Britain Might Get Cheaper High-Speed Data Connections
Telecommunications regulator Ofcom wants dominant provider BT to lower its prices over next three years to increase market competition and create more interest in Ethernet services.
Top 10 Tech Fails Of 2012
(click image for larger view and for slideshow)
British communications regulator Ofcom is proposing tariffs on the U.K.'s leading business and consumer telco, BT. According to the proposal, BT would be allowed to offer leased line charges based on older technology that can "rise modestly to reflect higher costs in this declining market," but any newer Ethernet-based product charges would be controlled.
The intention is to both provide the market with a cheaper alternative and also to create an incentive for customers to migrate to newer, more efficient technologies. Bottom line: U.K. enterprises could see the prices they pay for their high-speed data links drop soon -- if the plan is approved by lawmakers.
Ofcom also wants to see deregulation of the market for longer-distance legacy leased lines, and to require BT to provide its regulated Ethernet services on the same basis to all retail providers. The aim is to "help meet the growing demand for fast data services from the likes of schools, universities, mobile operators, Internet providers and consumers," it said.
One-time state-controlled BT, formerly British Telecom, dominates the national business and consumer phone and broadband market -- it exited the cellular market in 2001 -- despite facing increased competition since it became a private sector company under Prime Minister Margaret Thatcher in 1984.
A particular sinecure for the company has been data communications infrastructure, namely the wholesale leased line business, a £2 billion ($3 billion) market, which is the way businesses, mobile service providers and broadband providers transfer data over their networks and where BT is the major local provider. But Ofcom has been investigating BT's pricing and practices in that sector, conducting an in-depth Business Connectivity Market Review, the main output of which is to impose new price controls on the vendor.
Specifically, Ofcom is proposing that BT's high-bandwidth wholesale leased line services operating at any speed above 1 Gbps be regulated, because BT "has been found to have 'significant market power' in this relatively new market." For Ethernet products with speeds up to and including 1 Gbps, Ofcom intends to push for "significant price reductions outside London," at 11% below inflation per year over the next three years.
There is a caveat to the proposals outsiders might find quaint: They would apply to "all parts of the U.K. except London and Hull," the former as there is enough competition to BK there, but the latter because it was the only town in the U.K. that didn't become hooked up to British Telecom's predecessor, The General Post Office (GPO). As a result Hull boasts white -- no red -- versions of the iconic British phone booth.
CIOs are cautioned to not reduce their budgets quite yet. The next step is for lawmakers in the European Commission to make the final decision on Ofcom's proposals, and under European Union law Brussels has a month to give its approval.
If the proposals go through, though, prices could come down soon: the new controls would take effect in April and remain in place for three years -- a change that could help many enterprise budgets, as well as potentially get a bit more competition into the British data transmission and services market.
Attend Interop Las Vegas, May 6-10, and attend the most thorough training on Apple Deployment at the NEW Mac & iOS IT Conference. Use Priority Code DIPR02 by March 2 to save up to $500 off the price of Conference Passes. Join us in Las Vegas for access to 125+ workshops and conference classes, 350+ exhibiting companies, and the latest technology. Register for Interop today!
How Enterprises Are Attacking the IT Security EnterpriseTo learn more about what organizations are doing to tackle attacks and threats we surveyed a group of 300 IT and infosec professionals to find out what their biggest IT security challenges are and what they're doing to defend against today's threats. Download the report to see what they're saying.
2017 State of IT ReportIn today's technology-driven world, "innovation" has become a basic expectation. IT leaders are tasked with making technical magic, improving customer experience, and boosting the bottom line -- yet often without any increase to the IT budget. How are organizations striking the balance between new initiatives and cost control? Download our report to learn about the biggest challenges and how savvy IT executives are overcoming them.