Memorandum submitted by Colt Telecommunications
This memorandum addresses the following topics:
Virtual mobile networks.
2. LOCAL LOOP
We set out below a summary of some of the key
events in the UK unbundling process:
On 11 November 1999, Oftel announced
that BT should unbundle its local loop by July 2001. Oftel did
not specify the process, products, prices or timeline in any detail
and suggested these be resolved by "commercial negotiation"
between the operators.
From January 2000 the industry started
negotiations in the "Access to Bandwidth Option 2: Operator
Policy Focus Group" (A2B2 OPF). This had sub-groups looking
at products, processes, commercial issues, contracts, trials and
technical issues. Colt participated in all groups (chairing the
contracts group) with other operators and BT. Oftel was not actively
involved at this stage.
The industry discussions resulted
in the production of a set of product descriptions and a process
manual. Each of these is still being discussed between BT and
On 26 July 2000 BT launched its ADSL
service ("Openworld"), with DSL equipment in 516 exchanges.
First orders for co-location space
were scheduled to be placed on 1 September, however this deadline
was not met due to industry and BT disagreement over the process
(colloquially known as the "bow-wave process") to be
prioritise which exchanges should
be built first (as BT had inadequate resources committed to satisfactorily
deal with aggregate industry demand); and
determine how space should be
allocated in the event that more space was demanded than was available.
As the industry was unable to agree
the bow-wave process:
Oftel decided that BT should
start surveying 361 "non-contentious" sites, which means
that BT is currently surveying 361 least popular sites which do
not serve large numbers of consumers (for example none of the
361 sites are in Colt's top 700 on Colt's list of high priority
Often consulted on a determination
which would define the bow-wave process going forward; and
Oftel will be finally settling
the process in mid-November, and the process should begin for
sites needed for commercial roll-out on 1 December 2000.
There is no certainty over the timescales
for BT to prepare and hand-over co-location space to operators:
BT has contractually committed
to deliver sites within nine months of the start of the process
(three months for surveys and six months for build), which would
mean that the first commercially important exchanges will be delivered
in August 2001.
Oftel's view is that the process
should take four months (rather than the nine in the contract)
for BT to deliver sites, which would mean that BT would start
to deliver commercial sites in March 2001. We understand that
BT disagrees with Oftel.
BT has committed only limited resource
to delivering sites. BT have not committed to a delivery rate.
We have asked for more information on their resources, but it
has not been made available.
A complaint was made to Oftel on
28 September that BT had discriminated against other operators,
and asked Oftel to urgently intervene under the Telecommunications
Act and/or Competition Act on an interim basis to prevent further
BT has failed to provide operators
with the same facilities as those for its own downstream business
(Openworld/Ignite) in terms of information, physical co-location
facilities and access to copper loops;
BT has not participated in the
a number of black-listed sites
have BT's own DSL equipment installed;
limited information about exchanges
is made available; and
initial surveys for co-location
sites have been conducted on a different basis to those undertaken
for BT's own business.
The industry was unable to agree
a satisfactory contract. A detailed complaint was made to Oftel
on 28 September. Key points made in the complaint concerned:
co-location: arrangements are
discriminatory, unverifiable, non-binding and therefore unfair;
BT's service contract with individual
operators: there are no firm contractual obligations to provide
the services required of BT; unreasonable penalties are imposed
by BT; BT reserves unreasonable rights of interference with operators;
unreasonable restrictions are
imposed on operators' ability to connect to third party equipment,
on sub-letting and assignment; and BT reserves unreasonable rights
withholding of information: operators
have been refused any information as to the resources being fielded
by BT to support its own DSL business as compared to those proposed
to be made available to service competing operators; and
Oftel is currently considering both
Oftel is now chairing the A2B2 OPF
In Colt's view the current problems with the
process (which are the subject of the complaints being considered
by Oftel) may seriously impact broadband Britain in that consumers
and businesses are being denied services and the UK is being left
behind its major competitors such as the US and Germany.
3. LEASED LINES
Colt fully supports Oftel's recent proposals
to control the prices for local ends of leased lines. There is
little competition outside urban areas for the provision of "local
tails" and as a result the charges currently paid by customers
are too high.
4. MOBILE VIRTUAL
Colt was disappointed that Oftel has concluded
that there is currently no reason to intervene in the mobile market
to enable non-mobile operators to launch further network services
as virtual network operators.
In our view such proposals would lead to greater
choice and innovation for customers. We will continue to participate
in ongoing reviews of the situation.
5. ABOUT COLT
Colt Telecommunications in the UK is a wholly
owned subsidiary of Colt Telecom Group. As of 30 June 2000 Colt's
Synchronous Digital Hierarchy fibre optic network in London consisted
of 270 kilometres covering the major business concentrations in
the City of London, the West End, the Docklands, Westminster and
stretching out to Hammersmith, Camden and Park Royal. Colt is
currently building an inter-city network between London, Birmingham,
Leeds, Manchester, Bristol and other UK cities. As of 30 June
2000 Colt's network provided switched and non-switched services
in 1,433 buildings.
6. ABOUT COLT
Colt Telecom Group plc is a leading provider
of high bandwidth data, Internet and voice services to business
and governmental customers in Europe. It currently has operations
in 25 European cities in 10 countries and plans to be providing
service in 30-32 cities by the end of 2001. Colt also has 10 Internet
Solutions Centres in service with plans to develop between 20
and 24 in total. During the year ended December 1999 Colt's turnover
was £401.6 million and it carried 7.8 billion switched minutes
of traffic. At 30 June 2000 Colt had installed 2,369 route kilometres
of fibre-optic cables in its city-networks; provided 5.3 million
private wire voice grade equivalents and had 4,754 buildings connected
to its networks. Colt Telecom Group plc is listed on the London
Stock Exchange (CTM.L) and Nasdaq (Colt).
3 November 2000