Committee Reports > List of Committees > Joint > 2007 > Committee on Communications, Marine and Natural Resources > Report No. 09 - Review of progress on broadband rollout

Appendix G

Questions posed to BT Ireland and replies received

Question posed by the Joint Committee to BT Ireland in regard to

Strategy on Local Loop Unbundling (LLU):

Q1.What are the BT Ireland’s plans for offering consumer broadband through unbundled exchanges?

Q2.What is the BT Ireland progress, so far, in selling LLU products to domestic consumers in exchanges that have now been unbundled?

c)For over 6, but less than 12 months

d)For 12 months or more?

Q3How many of the exchanges in Ireland, whether unbundled or not, are of sufficient scale to be considered by BT Ireland as a viable business proposal?

Q4In regard to question 3 above will BT Ireland supply a list of these exchanges?

Strategy on wireless broadband:

Q5.What are the BT Ireland’s plans, if any, to offer wireless solutions to Irish consumers?

Strategy on Wholesale Line Rental (WLR):

Q6.Is BT Ireland satisfied with the current regulatory regime relating to wholesale line rental??

Q7.What reforms, if any, would be of importance in assisting BT Ireland in boosting consumer take up of WLR products?

Demand:

Q8.Having considered the current debate about demand and demand stimulation what 2 or 3 initiatives does BT Ireland believe would be of greatest importance in triggering increased demand by consumers?

Infrastructure:

Q9.From the BT Ireland experience of rolling out broadband in Ireland does BT Ireland believe that adequate infrastructure exists in terms of exchanges and copper in the ground for Ireland to achieve broadly available high speeds through DSL?

Reply of BT Ireland

Q1.What are BT Ireland’s plans for offering consumer broadband through unbundled services?

With the publication of the recent ComReg “road map” (see attached document) BT Ireland now has sufficient confidence to enable consumer broadband products to be brought to market progressively over the coming months.

However, considerable risks and uncertainties exist as to how and when sufficiently robust wholesale product will be made available to us from eircom. Specifically, we have a number of concerns about some of the key issues set out in ComReg’s roadmap:

•Migrations - the ability to offer customers the option to move between services and providers without artificial barriers, No timescales are available as to when this may be provided.

•Number portability - although work has started on an interim manual solution, eircom has yet to start work on an automated, fit-for-purpose system which would facilitate the processing of mass market volumes.

•The industry continues to experience provision and performance issues with eircom which do not meet BT’s or our customer’s requirements.

BT is ready, willing and able to invest, specifically in the creation and provision of a robust broadband market. However, the issues set out above, and in more detail in the road map, are having a negative impact on BT’s investment plans for broadband in Ireland as we do not yet have sufficient confidence in LLU. We sincerely hope that the road map will lead to a new period of excellent LLU wholesale service, including product features and the entire service “wrap” which will instil confidence across the industry. At this stage the jury is out and in that regard the work of this committee is much appreciated.

Q2.What is the BT Ireland progress, so far, in selling LLU products to domestic consumers in exchanges that have been unbundled:

a)for over 6 but less than 12 months?

b)for 12 months or more?

BT has made a significant investment in LLU, installing equipment in some 40 eircom exchanges with more being rolled out. However, due to the restrictions, as outlined above, BT has not been able to develop a viable fit for purpose ‘mass market’ LLU solution for its customers. BT therefore only supplies the service to business customers on a very limited basis. The publication of the ComReg road map has raised BT’s confidence to use LLU for its domestic customers.

Q3.How many of the exchanges, unbundled or not, are of sufficient scale to be considered by BT Ireland as a viable business proposal?

BT believes that the State has a role to play in achieving a target of 100% rollout of broadband (including LLU) in Ireland.

With the current level of charges, both start up and ongoing, and the range of difficulties encountered in its supply, no exchange in Ireland presents a viable business case at present.

We believe that a significant number of exchanges have the potential to be attractive, viable business propositions subject to the provision of a totally fit for purpose LLU product (including all service aspects), and with a significantly reduced price. If the above conditions are right, BT believes 150 exchanges have the potential to be a viable business propositions.

150 exchanges represent 80% of the population, and we would recommend further discussions with Government as to how the remaining 20% of population could be addressed. BT has already given this some detailed consideration, and coupled with our experience in Northern Ireland we would welcome further discussion with Government and other parties as to how this might be addressed.

Q4.In regard to question 3 above will BT Ireland supply a list of these exchanges?

BT will supply a list of the 40 and 150 exchanges. Because of commercial confidentiality we will do this under separate cover.

Strategy on wireless broadband

Q5.What are BT Ireland’s plans, if any, to offer wireless solutions to customers.

BT believes that wireless has a part to play in the provision of broadband services to both consumers and business customers. We continue to test and trial wireless technologies on an ongoing basis, and we will seek to exploit these technologies as required. However, the economics are difficult and our preference is always to use existing capability; the ubiquitous copper loop.

Strategy on Wholesale Line Rental (WLR)

Q6.Is BT Ireland satisfied with the current regulatory regime relating to wholesale line rental?

BT Ireland believes that the successful development of the broadband market requires continuous regulatory involvement and intervention. We would always encourage and support ComReg in its endeavours in this regard.

A strong Regulator with enhanced powers is the key prerequisite in successfully driving WLR and we welcome the recent announcement that ComReg will shortly be granted co-competition powers.

ComReg has a critical role to play in three specific areas underpinning the creation of a vibrant WLR market: (1) its ability to intervene to resolve issues, (2) its ability to ensure prices are properly set to drive commercially viable propositions, and (3) its ability to facilitate a WLR service that delivers a great customer experience.

Q7.What reforms, if any, would be of assistance in assisting BT Ireland in boosting consumer take up of WLR products.

We would emphasise a focus on the wholesale product, specifically in the provision of an extremely high quality service that enables other operators to build and offer services to customers of a quality that they rightly expect.

ComReg should continually assess and monitor the market to ensure BT and other operators can operate in a strong, competitive market bringing innovative commercial propositions to customers.

Demand

Q8.Having considered the current debate and demand stimulation what 2 or 3 initiatives does BT Ireland believe would be of greatest importance in triggering increased demand by consumers.

1.Stronger regulatory powers for ComReg to enable it to properly open the market to full competition. BT fully supports the current plans for giving ComReg co-competition powers. Full and effective competition will encourage investment to implement sustainable broadband access platforms and stimulate innovative, attractive pricing and service bundles for the consumer.

2.A fully competitive market will see a transformation in the level of innovation. Innovation will stimulate society and create a “virtuous circle” where broadband becomes a simple normal every day expectation of all consumers. Young, old, any location.

Infrastructure

Q9.From the BT Ireland experience of rolling out broadband in Ireland does BT Ireland believe that adequate infrastructure exists in terms of exchanges and copper in the ground for Ireland to achieve broadly available high speeds through DSL?

BT considers that there is extensive potential in Ireland to further exploit DSL on the existing copper access platform. Indeed, where BT has already rolled out its network the quality of the eircom copper has not been the major issue.

With regards to exchanges, BT is aware that there are local provisioning problems with eircom deploying new power plant for LLU providers. However, this is a process issue and is no reflection of a poor network or equipment.

BT is more concerned at eircom’s service “experience” rather than their network.

Notwithstanding the above, small difficult pockets of consumers will always exist. For example very long lines in rural areas are difficult to serve. However, technology advancements continuously push the frontiers of reach and platforms such as satellite which can fill final small gaps. BT has significant experience in the provision of 100% broadband in Northern Ireland.