ADSL Factsheet. Current progress an update of the major advances over the past month and upcoming developments.
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1 November 2001 ADSL Factsheet This fact sheet provides a history of the rollout of Digital Subscriber Line (DSL) products and gives an update on current progress and upcoming developments. Contents Current progress an update of the major advances over the past month and upcoming developments. Annex A History of ADSL Annex B Products Annex C Technology Annex D Investigations Progress update - October 2001 This update focuses on progress made in the last month and is not intended as a complete overview of ADSL roll-out. References to operators (OLOs) are to companies, other than BT or Kingston, which operate telecommunications systems. Service Providers (SPs) are companies that provide telecommunications services to third parties, eg consumers. The Annexes attached to this fact sheet give further information on DSL and are arranged according to subject area. Roll-out: BT: Date No of exchanges enabled to deliver ADSL End-July % End-September % End-March % End-September ,000 60% Percentage of UK households covered by exchanges Kingston: All of Kingston s exchanges in the Hull area are now enabled to deliver ADSL. Take up (as at end of October): BT: ~100,000 Kingston: ~10,000 New Products: BT introduced three new wholesale products during October. All three differ from existing products in that they make use of new wires-only technology by means of a G.DMT interface that enables the service provider to provide and manage customer equipment, such as ADSL modems.
2 DataStream Home & DataStream Office: enable other operators or service providers to develop IP-based networks for residential or business customers. DataStream Home makes use of rate adaption, which increases the range of the product. VideoStream Plus: enables other operators and service providers to provide consumers with video-on-demand services. Kingston Communications also introduced its own wholesale ADSL product during October. This enables service providers to provide IP services over Kingston s broadband Internet network. The product has a maximum end user upstream speed of 256kbit/s and a downstream speed of 512kbit/s. Special Offers: VideoStream & VideoStream Plus: connection charge reduced to 50 (ex VAT) until 31 March DataStream Home: connection charge reduced to 75 (ex VAT) until 31 December IPStream 500: connection charge reduced to 75 (ex VAT) until 31 December Upcoming Developments From December 2001, BT will begin a trial of a number of self-install variants of its IPStream products. IPStream Home and Office will remove the need for an engineering visit to a customer s premises, thereby reducing the costs to both BT and the customer. The trial is due to last until mid-january 2002 and full launch of the products is expected shortly thereafter.
3 Annex A - History BT took a commercial decision to roll out ADSL products. Oftel has been involved in monitoring rollout to ensure that BT complies with its legal obligations under the Competition Act 1998 and the terms of its Licence. BT must not, for example, unduly prefer its own SP business. Kingston took a similar decision at the start of October to roll out ADSL products. All of Kingston s exchanges in the Hull area are enabled to deliver ADSL and Oftel will ensure that Kingston complies with its legal obligations under the Competition Act 1998 and the terms of its Licence when offering ADSL products. Annex B - Products 1. BT Wholesale Products Product and launch date VideoStream (26/5/00) VideoStream Plus (9/10/01) DataStream S 500, 1000, 2000 (29/9/00) DataStream Home (9/10/01) DataStream Office (9/10/01) IPStream S 500, 1000, 2000 (26/5/00) Product Description Enables operators/sps to provide consumers with video and TV on demand services Enables operators/sps to provide consumers with video and TV on demand services Enables other operators or SPs to develop IP based networks for businesses eg. corporate intranets Enables other SPs to develop IP based networks for residential customers or those who work from home Enables other operators or SPs to develop IP based networks for businesses eg. corporate intranets Enables other operators and SPs to provide highspeed Internet access mainly to SMEs Prices (ex VAT) 625 connection charge. (Reduced to 50 from 1 October 2001 to 31 March 2002) 720pa rental per End User (EU) 150 connection charge. (Reduced to 50 from 9 October 2001 to 31 March 2002) 280pa rental per EU 100 connection charge pa rental per EU (depending on speed) 100 connection charge (Reduced to 75 from 9 October to 31 December 2001) 280pa rental per EU 100 connection charge 280pa rental per EU, regardless of speed 260 connection charge 780-1,260pa rental per EU (depending on speed)
4 IPStream 500 (29/8/00) Total end users (late- October) Entry-level version of IPStream series. Aimed at residential customers. 150 connection charge (Reduced to 75 from 1 October to 31 December 2001) 360pa rental per EU ~100, Kingston Wholesale Products Product and Product Description launch date Wholesale ADSL service aimed at product residential customers. (4/10/00) Total end users (mid- October) Prices (ex VAT) 60 installation charge 40pm rental per EU ~ 10,000 There are currently around 200 customers taking these products from BT and Kingston. These include local authorities and large firms who are using the products as part of their internal networks as well as service providers and other operators who are using the products to offer services to residential and business customers. There are approximately 40 service providers offering services to residential customers and 70 offering services to business customers. Annex C - Technology ADSL: Asymmetric Digital Subscriber Line (ADSL) technology transforms a normal telephone line into a high-speed digital line that enables access to telephony services and the Internet at the same time. ADSL provides always-on, alwaysavailable access to the Internet at speeds that are 10 to 40 times faster than a standard 56k modem. Rate Adaption: ADSL is normally only available to those living within 3.5km of an ADSL-enabled local exchange, but this can be extended to 5.5km for rate adaptive variants of the products. Rate-adaption is achieved through relaxing the line qualification limits, enabling the upstream path (away from the End User) to rate adapt to between 64kbit/s and 250kbit/s depending on distance from the exchange and traffic levels. The downstream speed (into the End User) remains the same at up to 500kbit/s, providing continued high speed Internet downloads. Wires-only (G.DMT): G.DMT services are wires-only variants of wholesale DSL products. BT will continue to provide the network elements, ie the wires, with the service provider
5 supplying the end-user equipment, such as the modem. This is one step towards an off-the-shelf modem/cpe product. Self-install: Self-install products are the step beyond G.DMT. They will enable end-users to purchase CPE off-the-shelf and install it themselves, eliminating the need for engineer installations. Annex D - Investigations BT s ADSL roll-out was a commercial decision. However, since BT announced its roll-out plans, Oftel has been involved in monitoring roll-out to ensure that BT complies with its legal obligations under its Licence and the Competition Act This monitoring process involves having weekly working level meetings and monthly high-level meetings with BT. Kingston has only recently introduced retail and wholesale ADSL products. Oftel is currently assessing these products and their terms & conditions to ensure that they comply with Kingston s Licence obligations and the Competition Act Oftel has also conducted a number of investigations into allegations of anticompetitive behaviour. Some investigations were the result of industry complaints, others have been initiated by Oftel itself. More detailed descriptions of most of these cases can be found in Oftel s Competition Bulletin, which is published on a quarterly basis. Click on the case title to view the respective Competition Bulletin entry. (Please note, not all cases will have been published in the Bulletin yet). Current cases: 1. Wholesale DSL Terms and Conditions & Service Level Agreements We are continuing to examine an industry complaint regarding BT s contract terms for its wholesale DSL products. The xdsl industry group argues that the terms (including the lack of Service Level Agreements (SLAs)) are so unreasonable as to represent an abuse of a dominant position given that BT is currently the only supplier of wholesale ADSL products. Following consultation with industry, BT has recently introduced a new version of its terms and conditions, including SLAs, which came into effect as of 1 September. We are considering the impact of these new terms and conditions as part of our inquiry. We have also used our powers to request information from SPs and OLOs to determine whether there has been a material effect on competition. Contact: Steve Burniston (5361) 2. Alleged Margin Squeeze Last year, we investigated allegations that BT was cross-subsidising its service provider, BTOpenworld. In January 2001, we decided that BTOpenworld's original business case was not implausible and therefore, that there was no evidence of a cross-subsidy. We decided, however, to monitor and review the situation after six months to see whether anticipated revenues from e-commerce and advertising were realised. This review is now under way. Contact: Naaz Rashid (8849)
6 3. ADSL Interconnection Energis and Thus referred its dispute with BT concerning an ATM-level interconnection product to us for determination. We have been asked to undertake a market review, and to determine the prices and terms and conditions for the product, including service level agreements/guarantees. Contact: Sam Parr (5360), Sara Elgstrand (8976) 4. DataStream Pricing We have also opened an own-initiative investigation into whether BT s recently announced prices for DataStream Home and Office are too low. The concern is that the prices might be designed to reduce or eliminate competition from LLU operators. We are currently considering information requested from BT. Contact: Sam Parr (5360) 5. Rate Adaption Oftel has opened an own-initiative investigation into BT s new rate adaption technology, which extends the reach of ADSL from approximately 3.5km from an enabled exchange to approx 5.5km. BT has introduced rate-adaption on its IPStream 500 wholesale product, but not on any others; in particular, it has not introduced it on the products that are designed to be more suitable for supplying services to businesses. After we started our investigation, BT told us that it had developed a timetable for the introduction of rate-adaption on its business products, but we are continuing to investigate this matter on the basis that BT s plans might have favoured its own SP business, BTOpenworld. Contact: Sam Parr (5360) 6. BT's wholesale prices Oftel has recently started investigating allegations that special offers on BT's wholesale products are anti-competitive, following the receipt of a complaint. Contact: Naaz Rashid (8849) 7. Special offer investigation Oftel has received a complaint concerning BTOpenworld s special offer of half price installation on all orders for its Business 500 and Business 500 Plus (multi-user) products, running from 18 September to 31 December The concern raised is that BTOpenworld is able to offer reduced installation fees for Business 500 Plus, without a corresponding reduction in the installation charges for its wholesale derivative, IPStream S500. Contact: Lawrence Knight (8747) Closed cases: 8. Alleged passing of confidential information to BT Openworld 9. BT ADSL installations - closure details available in the next Competition Bulletin 10. BT Openworld marketing
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