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By Martin Brampton, 17 October 2006 16:45

COMMENT

What can we expect from BT's next-generation network? New IP services for cheap? Not so fast, says Martin Brampton. It may well fail to deliver, as BT repeats past mistakes.

The BT programme to roll out a national IP network is moving towards fruition. A pilot scheme begins in Cardiff at the end of this year and national implementation is planned to start in January 2008. It's a big project but do we have cause to be excited by it?

Sadly the background is discouraging. The history of British Telecom (latterly BT) is an illustration of the discontents of contemporary society. As a government body, once part of the old General Post Office, our telephone system built a justified reputation for engineering excellence. Its weakness was an arrogant disregard for ordinary telephone users.

Before digital systems could be deployed, there was much agonising about how to achieve the reliability level of electro-mechanical systems. But System X exchanges started to take the network digital as long ago as 1980, although it took until 1998 to phase out the last analogue exchange. The System X implementation gave the UK one of the most advanced communications networks in the world.

Digitising the UK network was a fine achievement but aspects of it leave concerns that are still relevant. Some years after the changeover began, BT started to offer ISDN. Essentially ISDN gave the user direct access to the digital core and some of the management facilities of the new network. This could have opened up a huge market for more sophisticated devices. Sadly unlike Deutsche Telekom, BT pitched the price at a premium level and offered weak sales support for the service. Consequently uptake was very limited, in contrast with Germany.

So instead of moving the UK rapidly towards end-to-end digitisation, BT left us with a largely analogue system beyond the exchanges that is only slowly giving way to ADSL. Will the much vaunted 21st Century Network (21CN) follow a similar path, with exciting opportunities held back by premium pricing and piecemeal sales offerings?

The talk from BT is discouraging. There is far more talk of services being "rich", "seamless", "integrated" and other meaningless marketing terms than of anything concrete. When specific advantages are mentioned, they are fraught with difficulties. For example, shared directories is a fine idea but presently this is an area dogged by proprietary systems and limited adherence to standards such as vCard.

Yet more alarming, 21CN is supposed to assist BT's business customers in their aim of providing "excellent customer service". So here we are, back to the Achilles heel of the old BT: customer service. Now BT is preaching as if it had not promoted and connived at defrauding the public over the increasingly detested non-geographic numbers 0845, 0870, etc.

The fact is that customer service levels are now plumbing the depths. As fast as companies spout sanctimonious bromides about service levels, the reality gets worse. Badly treated consumers spend tens of minutes waiting on high priced telephone calls, only to be fobbed off by service centre staff unable to deal with problems. Newspaper consumer columns are being inundated with mail about such incidents. Corporate profits are boosted by cuts in service levels.

Quite apart from the general customer service issue, which afflicts telecommunications companies as much as any, there is the question of how our society should operate something like a core telephone network. As things stand, it is run by a private business, surrounded by an immensely complex system of regulation. One symptom of this is the many complex pricing schemes, which, despite the appearance of choice, frequently add up to much the same whatever is chosen.

It seems that we have no adequate solution to running systems that are natural monopolies. Even were 'nationalisation' or 'public ownership' not such tainted expressions, one can have no faith in contemporary governments managing critical services. The determination of successive ministers to ape the private sector means that the crisis of customer service afflicts government bodies just as badly.

If BT were still in public ownership, no doubt it would have been turned into an 'agency' or some such. These are bodies that are entirely owned by government but are not deemed to be an integral part of the public sector. Ministers are therefore not responsible for their failures. Neither is anyone else, since their management is not accountable to anyone except perhaps as scapegoats.

BT's motivations are now clouded. While its public talk about 21CN makes much of the public interest being served by investment in a new backbone, BT is equally adamant that as a private business it must make decisions on financial considerations. So if 21CN is in the public interest, this is a fortunate coincidence rather than a matter of decision. Moreover, the financial viability of the project depends critically on a barely accountable branch of government - the regulator.

Further confusion comes from BT's mixed role as core network provider and seller of services to homes and businesses. This puts it into direct competition with its own wholesale customers, several of whom have voiced concerns over how 21CN will work out for the distorted and heavily regulated wholesale market.

We seem to have painted ourselves into a corner. Private companies cannot be allowed to run monopolies without regulation. Governments appear to lack the competence or the courage to make major financial decisions in the public interest, even though one might have thought that one of their core functions.

It ought to be a relatively simple matter to decide on appropriate technology for a core telecommunications network. It ought to be a relatively simple question of capital allocation to determine whether the cost was justified. This is so, even if government money were used, since it should not be forgotten that government spending is not mere overhead but can often give future returns. It ought to be a matter of engineering and project skills to deploy a new system.

If politicians are incapable of taking responsibility for these issues, perhaps it is time to establish some new kind of hybrid entity. It would have to be a part of government in its ability to raise money on the best possible terms. But, unlike existing agencies, it would need to be directly accountable to the electorate. Sadly contemporary politicians seem unlikely either to mend their weaknesses or to step aside to allow an alternative. Consequently we should avoid being too optimistic about what we can expect from BT.