Select Committee on European Union Minutes of Evidence

Further supplementary memorandum by Reuters Ltd (text taken from e-mail of Ben Wilson (Public Affairs Assistant) of 6 July)


I have today received the attached documents from Tarifica and have pasted in below the covering message I received from my contact there.

  Please note this is Tarifica data and should therefore not be seen as Reuters evidence. Nevertheless his conclusions would seem to back up the comments Phil Sayer made in his oral comments to the Committee (paragraph 856), ie that BT Surftime pricing will be broadly comparable, although it is evidently somewhat difficult to draw meaningful conclusions when only Germany is offering a similar product.

  However, I would seek to re-emphasise that Surftime will not provide the consumer or businesses with faster Internet access, which is a far more important driver for e-commerce. That will come partly with the roll out of ADSL and local loop unbundling; our concerns on the slow BT/Oftel progress in this area have been put to you several times previously. I note that Spain is the latest EU country to announce that it will meet the European Commission's target for local loop unbundling by the end of this year. The UK will be among the very last of all EU countries—not just the major ones—to unbundled the local loop and it will certainly fail to meet the Commission deadline. Furthermore, we note that BT has delayed the rollout of its ADSL service Openworld—we believe the current launch date is September 2000.

  I'm afraid of the countries surveyed on two incumbent operators, BT and Deutsche Telekom, actually have flat rate Internet schemes. I've included a Word file with some background with details of what other operators are providing in the future or offering as a substitute to flat-rate (generally bundled minutes). My opinion is that flat rate Internet pricing will be commonplace within the next 12-18 months in Europe, much as subscription-free services became the norm in the second half of 1999.

  Comparing BT surftime with T-Online's flat rate does seem to show that BT is competitive, there's just the case of having to ensure your ISP is signed up to it.

  However, as with the "free" model of ISP access, it tends to be the new kids on the block who come up with the latest offer and the incumbents that follow on. This is clearly the case since the Alta Vista announcement earlier this year despite BT saying that SurfTime was on the way already.

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