It?s not been a happy time for BT, which now faces a very public confrontation with the Government over the legality of the proposed windfall tax. I?m not a great fan of BT, but I?m not sure profit-capping is the best way to penalise the company?s market dominance.
BT?s principal problem is that, despite what you might feel about its products and services, it is just not a very likeable company.
Many people still feel a lingering resentment about the fact that the Post Office?s communications system that BT inherited ?belonged? to the nation, and had been built over a period of time with public money. This is nonsense, if only because the newly-privatised BT soon set about overhauling its antiquated infrastructure, and it?s unlikely that a state-owned telco would have accomplished this task with such speed or diligence.
The fact is that BT owns and operates by far the largest data network in the UK. No matter how much the Government taxes it, BT will continue to have cash pouring out of its ears simply because of the market share its infrastructure represents. No anti-monopoly measures can get round this. So perhaps a more effective approach to clipping BT?s wings would be to find ways to appropriate sections of BT?s network or the services it runs across it. This could take the form of a return to public ownership of, say, BT?s ISDN services (after all, BT has never seemed particularly keen on having them), or causing BT to spin off some of its business divisions into fully divested subsidiaries.
Meanwhile, BT has been getting more flak over its ISDN service. This is a long-running saga to which Hollywood would do well to acquire the screen rights. The company has been under almost constant fire since launching its digital networks for the masses in 1991. At the time, it was criticised for not having launched sooner. Before long, BT was being lambasted for the slow speed at which it was rolling out the service. Although the company tried to explain that upgrading the UK?s national networks was not an overnight job, its critics were unrelenting. Even when most of the new digital network was in place, BT faced renewed attacks from the third-party solutions providers. Their warehouses were bulging and they were ready to ship. The ISDN market was being stymied by BT?s high installation charges, they moaned.
BT was unrepentant. Next, it rethought its ISDN services portfolio ? and stood accused of merely confusing the issue by hiding the installation costs in other charges. There seemed to be no way it could convince a cynical market that it was genuinely committed to encouraging widescale ISDN take-up in the UK.
Last Spring the plot took a new turn, when Network News revealed that large numbers of ISDN users were experiencing strange line failures. As the story unfolded over several weeks, more readers came forward to confirm that they, too, had experienced these phenomena. But BT maintained a wall of silence over the matter. In July 1996, it finally issued a statement to the effect that it had investigated the problem and had found no cause for concern. Typically, at a meeting some months later, senior BT management said they attributed the story (with some irony) to a ?communications failure? in their relationship with Network News.
The last fortnight has seen renewed ISDN headaches for BT, with reports that it plans to charge users who run ?stealth polling? tests; this was followed by an angry reaction from ISDN users, who pointed out that any attempt by BT to add to ?already high? ISDN charges would be met with stiff resistance.
Where is Oftel in all this? It almost certainly faces re-organisation under the Labour government, which has discussed combining the Independent Television Commission (ITC) and Oftel in a new Office of Communications (Ofcom). This would reflect the convergence of TV and telecommunications. Don Cruickshank?s chances of remaining as Oftel director have been questioned ? he may be seen as a Tory appointee, though he is officially deemed independent. Little wonder that ?the Don? has been rethinking his position in the light of a change of administration at Westminster.
Jim Hayes is editor of Network News; you can email him at [email protected]
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