By Simon Woodhead
We discussed recently what we’d like to see from the Narrowband Review. Less than 24 hours later Ofcom published its Wholesale Voice Markets Review 2021-2026. This is important and going to govern our industry for the next 5 years, and arguably reshape it forever.
Rather than brain-dump all our reactions (there are many) here, or indeed simply share our response, which by nature will be somewhat legalistic, we wanted instead to serialise a few points in plain English.
Our response will obviously feature these, so if they resonate with you and you think they matter, we would encourage you to respond to the consultation. You are very welcome to cite Simwood, this blog, or our formal response if it helps.
If you missed them, see Part 1 – Huawei bad for Internet; Huawei good for Voice over Internet, Part 2 – CP Status – we need a new one! , Part 3 – What the hell is IPX?, Part 4 – BT’s unchecked monopoly in porting, and Part 5 – A prime opportunity to improve porting.
In recent weeks we’ve tried to shine a light on some of the more egregious omissions in the WVMR. There are more, but they’re not so relevant here. But that isn’t to say it is a bad review as it does move us forward. Well, it gives the state-backed (yep, that multi-billion pound Crown guarantee for its pension is still in place) former monopolist a plan to get to where most of us were ten years ago, and shields it from costs whilst it does so. But that does help us all indirectly, and is a far better outcome than we’ve come to expect – in 2014 we were robbed of 86% of income whilst BT were given the ability to increase our costs. For not repeating that we’re genuinely grateful.
Whilst some of us were IP-centric from birth and it has been a very long road to get to the point of the UK PSTN being IP-first, there is light at the end of the tunnel and that is welcome, by us at least. There are those who’d have Ofcom wind the regulatory clock back to 2009 so they can buy a few more cars (and at least their infrastructure would be closer to current). We’re not one of them, so despite its many many wrinkles, overall this is a progressive review and we must keep that in mind as we explore the remaining roadblocks and omissions.
Let us consider it though from three perspectives: the woman in the street; the crook who sees scope to rip off UK citizens; and finally our own industry perspective.
The woman in the street
Will my mobile get cheaper? No, as has been shown by Ofcom’s own data, prices have continued to rise at retail despite margin being re-distributed through charge-controls. This review proposes more of the same. Furthermore, there is zero prospect of any new competition as the oligopoly remains nicely protected by Ofcom’s policy (towards us at least) that you can only enter the mobile space if you can demonstrate subservience to the oligopoly.
Will BT Sport get better? This wasn’t a review of television but we’ve seen in the past how BT Sport’s fortunes could be said to follow BT’s own windfalls. I seem to remember that by apparent coincidence they spent £2bn creating BT Sport the year they were given £2bn to roll out ‘superfast’ broadband. Correlation isn’t causation of course but this review definitely saves BT money by kicking the can of progress 5 years down the road and seeking to avoid it needing to invest in infrastructure. That might be good for sports fans, at least those watching BT Sport. Others might suffer as parent networks continue to invest in yesterday to avoid BT having to invest today.
Can I port my number more easily? Sadly, nothing in here to help you, in fact it’ll likely get worse. The market continues to bifurcate into those who resell BT and have a tendency to make porting impossible (‘IPX Scrotes’ as we call them), and those who lose money on every call ported from and to BT. The latter will likely continue to be worse off as they (including us) have been since 2014, some may just give up and become BT resellers. While there was a publicly funded £700k dalliance with blockchain, we expect this misadventure to run out of money having achieved little.
My nan has a land-line linked to her red safety button, what happens to her? In the first instance her red button will need to be upgraded to work over IP as she won’t have a land-line. This is forced progress in some respects but the red button is one of many many applications depending on that ever-present 48 volts on the line. Of as much concern as her red button would be nan walking to the shops over a level crossing whose emergency pull cords rely on the 48V; calling a taxi to get home from the supermarket using one of the 3,000 phones that also rely on the 48v, or God forbid feeling thirsty as reservoir quality monitoring also relies on that 48v. This risk to nan could all be avoided if Ofcom had suggested the land-line is untouched in presentation to the end-user and BT installs ATAs in the street cabinet, enjoying IP from there, just as LLU operators and AltNets have done for years. This would also have left WLR serviceable and addressed one side of our major concerns with the complete omission of security standards: the ATA could operate out of band to the broadband and enforce encryption standards likely absent with over-the-top services. Sure, all of these services need to migrate to IP but it does seem the push to Gigabit Britain takes into account BT’s budget whilst completely ignoring nans everywhere! Sorry we don’t have better news
Can I resell BT? Others do. Many like to put a BT logo on their website and talk about how big and clever they are to be ‘interconnected with BT’ or, more amusingly, ‘regulated by Ofcom’.
Everyone resells BT anyway, right? BT has a market share of circa 40%, so no, many don’t resell BT (even if they are given the unchecked ability to gouge revenue on approx. 70% of calls), but it might be a good option for you.
How do I interconnect? Oh any old public Internet connection will be fine to tick the box, if you don’t care about anything else. You don’t need to worry about equipment that does encryption and you can send calls over the public Internet. Ofcom haven’t set any standards there and BT don’t even support encryption anyway!
How do I stop customers leaving? You can port numbers in using any of BT’s agreements, but you can’t lose any unless someone has a porting agreement with you. You can do what many other IPX Scrotes do and refuse to, perhaps claiming you will only port on BT’s new system and other people need to get with the programme, or that you’ve delegated that to BT. Ofcom’s position is that you might move your number ranges elsewhere if people can’t port from you and BT has no responsibility. If you host with almost anyone else, they’ll handle your ranges like they do their own so you probably won’t like it.
This is like a dream come true, where’s the catch? For someone of your moral code there probably isn’t one. Those of us who care about end users rather than a fast buck see it somewhat differently.
It makes sense to tackle this by first revisiting our ‘asks’ of the review…
Defining what IPX is to avoid confusion. FAIL. We counselled that Ofcom needed to recognise the different personalities of IPX and treat them appropriately. They haven’t. They still claim that by regulating the Rangeholder, he’ll do the right thing in his choice of network to host on. We call on Ofcom to classify rangeholders hosted elsewhere distinctly from network operators, and to require BT to come into line with the rest of the industry in treating those hosted ranges with the same obligations as their own, rather than providing tools to enable miscreant resellers to hide.
Address BT’s unchecked dominance in transit. FAIL. Ofcom have declined to address BT’s transit business, despite prices rising in the face of falling volumes which is textbook monopolist behaviour. Sure, there are alternatives for some traffic for some operators which is why volumes are falling over BT, but there are not alternatives for all. We repeat our acid test: if there is no monopoly in transit, we should be able to switch off our BT interconnects and traffic will find us over alternative routes as we have bilaterals with every significant transit provider. We estimate 80% of it would fail because we assert BT do not consume this transit, possibly because they enjoy a monopolistic position.
Address BT’s unchecked dominance in porting. FAIL. In the
BT business plan review, Ofcom acknowledged BT’s monopoly as the original rangeholder for a majority of numbers but declined to intervene. In doing so, they are enabling BT to gouge approximately 20x the FTR from approximately 70% of calls, whilst competitive operators lose money on those calls.
Narrowband interconnection. Mostly FAIL. There’s some hope here in that the review enables FTR access to BT ranges with few points of interconnect in 5 years time, whilst BT has enjoyed it the other way for as long as I can remember. In the interim many of us will need to continue to invest in TDM (as we have for the last 10+ years already) as 5 years has been chosen to avoid poor little BT making unnecessary investment. Meanwhile, absolutely nothing has been done to enable Narrowband Access to those hosted on BT, as Ofcom maintains that those resellers will make the right decision and move their ranges elsewhere if a competitor is disadvantaged. Meanwhile, our simple suggestions of a contact register and supervision don’t feature.
Climate change. Partial WIN. We’re pleased to see that Ofcom haven’t bought the position BT has maintained in past reviews that it would migrate to IP but keep TDM on the edge facing other operators; other operators having to artificially keep TDM on their edge to connect to BT. We’re pleased to see this utterly pointless use of technology and energy is off the table. However, imagine all the future children that could be saved by mandating BT have less than a five year runway, at the expense of everyone else, to get their house in order. We’re with Vodafone that the changes slated for 2025 should kick in in 2021. That would focus the mind and doubtless save a polar bear or two.
Overall, if this was the 2014 review, I’d be pretty pleased with its progressive nature. Sadly, whilst it moves the former civil service gangster a little closer to the rest of industry, it gives them five years to get where the rest of us were ten years ago. Them being slow and inefficient would be fine, and good for competition, if competitors and indeed consumers didn’t have to pay for it directly in inflated rates, and indirectly in broken porting. We maintain that most of the industries’ burning issues could be resolved in a stroke but we repeat them here:
- Require a seperate class of PECS with number ranges to distinguish them from PECNs. Mandate PECNs to treat hosted ranges pari-passu with their own for number portability and Narrowband Access. Mandate PECS with ranges to give their host this right. Realistically this only affects BT and IPX Scrotes and would ungum number portability overnight.
- Cap porting conveyance at FTR so those of us who have lost money on every minute of every call to every number ported from and to BT since 2014, do not need to incur a further five years of it. Moreover, insulate us from further loss as BT reorganises its network.
- Require single-number porting regardless of the installation history at BT in the old world.
- Whilst we don’t care about how IPX Scrotes interface with BT, we do care about the security and provenance of UK telecoms as a whole. Please please do not permit an environment that encourages 200bn minutes a year to flow unencrypted over the public Internet or into a single building. Ofcom needs to recognise the distinction between Type A and Type B on BT’s IP platform and require a higher standard from operators than resellers. Of course, BT itself needs to procure the encryption license on its IP platform too, and before it is expected: that is something the rest of the industry should not need to pay for.
- 2025 is too far away for the benefits of IP migration for those of us who have been IP centric since birth. BT is the last to blink (with the possible exception of Virgin!) and it is plain wrong that the rest of the industry should endure inflated and uncontrolled transit and conveyance charges while they do. April 2021 is when all ranges should be accessible over IP at FTR, just as BT enjoys with other operators today.
We hope our commentary has been helpful to you, and would encourage you to respond to the Ofcom consultation whether you agree with our position or not. For all it missed, this is the most significant review in a long time and we’ll be living with the consequences for the next fix years at least. If past experience is anything to go by, we’ll be hoping the 2023 review addresses the issues this causes and likely finding it doesn’t.