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UK Telecoms Need E-Business Shakeup, Says Government

The next big thing on the UK government's e-agenda is a shakeup of the telecoms' infrastructure to drive the pace of competition.

Patricia Hewitt, minister for Ecommerce and Small Business, told business leaders this week that the next area for "domestic concern following the Electronic Communications Bill has to do with telecom infrastructure and the market framework for telecoms." This appears to be an indirect warning aimed towards U.K. telco British Telecom (BT).

At the event hosted by law firm Dibb Lupton Alsop, Hewitt said that one of the government's most important objectives is to "go on driving competition further and faster into the telecoms' market." The U.K. government also "has to look at how we create an effective framework as telecoms, broadcasting and computing converge."

Hewitt praised BT for cutting costs of fixed access through telephony, but stressed the need for more action.

"What we want to see is the cost of Internet access continuing to fall much further and much faster, and a wider range of tariffs becoming available, including the option of a flat-rate subscription and unmetered access for peak-hour Internet access all day, all week," she said.

BT's proposals for a new unmetered access scheme, called Surf Time, were welcomed as a step in the right direction, but the next challenge is for the telco and "Oftel (the British telecommunications authority) to agree a wholesale pricing structure and to agree the interconnection regime which will enable competing operators to provide a range of services and tariff packages for Internet access," said Hewitt.

She ruled out direct government action, saying that it is Oftel's responsibility, but added that regulator David Edmond "shares my view on the strategic and economic importance of these issues, and Oftel is pulling out the stops to ensure that they get an early and thorough agreement on this point."