Broadband debate reaches House of Lords

Posted on 1 May 2003 at 11:53

Words such as IPstream and Datastream have stirred the nodding members into consciousness, as Lord Avebury brings the broadband debate to the House of Lords.

In a speech on Tuesday, Lord Avebury voiced concerns over Oftel's broadband review that found the market is still dominated by BT, according to EU benchmarks.

'We want a fully competitive market. We do not believe that it exists at the moment because there is a significant market power in the hands of one company,' he said. 'I hope [Ofcom] will take a robust attitude to the development of competition in the industry.'

He put BT's growing market share of 57 per cent and its 70 to 80 per cent hold of new subscribers down to the company's focus on continued price cuts to its IPstream products. IPstream is the managed service where ISPs essentially rent BT's wholesale products.

However, he remarked that BT seemed to have pointedly ignored bringing the prices of its Datastream products in line with IPstream, although the company had said it would do so by March.

Datastream, which was forced into existence by Oftel to promote competition, allows ISPs that own their own networks to take their traffic straight on to their network from the exchanges, thus allowing them to create their own products. Tiscali, as the only UK consumer ISP to have taken up Datastream, has been able to offer 'midband' before BT, and will introduce a 1Mb ADSL service before the end of the year.

BT argues that Datastream customers can take advantage of other benefits such as lower minimum contracts and fatter pipes. However, a Tiscali spokesperson told us that even reducing minimum contracts to three months is a far cry from IPstream's one month minimum. She added: 'We don't need the fatter pipes these are designed for IPStream ISPs, and [BT is] still not addressing the inequality in pricing.' Tiscali has lodged a complaint with Oftel over what it considers BT's unfair pricing.

Lord Avebury summed up: 'We believe that the powers that are given to Ofcom in the [Communications] Bill will enable it to solve the problems of the kind I have outlined. I should sooner leave the Bill as it stands and rely upon the forces of Ofcom to deal with the problems of market penetration and competition that we know exist.'

Author: Matt Whipp