Broadband provision in the UK

If you want broadband in the UK you have two main choices:

• ADSL,
• cable.

There are some other minor players using satellite or wireless, but in reality you are most likely to end up with one of these two.

The ADSL market is almost entirely built on the back of an existing last mile network owned by BT. The wide variety of companies selling ADSL contract with BT to gain access to this last mile, though they do so buy paying BT to backhaul IP (or in some cases ATM) to them. The interconnect with BT is done in various places throughout the UK - the companies don’t touch the local loop that provides the last mile of the connectivity.

Cable provision is though a very small number of players, as the market has seen significant consolidation over the last few years. Telewest and NTL are the two main players and you have little or no choice over which you can use - it depends on which company owns the cable that is laid in your street.

Given that BT provides only a limited set of core service options that are applicable to most customers (between 512Kb/s and 2Mb/s downstream), the various ADSL companies generally compete on price for a commodity product. There’s relatively little significant differentiation.

The cable companies offer even less choice. They have different bandwidth services, but offer only dynamic single-IP services. There doesn’t seem to be any interest in significantly improving on the BT offered bandwidth (an order of magnitude improvement would be nice) and given a track record of poor service, and poor service features, this doesn’t look like offering a compelling competitor to ADSL any time soon.

The ADSL market shows a glimmer of opportunity through Local Loop Unbundling (LLU), where BT grants access to local exchanges for alternative service suppliers. As Steve points out though, a single company moving into lots of exchanges is prohibitively expensive, so they all tend to try and cherry pick. Getting a concerted effort underway to compete with BT requires the companies to cooperate in ensuring that they have viable alternative service coverage and improved service facilities.

Some things could be done quickly - Easynet are offering 8Mb/s ADSL services by taking advantage of LLU. Will they be able to build a viable alternative to the incumbent BT? In the short term this will probably depend on whether they can gain reseller ISPs who build customer-ready products. In essence Easynet needs to be seen as a cost effective, reliable provider of services that ISPs like AAISP can rely on. The reality is that it will take more than just Easynet to make this move

• OpenLLU needs serious consideration from the other players.