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ISP War in the UK
Darren.Moffat writes "Seems like round 2 of the ISP war is about to start in the UK,
The full story is online. " Quick Summary: For our readers who've never had to deal with metered calling, there's a running charge for /all/ calls, not just long distance (stupid, I know). But it appears that the two biggest British ISPs are now working with the phone companies to lower those rates. This could be a big breakthrough in the amount of time that Brits spend online.
If you use BT and register your ISP (local call) phone number as a so-called best friend number you'll be entitled to 20% discount to all calls made on this number.
;)
Yes, but tell me you didn't feel slightly sad ringing BT up and asking them to register your ISP as your best friend.
Do you have to mock someone because of their personal wealth?
Nope, I don't have to. Doesn't stop me enjoying it occasionally. Get a grip why don't you?
However, I shall amplify my point for the slow of thinking.
If call charges were dropped then there would be more people online more of the time, which would mean that ISPs would need to buy lots more modems and phone lines. On top of that, more people online for more time would necessarily use more bandwidth, and bandwidth costs to ISPs are outrageous (Charlie is right when he reckons that a 64Kbps line in the UK costs about the same as a T1 in the US) mainly because of the astronomical cost of laying transatlantic cables. All these costs would have to be borne by the ISPs.
Back when I was still involved in the ISP we set up we realised that, if unmetered calls did come in, we would almost certainly be obliged to either jack up our subscription charges, introduce some form of metering of our own, or impose strict call time limits. Or go under.
All paste something I wrote about this situation a while ago, based mostly around my experiences here in Sweden. If I'm factually wrong about something here, I would like to be corrected.
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OK, onto the a couple of days delayed summary of the entire telecom situation. I'm probably not the most knowledgeable person about this, you will find. In fact, it has been very difficult for me to try to get most of this stuff straight myself (and some of it might still be, em, bent). However, it seems a lot of people absolutely no clue about this, so maybe I can bring some light to it for them. Observe that this deals mostly with Sweden (for obvious reasons my interest in other Telecom markets is limited). So what is up with the insane per minute costs in Europe? Well, basically those are there because the companies find them profitable, and don't feel like getting into a price war that will push them down. Now, that might seem obvious, but I know a lot of people think that the main Telecom company (that supplies the phone lines, in Sweden's case Telia) is the issue. They are not innocent, but then nor are any of the other players. Fact is, that most (like 90% or something) of the money you pay via your phone bill gets flushed right through to the ISP through agreements made when competition was first introduced to the Telecom market. As I understand it, the Telecom companies came up with the idea of having a fee for someone who carries traffic from their network, onto somebody else's, because back then the other networks in question were mobile phone providers, and the Telecom monopoly wanted part of the money made from calls on those phones. The ISPs love this: They get the money, which is ridiculously more than they have in costs, and the Phone company has to bill you, getting the badwill. They could easily set up their modems on their own networks, diverted at your local switchboard, and charge whatever price they wanted, but why would they do that? Why is this not the case in America? Well, if you look in the history books back to the age when Compuserve and America Online ruled America, it was. The thing that makes America (and some other places, like Australia I believe) different from here is that they have a very regulated Telecom market (in America there is a whole government organ, the FCC, dealing with it), and one of the regulations is that local calls are free. So while the big ISPs were charging their per minute rates, a lot of small ISPs appeared that didn't. These consisted of people who bought a 2 megabit line at 2k $ a month, and then signed up 200 people at 20$ a month, and had themselves a business. These small ISPs put the pressure on the big ones, who had to offer flatrate services to survive. In Europe, where local calls are free, only the ISPs who own (or rent) their own telecom networks can offer flatrate, and they don't want to, seeing as they are cashing out big time on the situation as it is. So is the situation hopeless? Yes and no. All markets where companies are making to much money, sooner or later competition sets in and adjusts things. That is why we love capitalism. BUT, the thing is, the companies are already competing, just not by lowering the prices. You ever wonder how the Swedish (and I believe other European) ISPs can afford to sell modems for free to new subscribers? Well, look on your phone bill. Yupp, those hundred of Euros you pay every month are buying Sportsters for Mr. and Mrs. Newbie-"I vant to be on de Inter-net"-lamer. Go ahead, weep. The reason for this is that the ISPs are not interested in stealing customers who already use the Internet from one another, instead they are interested in getting as many of the NEW users as possible. And new users have it pretty damn good today, being showered with gifts from the ISPs (the rebate on a new computer can be in the vicinity of 200 Euros is Sweden if you sign up with and ISP when buying it). Sooner or later, however, so many people will have signed up that the ISPs will have to start looking at one another, and then I think we will have a pricewar. In Sweden, I do see this happening, at least to some extent, in the not so far future. Most people know about the 1 month offer that Swedish ISP Tele2 had for half the minute charges this spring, but this is not what I am talking about, since they were using it to convince people to sign up for their long distance calling service, and never advertised it to people who were not already customers. However, a few weeks ago I received a letter from Tele2 asking that I start using the numbers on their long distance carrier permanently, and that the old "normal" numbers might be shutting down. That is a better sign. What about the new technologies like ADSL? A very tricky question that no one really knows the answer to, at least no one who has felt like sharing it with me. I received and offer from Telia right when I came back from Indonesia that to sign up for their ADSL service. The 2 megabit service came at the ridiculous price of-
Nope. The real breakthrough will be when ADSL becomes widely and cheaply available. Mine's hopefully coming before Christmas, but my ISP has to wait for BT to sort out their ADSL pricing structure first...
Lowering local call costs will make some difference, and it has to be a good thing, but I wouldn't call it a breakthrough.
"The invisible and the non-existent look very much alike." -- Delos B. McKown
>Don't US users pay a lot more for 'long distance'
:) I pay AT&T $9.95 a month to get 5c/minute around the clock (they advertise $5.95 for 7c; you have to know about this one to ask for it). (mm, and I have to cross a state line, I think, but I don't have any in-state long distance, anyway).
.25/minute at home under any circmstances.
>calls than we do anyway?
I doubt it
In my wallet is a calling card that I can use from any phone for 9c/minute to anywhere in the U.S.
And it's tough to get past
Don't you mean free evening and weekend enganged tones? :-) Screaming.net is *far* too slow for me. They've created too tempting a service, and so have more customers than they can deal with. They don't have enough bandwidth or the number of modems needed to cope with the demand.
I'd rather pay reasonable ISP and phone call charges to get a decent service.
"The invisible and the non-existent look very much alike." -- Delos B. McKown
I used to live in Korea up untill 4 months ago. (Got transfered back to the good ol' US of A) I used to spend about $150.00 a month on phone charges related to my internet calls alone. Anything anywhere that brings down this cost can only expand out into other areas and nations. Good luck lowering those phone bills. Besides lower costs means more use, means more knowledge gained, means the more we all gain from increased brainpower in the pool.
I'm sorry, I'm to tired to be witty at the moment so this message will have to do.
Visit the website http://www.unmetered.org.uk/ which explains the current state of legislation in the UK on telephony charging, what is being done to address it and why these announcements by BT & Freeserve are pretty irrelevent.
stty erase ^H
I've been in comms in the UK now at one level or another since back in the days when SuperBBS, RemoteAccess 1 and FrontDoor 2.02 ruled the waves. Let's apply a little more thought to the metered calls situation here :)
:) (/whew)
In the UK we only have one major telco - BT. There are others but to be honest they are still at a stage where they either can't supply the whole country or their service is not up to the standards. We had one bright light in the distance (Ionica) but that went bust.
Now, at the moment it is *OFTEL* that are forcing BT to keep their prices at a competitive level so that OTHER Telco's can compete. While all the other telco's are struggling to provide free or near free calls BT charge as normal (although their prices are really coming down - it's less than 60p an hour now, which is around $1).
If BT were to go unmetered for local calls then you'd almost immediately squash out the competition, you only have to look at FreeServe - they were one of the first (if not, THE first) ISP that did not have any subscription charges and they singlehandedly changed the face of the ISP market (I used to run an ISP, trust me on this one) in the UK.
So we'd have unmetered calls for a while, the competition goes bust, and then BT might start to raise costs (justifying them all the way, *ofcourse*) and without any significant competition for their customer base to shift to what would happen then?
The other major point to consider is bandwidth. Having run an ISP I know exactly how much bandwidth costs in the UK and trust me it is orders of magnitude more than in the US, while most startup ISP's in the US were coming on with a T1 (1.544 Megabit) line, startup ISP's were coming online in the UK with 64k or 128k Kilostreams and probably paying MORE for them.
The same is still true, the numbers on both sides of the equation are just bigger now.
You think it's slow in the UK during peak times? Difficult to get on? If we go unmetered at the moment the Internet will become unusable in the UK unless you have access to a fat pipe - you can forget dialups.
Personally, I pay for my subscription to an ISP because I know that this means their subscriber to modem rate is going to be good, as well as their modem to bandwidth rate - which is equally important, not getting a busy signal is only half the story if you can't DO anything when you're online.
I would personally love unmetered time online, but the bottom line is that I still want to use the Internet at a reasonable speed. I upgraded to ISDN 64k to get reliable connections at a decent speed and at the moment my 'pay for' ISP is happily able to fill a single channel or both channels whenever I require it. Until the cost of bandwidth, the lines themselves and the equipment goes down I believe that unmetered calls would spell the end to the Internet, certainly to any ISP smaller than Demon, AOL, UUnet or Freeserve.
(whew) what a lot of waffle
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Screaming Net is reportedly slow however. (it is a partnership between retailer Tempo, and telco LocalTel, just like Freeserve is a pertnership between Dixons and Energis)
http://www.08004u.co.uk/Are now doing unmetered calls 24x7. However you do have to pay 50UKP per month subscription. One day our telecoms regulator Oftel will get its finger out and sort BT out.
DWR is Ajax for Java
I was involved with the roll-out of ISDN to a number UK teleworkers a few years ago.
We had a constant problem where the ISDN connection to one teleworker's home would suddenly fail. A call would be placed to BT to resolve the fault, and it would eventually be fixed. In some areas this could happen two to three times a month.
I eventually managed to speak to a BT engineer. He stated that some BT engineers where cutting corners when connecting up unused pairs in the trunking system to traditional analogue phones. Instead of checking the documentation to discover which wire pairs were unused, to save time they measured the voltage across the pair - if there was no voltage it was assumed the pair was unused. Unfortunatly ISDN pairs also carried no voltage when not being used, and the ISDN pair got patched into the analogue network!
Of course BT never admitted a problem.
Also, when my employer relocated a few years back, it took almost a week for BT to get ISDN working to our new office. Since we relied on ISDN for our email communications to and from customers and suppliers, this was a major problem.
The FAQ on their website in answer to the question "Who should sign up?" states "Absolutely everybody". It does not say "Everybody running Windows 9x/NT". So maybe there is hope.
Failing that there's the Advertising Standards Authority (ASA). Failing that there's the little matter of a law, passed in 1996, which requires goods and services to be "as described". So if they accepted someone's money without being able to provide the service the claim then they have to return that money (plus costs of requesting the money back, plus court costs, plus interest if that person sues them.)
To be fair, though, it's not just BT. When BT was privatised in 1983, Oftel (the Office of Telecommunications) was set up to police their activities; at that point BT was a monopoly and Oftel was charged with preventing them suppressing the embryonic competition.
As one of these moves, Oftel refused to give BT permission to provide free local calls. In 1983 this made eminent sense; if they hadn't, BT would be a monopoly to this day. Oftel also banned BT from cross-subsidizing business units, so that the ISDN roll-out (which would have been feasible in some areas as early as 1986) couldn't be subsidized by the profitable business and trunk sectors, forcing BT to develop it more slowly.
BT's strategic response was to massively upgrade their network bandwidth, so that they'd be ready for video on demand in the mid nineties. Then Oftel dropped the other shoe and ordered BT to stay out of the cable TV business -- to protect the then-growing cable industry. (The UK's cable infrastructure was only installed in the early 1990's; technologically it's a couple of generations more advanced than that of the US, but it has lower uptake.)
Today, however, circumstances have changed. There's a thriving cable industry, lots of competing telcos, 25% of the population have mobile phones (growing by something like 5% per year). The original Oftel objection to BT providing free local calls or VOD doesn't seem to stand any more, and it's writing BT a meal ticket by enabling them to keep line prices artificially high. They demonstrated this earlier this year; to protect their leased line business, when Oftel looked about to order them to roll out ADSL, BT cut the rental on a 64K leased line (with routers and IP traffic) from about 7000 pounds to 3000 pounds a year. If they can still break even at that price point, it suggests there are huge economies they can make elsewhere ...
Much as my selfish side yearns for cheap, unmetered internet access, I feel that metered calls are a reasonable pricing scheme.
Unmetered calls mean that someone who makes a five minute call to their parents once a week, ends up subsidising people who spend all day dialled in to their ISP. That's just not fair.
Local calls *do* cost the telco money (the longer the average call becomes, the higher their peak capacity must become).
--
You have no idea how much I wish this was true. However, it's not. If I want a phone, I have exactly two choices: BT or Cable & Wireless. Mobiles aren't an option -- they can provide phone calls, but not ISDN or ADSL. Even if they could, living in the shadow of a large hill, mobile coverage at my house is poor from all four networks. So much for "lots of competing telcos".
What the UK really needs is true telco competition. Cable infrastructure should be owned by a single regulated company, and the end user should get to choose their service provider. This is how gas works, for example. TransCo own the physical pipes to your house, but the actual gas comes from whichever provider you've chosen. As it stands at the moment, cable companies effectively have a government approved monopoly in any given area. That's great for the company, but poor for the consumer.
"The invisible and the non-existent look very much alike." -- Delos B. McKown
Maybe I'm being dim here, but why are metered local calls "stupid"? If you're calling from one line to another on the same exchange, then there's an argument that you're not using any of the telco's resources and so should be charged a flat rate.
However, the "local" call regions in the UK, I believe, cover more than one exchange, and anyway, most ISPs that provide "local" access don't actually have shed loads of real local PoPs. They just have one huge connection to a telco and special numbers (0845, etc.) that are billed the same as local rates. Either way, all the time you're connected you're using resources. Why shouldn't you pay for them?
Theoretically we can provide ADSL. In reality, because of the way BT charge for access to their network it is impractical for any competition to do so until the local loop is unbundled (planned for 2002ish). What you're talking about is the wholesale deals BT offer to ISP's. What i'm talking about is the freedom for ISP's to choose to buy their ADSL connectivity from a telco other than BT.
stty erase ^H