Mps Hear Evidence On Uk Broadband

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MPs will report on the state of UK's broadband market

Tuesday, 11 November, 2003

A committee of MPs has been hearing evidence from major net providers and watchdogs about broadband in Britain.

BT told the Trade and Industry inquiry it wants fewer restrictions in the telecoms industry to help create a "21st Century" high-speed net.

But service provider industry body, ISPA, has said more regulation is needed to ensure fair competition.

The Committee was told Britain has the second-largest and fastest-growing broadband market in Europe.

Dominance defence

The inquiry by the select committee, chaired by Labour MP Martin O'Neill, has been set up to examine the progress of high-speed net roll-out across Britain, via phone lines, cable and satellite.

Among those joining BT in giving evidence were net providers AOL, NTL, Freeserve, and telecoms regulatory watchdog Oftel.

Defending BT's position as the dominant player in the ADSL (Asymmetric Digital Subscriber Line) market, chief executive Ben Verwaayen said looser regulation would encourage BT investors to create a 21st Century network.

"This network would help the UK to develop the type of 'knowledge economy' that is essential if the UK is to remain competitive in the future," BT said in a statement.

At the moment, the industry is regulated by Oftel, but a new "super" watchdog - Ofcom - takes over regulatory duties in December.

BT said it hoped the new body would usher in a different, more flexible approach which would encourage innovation and investment in broadband.

MPs were also told a more proactive approach from the public-sector to encourage partnerships across the UK would help drive broadband into rural areas.

Uneven coverage

Currently, 80% of UK's population can get access to broadband net via fixed ADSL, but much of that is concentrated in urban areas.

That is expected to rise to 90% during 2004, said BT.

Cable broadband offered by companies like NTL and Telewest reaches about 40% of the population.

Oftel told the Committee it was continuing to encourage competition and that there were now 2.6m broadband connections in the country, with more than 30,000 new connections a week.

Restrictions placed on BT after deregulation of the telecoms market means it has to make its products available to other service providers at wholesale prices to ensure they can compete fairly on price.

About 150 net service providers compete with BT to sell ADSL, but many are still critical about the grip it has on ADSL delivery.

Freeserve told the Committee a more vigorous adjustment to local loop unbundling costs would let the competition move away from dependence on BT and offer new services.

The Committee makes its final report on the effect of BT's roll-out of ADSL and access to the market for retail broadband providers at the end of the year.

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