London Assembly lays into BT over poor business broadband

Allan Swann Published 12 July 2012

The London Assembly and invited experts accuse BT of monopolistic practises, claiming it damages opportunities for start ups in London's tech city.

The London Assembly's Economy Committee held an investigation into the impact of broadband speed on the capital's economic performance yesterday, and appeared to place much of the blame at BT's feet.

The quality of London's broadband is so poor it does not even make the list of top 30 performing cities and is causing real problems for businesses, the London Assembly heard from its assembled panel of experts.

According to a Greater London Authority Report, London's average download speed is just 5.8mbps, compared to 29.9mbps in Seoul, South Korea, 15mbps in Tokyo, Hamburg, Rotterdam and Helsinki.

Ofcom's research showed that the national average for retail consumers was 7.6mbps late last year.

"London's broadband is becoming the 21st century equivalent of tin cans on a string. There is no doubt that this is having a detrimental effect on the capital's competitiveness and is hampering both old and new businesses, as well as many residents," said the Chair of the Economy Committee, Andrew Dismore.

Dismore also took aim at Mayor Boris Johnson for dissolving the tech advisory board, amidst concerns that advice might be high jacked by vested IT interests.

The committee's experts included David Hodges from the London Chamber of Commerce, Greg McCulloch from Interxion, Mike Butcher from Techcrunch and Robert Milne from Antelope Consulting, followed by a panel of industry providers, including BT's London General Manager, Andrew Campling.

The expert panel appeared to apportion most of the blame to BT's malign influence on the sector, through long install times and poor speeds, tied to its near monopoly of the UK's fibre network.

One of the key repeated warnings is that start-ups are starting to avoid London, and that existing companies are looking to move out to newer tech hotspots, such as Berlin.

BT is allegedly taking up to three months to set up broadband access - meaning one company had to use dongles so they could carry out day-to-day work.

BT's Andrew Campling denied the allegations, saying it took seven days, on average, to connect broadband in London.

Hodges told the committee that in Switzerland companies can be connected in 2 hours.

He also claimed that the Assembly's stats about London's broadband speeds were incorrect.

"I'm sorry I don't accept that it is slow in London," he said.

"We also have some of the most competitive retail pricing [for broadband] in the world."

BT claims that, through BT Openreach, 80% of UK broadband users will have access to 80-330mbps broadband by year end, and that the company is investing ?2.8bn per year on infrastructure upgrades.

The experts read out several criticisms from Shoreditch customers, including one who described the situation as "worse than communist Romania" and "we have no idea how Shoreditch has attracted any customers whatsoever".

SMEs need to start paying rates, power and water bills and wages from day one, regardless of internet status - and this is financially crippling, especially since many are on contract jobs and utilising limited venture capital. It becomes too risky to set up in London.

Mr McCulloch told the committee that London already has enough disadvantages, such as high real estate prices in the area, and that start-up costs across the board need to fall - especially when it comes to broadband and wireless connectivity.

Mr Hodges told the committee that the problem spreads further than the silicon roundabout, and is affecting London's booming creative industries based in Soho.

"It is a success story, but we can't get complacent. There are 48,000 employees at work there, and a third of them are concerned about connectivity, reliability and service," he said.

Upload speeds are vital for media production and publishing, and it appears to be lacking, another problem alongside download speeds.

Butcher described BT's behaviour as similar to the "Mafioso" in that it asked for payment from customers to dig up streets, or it wouldn't do the work.

Campling didn't seem impressed by the accusations levelled at his company, especially since Jon James, from Virgin Media, sitting beside him, got off scot free.

"Those are some interesting anecdotes. But you need to look at the facts, not just anecdotes, if you want to make policy in my opinion," Campling responded.

Dismore wasn't letting Campling off the hook.

"I think these are rather more than anecdotes, Mr Campling. The whole reason we're having this inquiry is because we've had so many representations about the problems that businesses are facing here; in trying to get connected to broadband and develop their businesses; and the [subsequent] risk of these businesses moving elsewhere," said the chair.

Fellow Assembly member Andrew Boff agreed.

"What you are doing is you are actually affecting London's productivity as a whole."

Source: http://telecoms.cbronline.com/news/london-assembly-lays-into-bt-over-poor-broadband

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