Thursday, April 07, 2011

UK - ISPs call on Govt to reduce the prices for access to BT's physical infrastructure

[eweek europe] ISPs are threatening to boycott the bidding process for super-fast broadband trials

BT is striking back after competing ISPs sent letters of complaint to communications minister Ed Vaizey and the company itself.

BT is particularly incensed that the letter was leaked to the press before it received a copy – putting it on its back foot and making it seem reluctant to answer journalists’ questions.

The ISPs called on Vaizey to force BT to reduce its Physical Infrastructure Access (PIA) prices as well as the related terms and conditions. PIA is the charge that BT makes to allow the ISPs to use its existing poles and ducts for laying their own optical fibre cables. Signatories to the letter were Fujitsu, Geo, Talk Talk, Virgin Media and Vtesse.

PIA is being seen as an obstacle in the way of achieving the government’s £830 million push to bring widespread super-fast broadband to Britain by 2015. Bids to run pilot schemes to pave the way for the rollout are due to be received by Broadband Delivery UK (BDUK), the organisation controlling the initiative.

The ISPs argue in their letter that the charges from BT effectively tip the playing field because they have to factor in costs for access that are four or five times more than BT’s base costs. The companies are threatening to boycott the bidding process unless something is done.

BT is standing its ground and has replied with a statement expressing its disappointment at being attacked so openly and pointing out that its duct access prices are comparable with European prices. It then claimed that its plans for pole access have been held up due to “others” delaying their own trials.

“Once those trials are underway, we will be in a far better position to understand the costs involved, and so we would encourage these companies to start trialling with us as soon as possible,” it added.

The implication that prices could alter once the trials are underway offers cold comfort to the ISPs. Their counter argument is that they would have to sign up for the trials with no real undertaking from BT that prices would be reduced to what they see as a reasonable level.

With both parties entrenched in their positions, the next step appears to be up to Vaizey, BDUK and the government to find a compromise that will get all the companies negotiating a suitable solution. If action is not forthcoming it would appear that the 2015 deadline would not be met, potentially harming the competitiveness of British businesses in international markets.

ISPs’ Broadband Battle Threatens Vaizey’s Plans

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