Dave Bailey

BT's gain is Digital Britain's loss

A recent proposal by Ofcom and a ruling by the Court of Appeal may hinder the progress of Digital Britain

Written by Dave Bailey

It will soon be 10 years since I first began writing columns – 1 April 2000 to be precise – and looking back over past pieces of work, I see I have had a stab at most technology launches and technology-related gizmos and gadgets throughout the decade.

So what has changed in 10 years? Not much. BT is still trying to squeeze its competitors, this time to plug its pension fund – not a small one either at £9bn.

In a consultation just before Christmas, UK communications regulator Ofcom put forward the proposal that BT, via its network infrastructure arm Openreach, could bump up the prices it charges for phone and broadband connections to other ISPs.

A four per cent hike does not sound much, but aside from saving BT from having to scratch around for an extra £9bn to plug its pension gap, it also has the effect of making its broadband offering four per cent more competitive.

This could all blow over and Ofcom might tell BT that it is not willing to let the incumbent hike up wholesale charges that would help compensate for a pensions deficit that BT says was caused by market conditions and an aging population.

Would BT getting the go-ahead be another case of preferential treatment for the firm? Cynics would say of course it is, citing the recent case brought by fibre network provider Vtesse Networks in the Court of Appeal against the Valuations Office Agency and HM Government.

In this case, an ISP is trying to do what the final Digital Britain report wants – that is, make an organisation’s costs for putting in fibre connections as small as possible. The upshot of that would be a faster, more competitive, more comprehensive rollout of optical fibre in the UK.

So one of BT’s competitors trying to roll out competitive optical fibre connectivity finds that a judgment against it is upheld in the Court of Appeal, meaning it has to pay more than BT pays for its fibre connections.

It is not BT’s fault, but the upshot still remains the same – another blow for Digital Britain.

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