BT rails against 'unfair criticism'

BT chairman Sir Iain Vallance today strongly defended the operator's stance on broadband and local call charges against a barrage of recent criticism.

Speaking on the second day of the Telecom Users Association's annual conferencein Brighton, Vallance blamed telecoms regulator Oftel for forcing up local call charges and explained why the company had apparently been sitting on high speed ADSL technology for four years.

"It's now taken as fact that because of antiquated technology and prices, BT stands between the UK and its destiny," Vallance told around 200 users and vendors. "BT has clearly lost a war of words in the new e-economy and in my experience we must deal with the peace that follows."

Oftel today said BT would be forced to open up its local exchanges so competitors could install their own high bandwidth ADSL technology, something BT was strongly opposed to.

BT conducted its first trial of ADSL technology - which allows data transfer over copper phone lines at 16 times the speed of ISDN or 40 times that of a standard momdem - more than four years ago, yet it only recently announced plans to equip 400 local exchanges with the technology by March 2000.

Vallance said BT made the difficult but correct decision not to deploy ADSL at the time for several reasons: the high cost at the time of a national rollout; a lack of common standards across Europe; the technology not being robust enough; demand not being sufficient; and the prospect of other broadband technologies such as third generation mobile.

"I simply don't buy the idea that knowledge is all and experience counts for nothing," he said, indirectly citing Iridium, the failing satellite phone network, as an example of a new telecoms technology that did not take off.

BT is under pressure from ISPs and users to cut local call charges for Internet access. Vallance blamed Oftel for high local call charges, saying the regulator's tight limits on line rental price increases had forced it to increase call charges.

p>Cable companies were also given easy regulatory conditions that meant they didn't have to build out as far as they could.

"BT's local peak rate call charges drifted up as a result," said Vallance. "This is an economic model more or less peculiar to the UK, at least for the time being."

Vallance also criticised the number translation service, the call revenue sharing system used to fund free ISPs. For a peak rate local call, 74 per cent of the call revenue goes to the terminating operator, 15 per cent is value added tax and BT gets 11 per cent. With the number translation service, the terminating operator gets 84 per cent and BT gets one per cent, Vallance claimed.

"In the UK we have apparently free Internet, but ISPs are in fact funded by levies on BT call charges," he said.

The system is due to be reviewed and could be restricted to voice calls, or superseded by 'always on' ADSL, either of which would deprive free ISPs of this valuable source of revenue.

"There's no prizes for guessing who will face the wrath," said Vallance.

"Everyone, no matter how inexperienced, thinks they know better than BT"Iain Vallance