices for the end user. 

However, these changes could lead to a polarisation of costs and service levels between population centres and more rural communities. With new companies creating their own cable networks, why would they invest money in areas that are unlikely to ever have a population density that would make the investment viable? Whatever Ofcom decides to do about the UKCTA complaint, they should keep at the forefront of their mind that good service and competitive prices should be available to all and not just those living in population centres.

Source: Vine 14


Charlie Knight

Written by Charlie Knight

Charlie has 3 years experience in digital marketing, helping B2B technology companies grow their businesses through inbound marketing before joining Vine Resources as Content Marketing Manager. In his spare time, Charlie enjoys travelling and the great outdoors, and he recently hiked from Mexico to Canada for charity.