James Ashton, The Sunday Times
We've made some changes
to The Sunday Times
THE new BT chief executive, Ian Livingston, is challenging the telecoms regulator Ofcom to make sweeping changes to his company's universal service obligation (USO) before he will commit to investing billions of pounds in a new fibre-optic network.
He wants firmer assurances from Ofcom chief executive Ed Richards that BT will not be left with soaring running costs and thinner profits if it installs fibre optics designed to carry a growing volume of television programmes and data to homes.
"We will not spend material amounts of money that will guarantee that we lose money for shareholders," said Livingston, who takes over from Ben Verwaayen in June. "It's just not going to happen."
The key definition of its obligation — rooted in BT's history as a state-owned telecoms monopoly — is that it must offer a fixed-line service at an affordable price for anyone in Britain who wants one. Livingston argues that this needs amending if it is to divert cash into more sophisticated services and move away from its legacy of copper wires.
"We want changes to the USO to reflect a fibre world," he said. "There are 200-odd service providers. Why should all the USO fall on BT Retail?"
BT's key concern is that it is not forced to continue maintaining its old copper network when new fibre infrastructure has been built, hence doubling its operating costs.
It also wants assurances that it will not become liable to pay compensation to rival operators such as Carphone Warehouse, which have spent millions installing their own equipment in telephone exchanges to control the "last mile" running into the home.
The government wants BT to commit to an upgrade of the broadband network that could cost as much as £15 billion to keep up with connection speeds of 100 Megabits per second being deployed in France and Germany.
BT is testing the water by installing high-speed fibre optics at a new-build scheme in Ebbsfleet, Kent.
The upgrade issue was back in the spotlight last week when rival internet providers moaned that the runaway success of BBC's iPlayer catch-up service was clogging up the network. Britain's average broadband speed is currently 4.6Mb per second.
BT has been campaigning for other parts of its USO to be reduced or ended. In particular, it sees little point in maintaining 24,000 payphones that consistently fail to make money because of the popularity of mobile phones.
"We have got the hurt and the restrictions of the legacy," said Livingston. "Some of the restrictions have been removed. Ofcom has been a bold organisation because it would be easier not to change things. "But we still have got to move on. Things that were rigid in the past world have to be changed for the future."
In 2006, Ofcom estimated that the cost to BT of the USO was between £52m and £74m a year.
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As a state owned company they like the Goverment that controls them, they will only be interested in making money.
Remember they are the company that fine their customers eighteen pounds a year if they pay their bills by cheque.
peter gee, bognor regis, west sussex
Lets be honest about this. If BT does not make an investment soon into a new infrastructure then they will be left without any profit because the wireless networks will have overtaken them.
Yes they need freedom to make change, but not at the taxpayers expense.
Norman, Nottingham,
The Times needs to up-date the BT logo...We have moved on.
Pat, FL, USA Ex Pat,
I pay dearly for a 2Mbit E1 but it's rare day that I see more than 100kbit/sec . If only we had something even close to BT here. Still, the sun also shines.
Jim Hatch, Acapulco, Mexico
ita a funny world when the government forces bt to maintain thousands of public payphones in the uk that are vandalised.
over and over again, this has cost millions of pounds since privatisation. according to the government this is an essential community service, what a waste of money, somebody should tell them weve all had mobiles for years. what a pity they do not apply this same logic to their own natinalsed company called the post office and abandon their Post Office closre programme.
mick riley, leeds, england
It is quite clear in a advanced technological society, we can not leave the infrastructure,of improving the quality of life for millions of people, in private hands.BT's claim that its shareholders take priority over the technological need of our society as a whole, is based purelyin Dickensian economics.
As the banks as a 19th century throwback have shown they can not protect people from losing money they hold. Hence needing a government guarrenttee pegged at £30,00, never seriously tested in a crisis,until the collapse of NORTHERN ROCK. It was clear in these conditions Nationalization was the only real way of protecting peoples savings and accounts.
It should in these factors,be seen that private enterprise at these levels is not working,and were the major evolution of the means of production in vital sectors is concerned.
BANKS,and BT, should specififcaly be Nationalised as these are prime bodies for the well being of the whole, and this will be the political and social answer.
Bill Mclinden, liverpool, england
Well I worked for BT up until 2004 the phone boxes need to be taken over by the government, however maybe the government could cut BT some slack after all they piled on the 6 billion debt for the bidding war in 2000 for 3g licences which still only has a 74% coverage area in the UK wadte of money really.
Tax breaks with the provision of inward investment of fibre to the home would pay dividends for many decades as nobody knows the actual capacity possible with optic fibre.
They would also need Government clearence to dig up anywhere for this provision as this has been the main bug bear for contracter companies previously having red tape prior to any permission to dig anywhere to assit the fully equipped media frenzy the UK needs for the future otherwise we are going to be in the dark ages behind Europe and Asia more so now.
Lawrence M`intosh, Liverpool,
I think BT should be made to install better networks and deliver to customers better service. I am a BT customer and my broadband as is usuall pathetic. BT claim that they do a good job but in reality they are far from it in recent years their profits have sky-rocketed and investment in infrastructure has not. Where has this profit gone? Into the pockets of the managers of course and to pay record salaries and pay-offs for directors.
Euan Stewart, Glasgow, Scotland,
We do take BT for granted!
joe c, london,
Terrible article confusing the issue of iPlayer with that of high speed to the home.
The amount of bandwidth available to the home through current technology (ADSL) is more than enough for the iPlayer. The only congestion is because BT and internet service providers want to save money by not providing enough bandwidth for all users from the main internet backbone to the local exchange. Their current business models are based on only having to provide 1/50th of the bandwidth to/from the exchange they provide to/from the home.
Ben, Cambridge,
Bt want the money for line rental for not doing a fat lot......
Surely some clever person sat behind a desk in some high rise white washed air conditioned offices away from the real world would've had the foresight to work out that one day the technology would change and they as the monopoly holder would have to replace this, but again money hasnt been set aside for this time due to Bt's lack of vision and it wants the obligation to fall wholesale on everyone when not every one has an equal chance bt need to get a grip and stop moaning!
Rob, walsall, United Kingdom
Thank god for that, give BT a chance.
Ray, Bangor, Gwynedd
Seeing BT has a virtual monopoly on telecoms infrastructure in the UK, I think it's extremely cheeky of Livingstone (Livingstone... now where has that name cropped up before? Oh yes...) to grizzle about the USO.
It's the price of being the monopoly holder!
The reality is that he wants to minimise costs and minimise investment so BT shares remain buoyant, so shareholders get nice dividends and board members get generous bonuses - quality of service doesn't figure in those calculations, which is why the UK's infrastructure is lagging behind... Japan, Korea, France, Germany, Sweden... the list is long and embarrassing,
Mr Livingstone needs to realise that if he wants BT to continue to enjoy the market advantage it currently enjoys - and it does, despite the smoke and mirrors OFCOM is happy to accept - then BT is going to have to bite the bullet and INVEST the shareholders money for a change!
Chris, St Leonards, UK
There should be a severence of B.T. retail from the U.S.O. operation. The rail service has' railtrack' to maintain the lines, signaling etc.
T.James., sheffield, Yorkshire
the internet speed in weston super mare is 5.0 mps thats bt for you. If ofcom does overtake bt i think we would ALL be happy with those speeds let alone cost of installation of bt and line rental and charges for storage space
brian medland, weston super mare,