1. “Stakeholder Priorities” - Oftel Forum - 2 Nov 01 David Harrington Director General, CMA

2. 1 Theme Broadband in the local loop Quality of Service Communications White Paper and Ofcom

3. 2 USO “We want to make sure that the UK is home to the most dynamic and competitive communications market in the world” “We want to maintain the UK’s competitive advantage in the rapidly changing international marketplace” “We will ensure universal access to a choice of diverse services of the highest quality” “We will promote the availability of widespread access to higher bandwidth services and bring together public and private sector stakeholders to develop a practical broadband strategy” “We will keep under review the case for requiring broadband services to be made available universally” BUT The UK is 11 th in the OECD league table of 13 nations rolling out broadband. By 2005 we might have risen to 7 th place.

4. 3 Q: How important is access to broadband for UK Businesses? Source: CMA/Total Romtec A: Very important

5. 4 Q: How important is access to broadband for UK Businesses? Source: CMA/Total Romtec A: Still very important

6. 5 Q: What services will be displaced by ADSL? Source: CMA/Total Romtec A: Dial-up & Leased lines

7. 6 Profile of ADSL in 2000/2001

8. 7 What can we do about broadband? The market has failed. (first, “technical problems”, then “no demand”, now “ no access to capital”) Countries with highest b/b penetration have active government involvement at national and local level. Commercial imperatives of 4 key players must be met (capital markets; b/b suppliers; content providers; customers). So intervene with public money AND inject new confidence/understanding into the market. Tax credits for suppliers and tax relief for consumers are essential – and fiscally neutral. Will Treasury play? Ensure capital market is properly briefed on the real opportunities and the influence of vested interests.

9. 8 Q: Are customers getting the quality of service they want? 562 respondents to the CMA survey - In private and public sectors The “Quality” question and the assessment of responses involved 9 main categories 24 individual criteria satisfaction ratings from 0 to 10

10. 9 Source: CMA/Total Romtec Q: What is the verdict on quality delivered by the ISPs? A: Must try!

11. 10 Q: What is the verdict on quality? Source: CMA/Total Romtec A: Poor and getting worse

12. 11 Self and Co-regulation Self-regulation –We do not have a nation-wide competitive environment: –Abuse of dominance is all too evident: –We are not yet ready for self-regulation: –We will have to back-up competition law with sector-specific regulation for a long time to come. Co-regulation –The key issue is finding the resources for effective consumer representation. : –There is suspicion that Oftel’s emphasis on co- and self-regulation stems from an underlying desire to cut the cost of regulation. –However, if Ofcom is to rely on effective consumer participation that participation must be properly supported and resourced: –Consumer representatives should be supported on a Euro-for-Euro basis.

13. 12 Vertical Integration Vertical Integration is already a threat to plurality of choice, diversity of supply and fair competition. It has: Prevented the emergence of a thriving third party sector in the provision of services carried on telecoms networks; Limited the choice of satellite TV programmes via the EPG; Stopped unbundling in its tracks; Deterred new start-ups and third party innovation; Prolonged the incumbent’s grip on SMP; Encouraged silly prices for 3G spectrum and thus contributed to the collapse of the BFWA auction.

14. 13 Cybercrime and Security The growth of e-Business depends on consumer confidence. Confidence is dented by the reported incidence of cybercrime. If Ofcom is to be true to its consumer focus it must adopt a public posture on this issue. Ofcom cannot be a policemen but it can act as consumer champion, ensuring that the operators don’t sweep cybercrime issues under the carpet.

15. 14 Some radical(?) thoughts Is it still valid to avoid regulating in favour of a specific technology? (Should we not be creating a favourable environment for fibre to the home and BFWA?) Ofcom needs the right people. (Oftel's turnover of staff is very high with legal secondees making up a high proportion of competition case officers). Regulation is a widespread profession, covering many industries. Do we not need a formal training/qualifications structure for regulators? The Coms White Paper proposes that Ofcom will be financed by the industries it seeks to regulate. However, the industry is restructuring and contracting. With fewer companies paying for licences are Ofcom’s revenues assured? Please will Oftel (Ofcom) ensure that any decision or working paper has the business and consumer impact simply and clearly stated, possibly as part of the Executive Summary?