MPs launch attack on BT and Oftel

Savage parliamentary criticism of telecom regulator Oftel's local competition policy has added to the Government's existing worries that mobile networks have paid an unsupportable price for third-generation (3G) licences.

A Trade and Industry Committee report this week warns that local loop unbundling - the opening up of BT local exchanges to competitors - is descending into "farce". It blames foot-dragging by BT, weak intervention by Oftel and a lack of demand from rival operators.

Unbundling allows competing carriers to offer high-speed internet access over BT's network and is central to the Government's plans to make the UK a hub for ebusiness.

The Committee criticised the approach of Oftel director general David Edmonds. "We would regard him as being unduly gentle given the rough trade with whom he was dealing," said Committee chairman Martin O'Neill. "This sorry tale does not suggest a high level of administrative competence among those involved."

The report adds that although BT will offer full unbundling by June, it will be November before rivals can bring competing services to market. Rivals won't get physical access to BT's exchanges until May or June 2001.

"There is still a considerable amount of uncertainty surrounding the timing of unbundling and the ultimate delivery of high-speed services to customers," continues the report. It also notes that rivals have scaled back their plans for rollout.

"The Government has done a pretty spectacular job of extracting the maximum amount from 3G mobile licences, but that episode was the straw that broke the camel's back," said Robin Duke-Woolley, a senior consultant at telecoms consultancy Schema.

Operators have thrown £90bn at 3G licences across Europe. The European Commission now wants member states to defer licence payments or allow operators to share infrastructure. Others suggest that governments should reinvest the licence money in broadband infrastructure.

"We have always believed that the 3G auction was inefficient and a tax on users because the cost will be passed on," said a Communications Management Association spokesman.

"Our view is that some significant chunk of that money should be spent on the broadband rollout. There must be some partnership between private business and the state. Rollout cannot be left to market forces," he added.

See also:

3G: Beyond the hype

The third-generation (3G) licence frenzy has left mobile operators with empty pockets and a head full of hype, wondering whether they can find a killer app to justify the billions spent on the licences.  01 May 2001

Like this story? Spread the news by clicking below:

 del.icio.us     Digg this     reddit!