MEMORANDUM SUBMITTED BY THUS PLC
We appreciate the interest shown by the Committee
in the impact of local loop unbundling on UK consumers. Local
loop unbundling will bring about significant changes to the telecommunications
market in the UK and it is important for consumers that we achieve
a successful implementation. We have outlined below a number of
areas that are currently causing some concern both to ourselves
and our customers, that the Committee may wish to consider.
We were pleased to note that when questioning
the Director General of Telecommunications on Tuesday, the members
of the Committee were well briefed and asked a number of highly
pertinent questions. There are, however, a number of aspects of
the unbundling process which the Director General did not mention
and which we believe are highly relevant.
We would therefore wish to make the following
additional observations:
1. The Director General made much of the
fact that he had imposed a new licence condition on BT relating
to unbundling. Although it is true to say that the Director General
agreed the terms of the licence change with BT, it was not brought
into force until Thus and fellow operators specifically asked
the Director General to invoke it. Prior to that point, BT had
failed miserably to engage in meaningful contract discussions
with its competitors.
2. Ms Lambert also explained that BT's much
more rapid roll-out of it's own DSL service has a positive effect
since it is available as a wholesale service to operators. What
was not mentioned at all is that Thus, and our competitors, have
a great many problems with the service and the contractual obligations
BT have imposed, which still remain unsatisfactorily resolved.
BT flatly refused to discuss the contract terms with us. This
led Thus to form an industry group with other operators and Internet
Service Providers to negotiate with BT. As with unbundling, BT's
strategy has been to delay and degrade, effectively operating
a scorched earth policy as it gradually withdraws from its monopoly
over the provision of DSL. These tactics led the industry group
to make a number of formal complaints to Oftel, none of which
have yet been resolved by Oftel.
Specifically these complaints relate to:
— the terms of the ADSL service contract
imposed by BT on all operators;
— pricing of the product and the margin
squeeze effect;
— poorly defined nature of the ADSL
product and the poor performance of the product;
— BT providing information to its own
downstream businesses, for example by providing access to BT marketing
channels and customer databases; and
— BT's pattern of behaviour both in
ADSL wholesale provision and on Local Loop Unbundling.
These issues are now impacting directly on our
customers. Domestic and business customers alike are justifiably
complaining about the poor quality of service and the unduly onerous
contract terms they are being offered by the operators, who in
turn have no option but to pass on the terms imposed unilaterally
by BT with the tacit consent of Oftel.
As the Committee observed on Tuesday, BT has
indeed stolen a march on its competitors by virtue of its monopoly
position in rolling out its own ADSL service. Thus wholeheartedly
supports moves towards a co-regulatory environment but experience
to date shows that co-regulation in the UK means regulation by
Oftel and BT.
5 November 2000
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