Communicate EU BT European Affairs Newsletter • November 2010 • www.bt.com/europeanaffairs An open approach to net neutrality Net Neutrality is a complex issue that is becoming increasingly important for global policy makers. At BT we have put forward a set of principles for end users that, in our view, provide adequate responses to concerns surrounding the net neutrality debate. As a global operator operating in one of the world’s most competitive home markets, we have experience of the global issues driving the net neutrality debate and an understanding and drive for openness and competition. In intensely competitive markets such as the UK, it is unlikely that service providers can discriminate against particular legal traffic since their customers can easily go elsewhere. The issue becomes more important in less competitive markets, where customers are far more beholden to one supplier. BT has developed a set of principles which, we hope, will allow for open internet access whilst allowing competitive network providers to manage their networks. •Transparency – we will give customers meaningful information on their usage and on the network management techniques we deploy. We will provide an indication of the minimum and general level of experience our customers can expect – subject to their available access speed and the applications simultaneously using their connection. •Open access – customers should be able to use their internet connection to access and run the content and applications of their choice (provided they are legal). We will not block any legal service or seek to charge content or application providers for basic service. An individual user’s experience will depend on the access level/technology purchased and any relevant contractual conditions. •Fair competition – a competitive market is the best way to protect everyone’s interests rather than regulation. Customers should have a wide choice of internet access providers and be able to switch between providers without penalty, subject to their contracts. •Adaptable networks – internet access providers should be free to deploy techniques to manage congestion and optimise the performance of the various applications using their networks. We may limit throughput of non-time-critical applications in order to provide a better experience for all customers. We may also prioritise time-critical applications where this is necessary to deliver an acceptable performance. Network upgrading will be a continuous process in response to demand. A variety of commercial models will develop, some of which may include customers or application providers paying for enhanced capability, such as prioritised delivery. •Freedom of expression – we will not interfere with our customers’ freedom of expression (other than as necessary to deal with legal requirements). •Commercial activity with no undue constraints to innovation – internet actors should be free to develop new services and new business models for the future. Our digital agenda At BT, we are strongly engaged in making the digital society a reality, whether in areas such as fibre-based broadband, television and consumer services, or for global companies in the Asia Pacific region. We take a look at some of these in this issue of Communicate EU, starting with our commitment to an open, competitive internet, the subject of the European Commission’s consultation on ‘net neutrality’. We also offer concrete examples of how BT is serving customer needs in the UK and across the globe – we now provide access to new pay-TV content, and are pushing for lower-priced calls to mobile; we are accelerating growth in the Asia Pacific region; bringing super-fast broadband to rural areas; and exploring innovative new services in Cloud Computing and smart metering. All examples of BT delivering the Digital Agenda. Adrian Whitchurch, VP European Affairs IN THIS ISSUE: Net Neutrality Principles • Pay-TV • Asia Pacific • Rural Broadband BT European Affairs Newsletter • November 2010 • www.bt.com/european affairs Current issues for customers BT pass 15 million broadband milestone BT revealed that 15 million homes and small businesses now access broadband over the company’s network. The milestone was passed in late August with more than five million of those connections being via BT Retail and the rest via other companies who benefit from equivalent access to the BT network. “The story doesn’t end here as BT is now investing a further £2.5 billion to roll out fibre broadband to two thirds of the UK. This will help the UK climb the league tables for speeds, one of the few areas in which we don’t lead the world”. Given BT had approximately 200,000 broadband connections in August 2002, the company has added 14.8 million connections in just eight years. This equates to more than 5,000 new broadband connections a day. When Virgin Media customers are taken into account, the UK now has more than 19 million broadband premises using broadband. Those 19 million premises equate to 71% of UK households, according to a recent Ofcom report, compared with just 35% in 2005. BT is set to revitalise the UK’s pay-TV market following the announcement to offer cut-price Sky Sports channels for its BT Vision customers. Since 1 July, BT Vision customers can now subscribe to Sky Sports 1 and Sky Sports 2 for £16.99 a month. Subscription to a single Sky Sports channel costs £11.99 a month. Lowering mobile termination rates MTRs currently account for 4.7 pence, or more, of every minute of a call to a mobile. This is more than 10 times the termination rate charged to call a fixed-line phone. In 2008 alone, UK mobile operators charged people £750 million in MTRs for allowing fixed-line customers to call mobiles. BT Retail has launched a range of online self-help videos – see www.youtube.com/ btcare The videos follow research showing 64% of customers are prepared to go online for help – including 37% who welcome the idea of online support videos. A further 20% would go online if help was laid out in an easily understandable and easy-to-find way. Each video lasts between one and two minutes. They cover a range of topics including reducing Wi-Fi interference, setting up an email account and fitting a broadband accelerator. New videos will be uploaded every month and work is under way to load subtitles onto the content. Customers viewing the videos are being invited to comment on them and suggestions for new topics are welcome. Pay-TV competition kicks off with cut-price Sky Sports offer from BT Olivia Garfield, BT strategy director, said: “Broadband Britain has been a success story with widespread availability, low prices and high take-up. Last year, BT joined forces with mobile operator 3 UK and a number of other partners to launch a campaign calling for a significant cut in the cost of calling mobile phones. The Terminate the Rate campaign is calling for an end to high mobile termination rates (MTRs), the fees charged by one operator to another for connecting a call to another network. Other partners include the Federation of Small Businesses, Carers UK, the National Union of Students and the GMB, as well as a number of local authorities. Self-help videos aid customers Terminate the Rate is aiming to bring down MTRs to around a penny or less, saving consumers and businesses hundreds of millions. The European Commission has recognised that high MTRs penalise consumers and stifle competition, and has recommended that national regulators like Ofcom take a new approach to setting MTRs to bring them down to reasonable levels. The campaign is calling on Ofcom, which has just finished consulting on a review of MTRs, to implement changes to drive down the cost of MTRs promptly. An Ofcom decision is due later this year. Customers who commit to a bundle of broadband and calls for 24 months are also entitled to receive BT’s ‘total sports package,’ which works out £205 cheaper than Sky’s current equivalent deal and £281 cheaper than Virgin Media over a year. This new competitive market pricing follows a recent ruling by Ofcom which called on Sky to wholesale Sky Sports 1 and Sky Sports 2 at regulated prices to rivals such as BT. Gavin Patterson, chief executive of BT Retail, said: “Football fans will be cheering our new prices, which mark an end to paying for basic channels when you only want the sport. A more competitive market will ensure that customers continue to get the best sport for the sharpest prices and this opening of the market will be in the best interests of customers”. BT estimate that around four million more people in the UK would like to sign up for Sky Sports channels but felt that it was too expensive. BT European Affairs Newsletter • November 2010 • www.bt.com/european affairs BT accelerate major growth programme across Asia Pacific BT Global Services announced the roll-out of the first phase of its investment programme into the Asia Pacific region, covering additional resourcing, new infrastructure and expanded portfolio of services. As part of this plan, BT is in the process of hiring around 300 new positions across Asia. This will ensure that key portfolio and services enjoyed by BT’s customers around the world can be offered and fully supported in Asia Pacific. New staff will be employed across the region in the key customer markets of Australia, China, Hong Kong, India, Japan and Singapore. BT is also establishing a bid response centre in Singapore to enhance its capabilities to pursue large regional managed services deals, an area where we lead the market today in many parts of the world. The expansion of the in-region proposition portfolio will allow BT to provide enhanced service delivery capabilities, as customers invest throughout Asia Pacific, a region that is playing an increasingly pivotal role in the decisions of global multinational corporations. Approximately 80% of BT’s largest customers by company turnover are expanding in Asia. Jeff Kelly, CEO BT Global Services, said: “We looked at what our top customers needed to be more successful in Asia Pacific. Our research told us they want a broad suite of propositions and professional service capabilities that are the same wherever they operate”. Customers will see enhancements to existing products and roll-out of new services. This will include in-region capabilities in managed networked IT solutions including voice and Internet Protocol (IP) services; managed security; unified communications; contact centre capabilities; mobility and data centre support. As part of the investment into the region, BT is also opening a suite of new customer technology showcase centres in Beijing, Delhi, Hong Kong, Singapore and Sydney where customers can interact directly with leading-edge technologies and propositions. Neil Sutton on cloud computing Neil Sutton is BT Global Services’ vicepresident of Global Portfolio. He discusses the importance of the cloud to BT GS and its customers. Along with his team, he looks after the portfolio of products and services for our global enterprise customers, as well as our UK public sector and commercial customers. Why is the cloud of such strategic importance to BT Global Services right now? I think it’s to do with what the cloud stands for rather than it being a piece of technology. ‘Cloud’ can be interpreted in many ways, but cloud services always have the same attributes: being highly elastic, predictable, self-serving, good-value and encouraging innovation. These values are core to our portfolio strategy and are embedded in our customer demands, along with addressing the concerns of security and risk management. Our strategy is to put more and more services on to global platforms that put the customer in control. To what extent is GS blazing a trail with its cloud strategy? I think it’s fair to say we are setting the pace when it comes to aspects of cloud services, such as communications as a service. We are really strong in this particular area with our integrated voice and Unified Communications offers (such as Hosted IPT, SIP, BPOS, OneVoice and TelePresence). BT is also pioneering when it comes to innovation across cloud services. For example, BT Innovate & Design have developed a concept known as Cloud Broker, which helps to manage and deliver the right services and applications over the right network infrastructure based on application and business rules. We are also leading the pack when it comes to CRM/contact centre infrastructure as a service – through our NGCC Cloud offering. Does BT GS’s rich and extensive global network give it a distinct advantage over others in offering cloud-based services to MNCs? Yes. However, it’s important to remember that one of the biggest risks to offering cloud services lies with the end-user experience. The bigger the scale, reach and complexity, then the greater the risks. That’s why we are focusing our efforts on developing application performance management services across our networks – to help us to reduce that risk. Where do you think the future of cloud services lies for service providers like BT GS? We will continue to see the demand for bandwidth increase, which means we will continue our drive towards creating even more intelligent and optimised networks on behalf of our customers. We’ll also need to introduce more enabling services like security, which will allow customers to take advantage of new services – otherwise, security and compliance could become barriers. I also think we are not far off seeing cloud application stores becoming commonplace, along with a set of services that allow customers to manage both cloud and noncloud-based services as one. BT European Affairs Newsletter • November 2010 • www.bt.com/european affairs BT’s massive boost for rural broadband BT and Cornwall Council have announced an ambitious £132million project to bring superfast broadband to the county and the Isles of Scilly. The project, which is part-funded by the European Union, will provide superfast fibre broadband access to up to 90% of local businesses and homes by 2014. BT is providing £78.5million towards the project with another £53.5million funded by the European Regional Development Fund. Up to half of local businesses and homes will have access to fibre-to-the-premises broadband services which deliver the UK’s fastest broadband speeds of up to 100Mbps. BT’s chief executive Ian Livingston said: “This is a very significant project that, once again, positions Cornwall as a broadband leader. It will make the county one of the best connected areas in the world and provide a major boost to its prosperity”. Alec Robertson, leader of Cornwall Council, said: “The introduction of next-generation super-fast broadband has the potential to transform the local economy over the next 20 years. Local businesses will be given an all-important head start through early access to world-class communications and this will dramatically increase their competitiveness. The high speeds on offer will attract new business investment into Cornwall, creating thousands of new job opportunities”. BT propose secure long-range radio for national smart meter rollout BT announced it is joining forces with Arqiva and Detica to offer a dedicated and secure long-range radio communications solution for the Government’s proposed smart metering initiative. Due to cover 28 million homes and small business properties by 2020 or sooner, this multi-billion pound initiative is designed to reduce energy costs and lower Great Britain’s carbon dioxide emissions by 2.6 million tonnes per year when the rollout is complete. The envisaged solution will create a dedicated network specifically for the smart metering programme and use Arqiva’s radio spectrum and extensive radio infrastructure, with BT providing its expertise in delivering complex national IT and telecommunications projects and Detica providing robust information and infrastructure security services. The partners will be supported by Sensus, who specialise in enabling smart meters and smart grids, and they will be providing their long-range radio technology, FlexNetTM. Their technology is already widely proven in other countries and this experience will ensure that the companies benefit from lessons learnt elsewhere. Olivia Garfield, BT Group Strategy Director, said: “Smart meters will use telecommunications to deliver important environmental benefits and so BT is determined to be at the heart of the project. It is vital that any solution is designed for ubiquitous coverage of homes and is thoroughly secure and resilient”. This partnership between three of the UK’s leading communications network and IT service providers brings together a leading combination of design and operational experience in the delivery of national, largescale, communications and IT infrastructure projects to meet the smart meter challenge. BT signs EU code to reduce electricity consumption BT was the first UK company to sign up to Europe’s code of conduct on broadband energy consumption at a ceremony in Brussels this week. At the ‘ICT 2010-conference’ 16 ICT firms signed – in the presence of European commissioner Neelie Kroes – the code to reduce the electricity consumption of their broadband equipment and data centres. The code is intended to encourage communication providers and network equipment providers to design, build and deploy equipment which conforms to stringent power consumption limits. Information & Communication Technology (ICT) equipment and services consume over 8% of electrical power in the EU and produce about 4% of its CO2 emissions. These figures could double by 2020. These voluntary commitments from the ICT sector relating to broadband will, however, lead to large electricity savings of up to 25TWh per year in Europe by 2015. Leading the pan-BT team preparing for the signing was BT Group Portfolio general manager Mauro Mortali. How to contact us Adrian Whitchurch VP European Affairs +32 2 237 1718 [email protected] Till Kupfer VP Trade and International Affairs +32 2 237 1713 [email protected] Henk Mannekens European Regulatory Manager +32 2 237 1757 [email protected] © British Telecommunications plc 2010. Registered office: 81 Newgate Street, London EC1A 7AJ. Registered in England No. 1800000. Produced by BT Group Communications. Designed by Tag. Printed on recycled paper.