BT is getting broken up internally into different wholesale and retail divisions separated by Chinese walls. The newly announced blob of assets and people is the typographically-challenged openreach. This isolates the local loop into its own business unit.

It seems that openreach will not be allowed to tip:

* The undertakings now make it clearer that [OE]openreach[base '] is expected to be the primary sales channel for its own products, and that it may only sell to communications providers, not to end-users. Similarly, the role of BT Wholesale has been clarified.

There[base ']s some doubt as to the effectiveness of this arrangement. But let[base ']s assume it works. I was wondering: what[base ']s the smallest unit of [base "]communications provider[per thou] we[base ']re likely to see? This is an interesting question because it defines how close to the end user openreach can push itself. As far as I can tell, the answer is a municipality that creates a subsidiary legal entity for communications services. So maybe this could have an unintended consequence of strengthening muni networks?

Openreach could also produce a lot of tension inside BT, as it will possibly undermine the 21CN plans. Will openreach be able to divert traffic onto alternative closed IP networks for TV and gaming, plus the open public Internet? Will BT Wholesale be stiffed with the 21CN bill whilst openreach gathers rents from its access bottleneck? I think the metrics that determine the bonus payment of the head of openreach should be published for us all to see!

One last, semi-related, thought. Spectrum policy is supposed to operate in the public interest by allocating out the supposedly scarce airwaves in an optimal manner. Net campaigners want more unlicensed spectrum for a number of reasons, including municipal networks. But what if they also turned the tables round, and said: [base "]OK, so we[base ']re going to have slices of spectrum reserved for particular uses. Let[base ']s carve out a slice for municipal networks alone.[per thou] And look over there [~] a juicy slice of public TV spectrum just about to come available! Heh, if openreach is about access, their regulatory lawyers could have rather a different outlook to the rest of BT[base ']s.

Will BT be able to finesse the regulatory assault with the parts acting in the interests of the whole, or has Ofcom just unleashed a round of insurgency and internal guerilla warfare? I watch with interest!

10:26:36 AM    comment   

British broadband got a big boost today, when British Telecom decided to spin off its local loop operations, giving rivals a fighting chance, reports The Guardian. Annelise Berendt, a senior analyst with Ovum tells the news paper that OpenReach (BT[base ']s spin-off) [base "]sows the seeds of a new industry structure [sigma] This is a major opportunity for the UK telecoms industry to bury some of the regulatory bickering of the past.[per thou] The new division will have sales of $7.2 billion, and 30,000 employees. Cable & Wireless is not impressed by this, but others welcomed the decision. BT is using the spin-off as an excuse for less regulation. While the spin-off is not exactly a [base "]real one[per thou] it does help smaller players like Bulldog, AOL, EasyNet and OneTel get easier access to the last mile. I wish FCC would enforce something like this in the US as well, but frankly there is more likelihood of a bridge going for sale in Brooklyn.

10:23:47 AM    comment