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BT Chairman Hits Back at Critics

Sir Iain Vallance, chairman of BT, Tuesday hit back at critics of the telco's stance on Internet pricing and the introduction of broadband technology.

It was time to face economic and commercial realities, he told delegates at the Telecommunications Managers Association conference in Brighton.

Sir Iain's comments were made just as the Office of Telecommunications was announcing that BT would be required to make its local telecoms lines available to competing operators, thus enabling other companies to introduce high-speed, unmetered services directly into the home.

BT has come under fire from members of parliament, industry, the press and the Internet-using public for holding up the introduction of high-speed services and not offering unmetered access. Sir Iain insists that BT is right and, in a hard-hitting and persuasive speech, that everyone else is wrong.

"Everyone, no matter how inexperienced, claims to know better than BT," said Sir Iain, first addressing the broadband issue.

"BT has been a pioneer in ADSL from the start. Much of the technology was invented by BT, we chaired and led the ADSL forum, we lined up the manufacturers and drove common world-wide standards."

However, Sir Iain insisted that the planning and timing of the introduction of high-speed services via ADSL was vital to the success of the project. He compared those who want to adopt the technology quickly as being like "over-exuberant children" who need to be stopped from "dashing across the road at will."

The prospects for broadband now look more promising than they did a few years back, said Sir Iain. As a result, BT is currently equipping 400 exchanges which will provide coverage for about six million homes in the UK by spring next year.

As for Internet pricing: Sir Iain said that BT's new BT Together scheme divided Internet call revenues with 84 per cent going to the terminating operator and the ISP, 15 per cent in Value Added Tax to the Chancellor and only 1 per cent to BT. Yet the only bill the customers see, he noted, is the total bill from BT.

"In effect, the regulatory rules for calls to the Internet promote BT into the role of tax collector on behalf of the other interested parties. We gather the money. We hand it on. And we take the flak."

Sir Iain warned that if and when the regulations are changed, many of the so-called "free access" ISPs who derive revenue by stealth from BT will have to change their own business models in order to survive. In any case, he noted, the widespread introduction of ADSL would have very much the same impact.