MPs on the wrong line



Richard Woods

Soapbox

Last month a cross-party alliance of MPs told BT to follow the example of British Gas and ditch its...



Richard Woods

Soapbox

Last month a cross-party alliance of MPs told BT to follow the example of British Gas and ditch its standing charge.

The gas standing charge covers fixed costs like the meter, reading, billing, emergency provision and change of user. BT will say the same sort of thing, adding that it covers the costs of safely running a 24x7 network. Oftel accepts this and even recognises that the rental doesn't cover the real costs of running the network. BT, therefore, is allowed to increase the rental annually.

It is questionable that any increase can be justified on rising costs. Most of the modern network is installed and the running costs of a modern exchange are tiny.

It seems a good case for trimming or eliminating the charge. But if a digital economy is going to flourish, this may not be so.

For a start, the current Oftel regulatory controls mean any increase in the rental has to be balanced by cuts in call charges. So BT slashes call prices as it raises line rental. Go a little further and levy a high fixed charge in return for no call charges at all.

It is, of course, the model that underpins un-metered access. A customer pays for packages of fixed IP bandwidth appropriate to the level of their usage. They use as much as they need for e-mail, surfing and whatever. And, of course, the network to the door is digital and runs IP over copper or fibre.

The MPs have got it wrong - understandable when BT wants to keep both standing and call charges, plus talking up the digital economy too. A parliamentary charge would be better levelled against the slowness of BT to give up its monopoly on the local loop and allow co-location at those exchanges rather than this particular canard.

Richard Woods is corporate communications consultant at Internet service provider UUNet

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