BT CEO Slams U.K. Fiber 'Monopoly' Critics

Apr 08, 2013 (07:04 AM EDT)

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The heads of two of Britain's biggest telcos seem to have chosen the medium of the country's national press to snipe at each other's fiber optic ambitions.

Two weeks back, Sir Charles Dunstone, chairman of TalkTalk, told The Financial Times that his company's competitor, BT, is seeking to rebuild in broadband the kind of crushing monopoly that it used to enjoy when it was the national state telephony provider, up until the mid-1980s.

The claim has been dismissed by BT's chief executive Ian Livingston, who told The Daily Telegraph in a story published Monday that complaints about BT's success in fiber are simply sour grapes.

Companies like TalkTalk, he suggested, do not want to see BT succeed because they are "not prepared to invest in fiber themselves."

[ If government services are delivered online, what happens to citizens without Internet access? See British Government's 'Digital By Default' Plans Challenged. ]

Livingston said anti-BT sentiments are being pushed by people who want to live in the technological past, and compared their stance to the Luddites, displaced early industrial era workers who tried to fight the coming of newer technology.

"These criticisms are coming from people I can only describe as copper Luddites," he told the paper, claiming they "don't want to see the U.K. getting fiber."

Livingston also said his rivals are trying to "stop" his firm's fiber program "so they can sweat their own copper assets" and thus "want to hobble the U.K. economy for their own commercial reasons." He also said BT's network is open for use to any provider in the U.K. on the same terms as itself. As there are "50 or 60" of such providers, by definition his firm cannot be accused of running a monopoly, Livingston said.

It is true BT has committed to spend £2.5 billion ($3.3 billion) on connecting two-thirds of British homes and businesses to this technology, which can deliver faster broadband than the copper network. However, it is also true that the company is getting state subsidies in at least some projects, such as its recent announcement to hook up remote parts of Scotland to fiber, largely through subsidy from the government.

It's this kind of deal that's prompting Dunstone's attacks, with the businessman saying that regulation should be toughened to ensure BT doesn't end up with too big of an advantage in next-generation broadband delivery. "There is so much government money going into subsidizing higher broadband speeds, but no one really knows where it is going and how it is being spent," he claimed in his Financial Times interview.

It is also the case that BT remains the only company seriously bidding for contracts for this kind of rural outreach. Therefore, TalkTalk said the U.K. communications watchdog, Ofcom, should be forced to assess the wholesale price BT plans to charge for access to the super-fast broadband network.

Such a move is not very likely, which might oblige BT's competitors to keep using the press as a platform to indicate their unhappiness with its apparently irresistible rise to become the U.K.'s major fiber player, though it does face serious competition, especially in the consumer market, from John Malone's recent Liberty purchase of Virgin Media.

For example, when BT reported fiscal results for the first six months of its current financial year in February, it said its Openreach home broadband brand has 1.25 million homes signed up; Virgin has four million.

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