Getting from Narrowband Nation to Broadband Britain

Unbundling in the UK

In June 2003, Oftel reported that a mere 4,600 telephone lines had been handed over to rival telcos through local-loop unbundling (LLU). Although there was a pre-launch burst of enthusiasm for unbundling with over 40 companies expressing interest at one point, only a couple of operators -- Easynet and Bulldog -- have taken up the challenge. Most DSL providers buy services wholesale from BT. Broadband resellers here include AOL, Zen, Demon, Pipex, Iomart, Easynet, Freeserve and Virgin

According to the European Competitive Telecoms Association, even today only 3 percent of exchanges in the UK have been unbundled. This compares to 55 percent in Sweden, and 60 percent in the US (according to the FCC).

Broadband resellers in the UK:

All this means that however much the Government promotes the readiness of the UK as a hub for e-commerce, the nation has seriously lagged behind world leaders in terms of its network infrastructure. Analysts put the problems down to BT's past unwillingness to upgrade its exchanges and to the focus by cable operators on urban areas.

There has been some recent improvement, but there are still stumbling blocks, some of which border on the farcical (the UK is currently in its third attempt to auction the 26GHz spectrum for fixed wireless broadband, for instance).

But there are many positive signs that the UK is finally heading in the right direction. After an initial £30m was earmarked to stimulate broadband deployment and uptake was widely criticised as being insufficient, the government announced details in July 2003 of Regional Aggregation Bodies. The idea of these is that each RAB will assess how much demand for broadband there is from the public sector in its area. This demand will be bundled together, and telecoms operators will be invited to pitch for the contract to satisfy this demand. Initially, just schools and hospitals will be included, but the government hopes that a wider range of public sector institutions will eventually be involved. The RABs will decide how a £1bn fund, announced in November 2002, will be spent among local health and education institutions.

In Wales meanwhile the Welsh Assembly has earmarked £100m of EU funding to develop broadband in Wales through the Regional Broadband Unit.

Italy
	In Italy, the government has spent money directly to support broadband infrastructure development. Some 500m euros have been provided in the form of tax exemptions, special rate loans and other initiatives.
Sweden
	Sweden's ITiS programme has seen Internet connectivity increased to 78 percent of all available computers compared to 57 percent in 1999. Its Broadband for Rural Areas Programme is an 890m euro project to support rollout of broadband infrastructure in remote areas (through grants, tax relief, local loop unbundling). Local authorities have been given the role to ensure competition neutrality and diversity in the networks and they are responsible for the procurement. Funds are released based on infrastructure plans drafted by the local authorities, after being scrutinized and approved by the county administrative board. Despite its grand aspirations, this programme has so far enjoyed only limited success: Only 5 percent of funds have been paid out, and the enthusiasm of local politicians for promoting broadband has dampened since the end of the Internet boom. The programme has now been extended to 2005.
Canada
	Canada took action over broadband much earlier than most other nations. Beginning in 1998, cable companies were exposed to broadcast competition from telcos and broadband access competition from third party ISPs. Similarly, from late 1997, telcos were exposed to competition from both cable companies and Other Licensed Operators (also know as Competitive Local Exchange Carrier in the US) in the local loop. This prospect of increased competition drove investment by cable companies and telcos ahead of deregulation, in an effort to secure market share as a defensive measure, and to cultivate a new revenue scheme. Canada now has among the lowest business and individual broadband pricing, and among the highest broadband availability in the group. The Connecting Canadians programme has seen roughly 10,000 rural and remote communities gain broadband community access points, and over 5,500 voluntary organisations have been connected to the Internet under the VolNet programme, which offers a basic Internet account for one year, plus 50 percent toward the cost of access devices and training. Every school and public library was connected to the Internet by 1999.
Japan
	The government forced incumbent NTT to open up facilities to competitors through Local Loop Unbundling in August 1999, and followed with a series of regulatory actions: NTT was forced to upgrade exchanges beyond metropolitan areas in 2000 and was forced to offer wholesale DSL in June 2001. One drive of the decision to enforce LLU was intensive lobbying from industry and the fact Japan's regulator showed willingness to act each time the incumbent presented an obstacle to LLU. In the wake of regulatory action, uptake of broadband grew rapidly; NTT eventually revised its strategy and now embraces DSL. Japanese consumers now have among the cheapest DSL services.
Australia
	Australia's Networking the Nation programme saw the extension of the country's universal service obligation in 1997 to include a digital data service obligation, which required the digital service provider to set out plans for how 100 percent of Australians will be served.

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