Wednesday, December 05, 2007

Playing Monopoly

It's emerging that the breaks have been put on BT's rollout of their C21 fibre network. Some serious backtracking has been reported.

So, the company that insisted on flogging ISDN long past its sell-by-date has done its sums and found that it is much better off squeezing more revenue from its existing network.

The lack of investment in core utilities in the UK since the privatisation of most of these industries under the Thatcher government is really beginning to bite and is leaving an untenable legacy.

At least in the US there is genuine competition in the telco and TV market, and this is driving investment.

In the UK BT still have a virtual monopoly despite the introduction of LLU (local loop unbundling), which only makes commercial sense in highly built up areas.

But, as I've often done in this blog, you really have to question what the purpose of ever faster links are. Email comes and goes at the speed of the server. MP3 downloads may be marginally faster, but there are constraints in the network that make downloading at more than 1Mbps uncommon.

That leaves video. The quality of a good 2Mbps stream over IP can be as good as the average signal received on Sky or Virgin (especially if pre-encoded).

The only real reason to have ever higher bandwidth is the provision of multiple HD screens in the home.

So, my conclusion is that there is a direct link in the low takeup of BT's IPTV service, BT Vision, and their reluctance to invest in the UK's IP backbone.

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