Digital-Lifestyles – Page 321 – Digital-Lifestyles pre-empted and reported thousands of articles on the then-coming impact that technology was to have on all forms of Media. Launched in 2001 as a research blog to aid its founder, Simon Perry, present at IBC 2002, it grew into a wide ranging, multi-author publication that was quoted in many publications globally including the BBC, was described by the Guardian as 'Informative' and also cited in a myriad of tech publications before closing in 2009

Digital-Lifestyles pre-empted and reported thousands of articles on the then-coming impact that technology was to have on all forms of Media. Launched in 2001 as a research blog to aid its founder, Simon Perry, present at IBC 2002, it grew into a wide ranging, multi-author publication that was quoted in many publications globally including the BBC, was described by the Guardian as 'Informative' and also cited in a myriad of tech publications before closing in 2009

Google Adds New Personalised Search Features
Google has launched an updated beta version of its personalised search tool that learns from your history of searches and search results you’ve clicked on, shuffling more relevant results to the top of the page.
Here’s how it works: if a mad keen boozer was always searching for man-sized glasses to sup his ale from, Google would learn from his search history with future searches for the keyword “glasses” automatically serving up glass-related results, while ignoring results for the four-eyed variety.
Similarly, if the surfer was a teetotaller with an Elton John-like obsession with spectacles, Google would only serve up spec-related results and links when they searched for “glasses”.
According to Google’s Marissa Mayer, the more users search and build up a search history the better the results will become.
“We need to have a history of the user,” Mayer added. “When people first sign up they may not see results right away, but it will build over time.”
Consumers need to have a Google account for the free service and those using the previous version of the personalised search service will automatically be switched to the new version.
The service only works when the user is signed on to their Google account.
Clearly, there could be a shedload of potential privacy concerns here with the search history feature compiling a detailed list of every page you’ve ever searched for, but sneaky surfers hoping for a bit of discrete titillation can sign out of the personalised search service, pause it or remove it through their accounts page.
Furtive track-coverers can also remove individual items from their search history as well.
This latest personalised search beta is a refinement of the previous version, launched in March 2004, which only customised searches after users had manually selected categories of interest.
Like all Google public betas, the new personalised search service is currently sitting in Google Labs, described by the company as an “engineer’s playground”.
Mayer said she could not speculate on when a final version will be launched, adding that Google will not be customising advertisements based on the personalised search.
This latest search development reflects Google’s drive to let users customise their Web experiences, and follows on from the personalised Google home page feature introduced in May.
Google labs
29 June, 2005
Handango Announces the Champion Award Winners for 2005
Mobile download site Handango has announced the winners of their Champion Awards at the fifth annual Handango Partner Summit.
Judged by a panel of industry boffins, experts and media, the Handango Champion Awards were dished out for applications written for BlackBerry, Palm OS, UIQ, Series 60 and Windows Mobile-based Pocket PC and Smartphone platforms.
The categories were Best Application for Work, Best Application for Play, Best Application for Life, Best New Application and Best Industry Application.
For the Palm platform, the winners included Snapper Mail Deluxe in the ‘work application’ category, with Pocket Tunes Deluxe scooping up the ‘Play’ category.
SplashData’s SplashBlog – a nifty application that lets mobile users easily create and update a mobile photo blog – grabbed the coveted “Best New Application” award.
Winners in the Windows Mobile Pocket PC included high-powered organiser software Pocket Informant 2005 (“Work”) and the ultra-configurable Today plug-in, SPB Pocket Plus. Expect reviews on these products in the near future.
The comprehensive MobiLearn Talking Phrasebook, a talking multi-language phrasebook for the Pocket PC with “pure native voices”, snagged the “Best Industry Application” award.
Other winners included Mobimate’s WorldMate and Mail2Fax on the BlackBerry platform, Papyrus and NewsBreak on the Windows Mobile and Quick Office Premiere and IM+ Instant Messenger on the Series 60 platform.
In the Developers of the Year category, hearty back-slapping plaudits went out to Develope One (Pocket PC), Chapura (Palm), Ilium Software (Windows Smartphone), Terratial Software (BlackBerry), Mobile Digital Media (Series 60) and Epocware (Series 60).
Full list of the winners here
29 June, 2005
Wanadoo Turns Orange
Long time customers of Wanadoo (formerly Freeserve) might be forgiven for forgetting who they’re connecting with after the company announced yet another rebranding.
Promising customers a “smooth changeover”, owners France Telecom will be bringing their Wanadoo service under the umbrella of their high-profile brand, Orange.
The move is part of a strategy to make Orange become “the Group’s international commercial brand for mobile, broadband and multiplay offerings”.
The well-recognised Freeserve name was taken over by Wanadoo just 14 months ago, but France Telecom insist that the latest rebrand will better reflect the portfolio of services to be offered.
These include combined mobile and internet access, a broadband telephone that tells with email notification and remote surveillance of your home through a mobile or a computer.
A spokesman for ~~Freeserve~~, ~~Wanadoo~~, Orange said: “The Wanadoo brand has been an enormous success enabling us to become a broadband leader in the UK. But we are now entering the era of convergence where our customers will experience a new generation of high value and exciting converged services.”
“These services will allow our customers to be able to communicate at home, at work or on the go. A single brand representing these integrated services – the Orange brand – is the way forward.”
The spokesman added that customer’s email services will be uninterrupted, with users still contactable whatever their domain name.
As convergence continues to impact in the teleco sector, France Telecom’s move should ensure that customers will get their mobile, broadband, video-on-demand and fixed line services all from the same company, slapped on the same bill.
If they’re not too confused, of course!
Wanadoo
France Telecom
29 June, 2005
MGM vs Grokster Copyright Case Reviewed
Yesterday the US Supreme Court published their 55-page decision in MGM v. Grokster case. The headline summary? The file-sharing software companies lost and the media companies won. Delve a little deeper and it becomes more confusion.
Predictably reaction has been mixed. The Motion Picture Association of America (MPAA) hailed the court’s ruling as a “historic victory for intellectual property in the digital age.” On the other side of the fence, the EFF reaction was an expected contrast, “Today the Supreme Court has unleashed a new era of legal uncertainty on America’s innovators,” said Fred von Lohmann, EFF’s senior intellectual property attorney. “The newly announced inducement theory of copyright liability will fuel a new generation of entertainment industry lawsuits against technology companies. Perhaps more important, the threat of legal costs may lead technology companies to modify their products to please Hollywood instead of consumers.”
Background – How have we got here
As is well documented, the US media companies have been taking legal people who have previous been their customers, accusing them sharing music and films without authorisation. In many cases these people, or their parents have opted to pay a thousands of dollars in damages to the music companies, rather than risk going to court to defend themselves.
The media companies have found this approach very expensive as each of the people using the filesharing software has to be tracked down and pursued individually. As the file-sharing networks have millions of people using them at any given times, this is not a realistic way for them to stop these actions.
The media companies have, through their well-know and influential political lobbying, attempted various approaches to stop their media being shared without their permission – the most extreme so far was trying to make using P2P software illegal in the US. Happily, so far, this extreme idea hasn’t been successful.
Broad-brush approaches like this hurt the innocent as well as the people the media companies want to stop. P2P software such as BitTorrent is simply more efficient, economical way to distribute large file, such as audio and video. Digital-Lifestyles often uses BitTorrent as it reduces our hosting charges, as people who download the file also become distributors of the file, reducing the load on our servers.
Taking the direct approach
While going after individuals has, in the eyes of the media companies, has been successful, it’s expensive and time consuming. Yesterday’s ruling was about going after the makers of the file-sharing software – with the logic being, if you close them down, people won’t be able to share files.
Back in 2001 28 of the world’s largest entertainment companies started this legal action against the makers of the Morpheus, Grokster, and KaZaA filesharing software products. A number of legal cases have already been fought in the lower US courts, with the most recent finding going in favour of the defending file-sharing companies – Grokster and StreamCast, makers of Morpheus.
The Electronic Freedom Foundation (EFF), who have been assisting the software companies in their defense, felt a precedent had already been made for this. Back in the 1984 the US film studios went after the makers of video recorders, claiming that if there were to be sold the whole of the film-making business would vanish. The Sony vs Universal Studios case, or The Betamax Case, as it has more popularly become known, ruled that the manufacturer of a piece of equipment could not be held liable of uses that might infringe copyright. In legal circles this is know as Secondary liability.
(By a twist of corporate fate, Sony now owns MGM)
Where we are now
The ruling yesterday appears to be contrary to the findings of the Betamax Case. Justice David Souter said “We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by the clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.”
If a company makes and sells a device that is then used to distribute copyrighted material, the company is acting illegally.
While the court case is about software, it is important to note that the ruling isn’t just about software, it talks of a ‘device’. So this ruling could have impact on any service or piece of equipment that handles copyrighted material, be that Google, TiVo, iPod, etc.
While the media companies have met the ruling with excitement and delight, others are quite as sure. The sticking point is the use of the word Intent.
John Barrett, Director of Research at Parks Associates told Tom’s Hardware “I suspect [litigants] will spend the next five to ten years arguing over what exactly is ‘intent.’ The issue is, is it enough if you make everybody digitally sign off on some disclaimer that says, ‘I’m not going to use it to trade illegal files?’” Will networks have to actively search for and purge illegal files, or filter out files from being disseminated, or only allow certified content to be traded? Barrett asks. “It’s going to be a mess, because you’ve got to start down that road where the P2P guys are obviously going to try to paper over something with some disclaimers and a few splashy warnings, that just get ignored by everybody.” By way of comparison Barrett added, “It’s the same thing as when you go to the college library, [and] you see this little sign by the Xerox machine saying, ‘Copyright infringement in this area is a crime, etc., etc.,’ and then everybody just copied the books and ignored the sign.”
Others have brought forward the comparison with gun manufacturers. When guns are designed and manufactured these companies are not called to account when someone is shot dead by one of their products – considerably more serious that someone copying a piece of music or a film. The cited argument is “Guns don’t kill people, people do.”
What the future will hold?
Well, the debate will rage on both sides as to the long terms effect of this ruling.
On the legal front, the case has been sent back down to lower courts in the US, where the future fate of the file-sharing companies could be sealed.
Beyond that, many man-years of chargeable legal hours will be racked up as spectrum of companies try to understand how they are effected.
Many companies or trade organisation that have any thing to do with Intellectual Property Rights (IPR) will come out in the press supporting the ruling, many other will come out decrying it.
There will be a lot of people in tech companies convening meetings attempting to work out if they or their products could be affected by this ruling. Companies will examine their own internal processes in an attempt to understand if they could be found guilt of providing intent of copyright infringement.
As to whether this will impact the very existence of innovate start-up companies in the US, as Cory Doctorow claimed in a piece in Popular Science, can only be reveled with time, “what today’s decision will kill is American innovation. Chinese and European firms can get funding and ship products based on plans that aren’t fully thoughtcrime-compliant, while their American counterparts will need to convince everyone from their bankers to the courts that they’ve taken all imaginable measures to avoid inducing infringement.”
Supreme Court ruling (PDF)
MGM
Grokster
EFF
28 June, 2005
VeeStream Enables “i-Pod-Like 3G Music Video Service”
Vidiator Technology has declared a “world first” for their VeeStream mobile music video service, launched in Scandinavia.
There’s currently more than 50 live broadcast channels on offer, letting mobile subscribers “use their phones like i-Pods”, with an unlimited hard-drive housed on the mobile network.
The service enables subscribers to watch and listen to music through mobile streaming on their video-enabled mobile phones. After a free trial from May-Aug 2005, mobile subscribers can shell out a monthly fee under US $7.00 (~€6.00~£4.00) and gorge themselves on unlimited programming.
After launching with an audio service in May 2005, video is scheduled to follow in June with radio coming in July.
“Vidiator is one of the key partners who enable us to be the innovator in the Scandinavian Market,” insisted Shlomo Liran, CEO of 3 Scandinavia. “We are a mobile video company, not just a mobile voice company. Vidiator streaming technology makes it possible for us to deliver new services and to stay ahead of our competitors”.
The service uses VeeStream, a rich media streaming platform, which delivers high quality audio and video streaming content on-demand for 2.5G and 3G network operators, regardless of format player, handset or network.
The clever boffins at VeeStream claim to have solved the problem of network bandwidth availability by using ‘dynamic bandwidth adaptation’ (DBA) a patent-pending, open-standards based technology.
The real-time DBA does its stuff by optimising throughput over scarce radio frequencies, while creating a higher ratio of delivered streams than competing technologies.
With the 3GPP/3GPP2 compliant VeeStream being player-agnostic, mobile streaming can be enabled to a broader range of networks and devices, which should bring costs down for wireless operators.
“Vidiator is a solutions provider, not purely a software company,” said Connie Wong, Vidiator’s CEO.
“VeeStream is the most proven carrier-grade wireless streaming technology in the market due to its robustness, scalability and modularity. Carriers like 3 Scandinavia only have to ‘plug and play’ off their existing Vidiator streaming platform running other applications to add 50 audio and video channels, including live broadcast services like Big Brother.
This scalability enables quick time-to-market for new content, lowers system configuration and operation costs and boosts revenues”.
Personally, I’d rather sit bare bottomed on a bag of angry live crabs than try to watch Big Brother on a squinty little mobile phone screen, but there’s no denying that such pap can help drive network take up and revenues for 3 network providers.
Vidiator VeeStream
28 June, 2005
Geeks Take Over The UK
Long shunned as hobby-obsessed lonely losers living in messy bedrooms with a dreadful taste in music, geeks, computer spods and sci-fi nuts have revealed themselves as a lucrative target for advertisers.
The Sci Fi Geekforce Report, a new study by the Sci-Fi channel service, reveals geeks to be high-spenders with the power to make or break billion-pound brands.
With Borg-like numbers (nearly 7 million in the UK), the collective buying power of geeks is making cappuccino-supping noo meedja types sit up and reach for their mood boards, with the survey estimating the “geek pound” to be worth a staggering £8.2bn (~€12bn ~ US$15~)a year.
The research, undertaken in association with marketing specialists TGI and media agency Rocket, also revealed that the geeks are predominantly ABC1 consumers, with some 33% of their number being female.
The bigwigs of Sci-Fi conducted the research to try and work out the popularity of the multi-billion dollar genre when it was supposedly the province of “solitary, unpopular individuals with niche interests and questionable personal hygiene habits.”
Dan Winter, head of press at Sci-Fi, declared himself “blown away” by the survey, which challenged many of the stereotypes.
For example, far from being long-term bedroom dwellers with only a death metal collection for company, the survey revealed geeks to be sociable animals, 52% more likely than the average person to have had four holidays in the last 12 months and 125% more likely to visit pubs, clubs and bars.
Nearly 40% of geeks believed their special interests make them attractive to the opposite sex, although we’re not convinced that, “Hi! Have you seen the latest Asus motherboard?” is a winning chat up line.
The bit that will get the advertisers moist in their strap lines is the fact that geeks are 90% more likely to be the first among their chums to invest in new products.
Martin Heaton Cooper, advertising sales director for Sci Fi, commented: “It’s clear that in a time of advertising overload and scepticism, the mainstream is turning to their new geek counterparts to help them make product decisions.”
The Sci Fi Geekforce Report is due to be released in July.
Sci-Fi
28 June, 2005
BT Project Nevis Selects Microsoft IPTV For UK TV Over Broadband
In a cornucopia of convergence, BT has announced their intention to use the Microsoft TV Internet Protocol Television (IPTV) Edition software platform to deliver TV over broadband in the UK. Internally within BT, the project is referred to as Project Nevis.
The Microsoft TV IPTV Edition software platform lets broadband network operators whizz high-quality video content and services down the wire to their customers using existing and next-gen broadband networks.
The platform delivers cost-effective and security-enhanced delivery of a whole gamut of pay-TV service offerings, including standard- and high-definition channels, on-demand programming, digital video recording, and interactive program guides.
There are extra consumer-pleasing gizmos in the package too, with features like instant channel-changing and picture-in-picture functionality using multiple video streams.
Unlike most consumer pay-TV delivery systems, the Microsoft TV platform allows network operators to integrate the delivery of pay-TV services with other networked broadband services in the home such as PCs, telephones, game consoles, mobile devices and other gadgets.
Gavin Patterson, Group Managing Director of BT Retail slipped on his buzzword moccasins and danced a soft shoe shuffle to his Big Vision:
“BT and Microsoft share a common vision for converged entertainment in the home. TV over broadband services will play an important role in BT’s triple-play offering for consumers. Our approach of over-the-air broadcast and broadband-delivered video-on-demand, interactivity and enhanced support is the perfect solution and complements existing TV propositions already in the UK market. The combination of Microsoft’s best-in-class technology with BT’s 21st-century network will result in an incredibly exciting set of next-generation entertainment and communication services available to consumers across the UK.”
As the sound of mutual backslapping threatened to reach ASBO-generating levels, Moshe Lichtman, corporate VP of the Microsoft TV division gushed:
“BT is a great example of one of the world’s leading network operators choosing Microsoft TV as the software platform for its digital TV and converged entertainment services.”
“We are very pleased to be working with such a well-respected and innovative operator as BT. Microsoft TV IPTV Edition will enable a full suite of integrated entertainment and communication services that will set the bar for what consumers will expect,” he added.
BT plan to start trials of the TV over broadband service in early 2006, with a commercial service expected to start in the summer of 2006.
Microsoft TV
BT
28 June, 2005
France Telecom / Cable and Wireless Potential Deal Examined
Last weekend there was a report that France Telecom (FT) were rumored to be buying Cable and Wireless (C&W) for GBP 4bn. FT has of course denied it.
Though the telco market is consolidating, it does seem an odd match.
FT is the French equivalent of British Telecom (BT) the incumbent operator. The French government still owns a considerable portion of FT (though it has recently released a number of shares on to the open market).
C&W a UK monolith
C&W comes from the old school of telecoms, it’s a giant. It was half of the duoploy with BT when the telecoms market deregulated in 1994 (under the Mercury brand). It became very cash rich (to the annoyance of C&W’s shareholders), but like every other telco was hit hard by the telecoms crash after the dot com boom. They sold of their US operations (apart from the Caribean where they are still a virtual monopoly and very profitable) and have concentrated on their core UK operations.
As a telco, C&W has become very aggressive with their pricing especially in the wholesale minutes market and carry a lot of traffic for UK “switchless” providers and Carrier PreSelect (CPS) companies. They’ve become so aggressive they’ve been accused of predatory pricing (i.e. selling under cost to win business in the hope that it wins further business) but that’s not been proven.
They are trying to move into new areas and have announced new products such as VoIP, but as yet these are really marketing noises.
One area where they have invested in and have made real progress is Local Loop Unbundling (LLU) with their purchase of Bulldog (for GBP 18m). Bulldog have now unbundled about 400 exchanges and have plans to unbundle another 400 by the end of the year.
The C&W and Bulldog acquisition has had teething problems, cutting over to the vastly increased C&W infrastructure didn’t go particularly smoothly with customers losing connectivity for hours at a time. There are still on-going problems.
FT and C&W, not an ideal match
Would FT purchase C&W, well they might, but it would be an expensive buy.
Wanadoo (the ISP arm of FT) has stated they are going to invest EU 300m in unbundling exchanges (in the first year) and rumour has it there’s a total of EU 1bn over 3 years for LLU. So FT could buy C&W just for the LLU aspects, but really does seem excessive. C&W bought Bulldog for GBP 18m and they’ve invested at least 10’s of million into them. So 4bn is a HUGE premium to pay for a ready made network and 10’s of thousands of customers. Wanadoo already have considerably more broadband customers than Bulldog.
C&W have a big network, with good links into most of the telecoms companies in the UK, that might be of some value but the global number of call minutes is decreasing (as people move to VoIP) and the value per minute is decreasing even more rapidly (as flat rate calls – especially in the VoIP arena – become the norm). A call to anywhere in the world is now approaching around 2c (on average) per minute.
Another minus point is that FT already have a UK network (they purchased Equant), so having an old legacy telecoms network can’t seem that attractive.
There’s also Orange to worry about (the mobile side of FT), they also have considerable UK telecoms infrastructure.
All in all it doesn’t seem a good fit, though of course there may be another completely hidden agenda.
France Telecom
Cable and Wireless
Bulldog DSL
24 June, 2005
Finland Plums for Flarion Flash-OFDM. Europe to follow?
The announcement of the Finnish 450 MHz cellular data licence isn’t today’s surprise; the surprise is that Flarion – the technology provider – is not announcing that Flash-OFDM is now an ITU standard. There should have been such an announcement: why the delay?
Politics is as important as technology to the future of wireless broadband, and the battle between next generation technology providers is being fought between Qualcomm and Flarion on one hand, and Qualcomm and IP Wireless on the other.
The claim made by Flarion is that if you use normal cellphone frequencies, but add orthogonal frequency division multiplexing technology to it, you can get an order of magnitude more users per cell, and more data per user. Finland seems to have bought the idea: the first Flash-OFDM network contract has been awarded.
It could be the first domino.
Europe has been playing with Flarion technology for a couple of years. Trials have been set up – like the T-Mobile experiment in The Hague last year. And more significantly, there have been rumours of trials in Eastern Europe – countries like Lithuania and Estonia.
Traditionally, Finland has been a pioneer of high speed data, and those countries take their cue for technology from there; and the buzz in the cellular world is that several Governments in former Eastern Bloc territories will now follow suit and buy Flash-OFDM.
The Finnish contract is for re-using the old analogue phone frequencies. The same 450 MHz band is coming up for re-assignment in many European countries, and the front runners there, as in Finland, will be Qualcomm’s CDMA technology.
Qualcomm isn’t going to take that lying down. It’s been trying to lobby European and Eastern European and Middle Eastern comms authorities for a while – unsuccessfully, so far.
A couple of contracts will go to Qualcomm – because it owns majority shares in the network providers there. But this is a major setback for its plan to win back the geography it lost when GSM was invented.
Official details of the announcement include optimistic pronouncements from Flarion, but nothing about what really matters: the need for the Flarion Flash-OFDM technology to be a standard.
The reason for that, say sources in the IEEE, is simple: the standard was supposed to be announced by both the ITU and the IEEE. But the 802.20 process is stalled, and nobody who knows what is going on inside the IEEE doubts that this is because Qualcomm is lobbying fiercely, using “patriotic” arguments.
The result is that in a sense, Qualcomm will win: the ITU will adopt the Flarion technology, and the IEEE will delay its announcement – possibly for months, even years.
That will make the matter look as if it is Europe against America. That in turn could hold up the standardisation process even longer; American technology companies don’t all worship at the CDMA altar, and many of them are making fortunes out of GSM. But Congress is full of people who do not understand this. And Qualcomm lobbyists will not fail to exploit this.
The losers, of course, will be the mobile networks. They need this sort of technology if they are to survive the avalanche of ideas like BT Fusion. Fusion has gone off half-cocked, perhaps; but the idea will be refined, and not only by BT and Vodafone.
What the operators of the world need is a technology that gives them data speeds and capacities, sufficient to match what can be done with technology like WiFi and WiMAX. So Qualcomm may not, in fact, make itself too many friends by forcing people to choose between CDMA and WiFi, when their tests seem to show that there is a viable alternative.
Guy Kewney has been writing on technology for longer than most. He runs NewsWireless.net as well as writing for many including VNU.
24 June, 2005
Ofcom: A New Regulatory Approach For Fixed Telecoms
UK Super-regulator Ofcom have today published details of a new regulatory approach for the UK’s fixed line telecommunications market.
We think this information is significant enough to be reproduced without editing.
A new regulatory approach for fixed telecommunications
Ofcom today published details of a new regulatory approach for the UK’s fixed line telecommunications market.
Ofcom has concluded that a new approach is necessary for the longer term, based on real equality of access to those parts of the fixed telecoms network which BT’s competitors cannot fairly replicate.
This new approach to regulation has six objectives:
1. to drive down the price of calls, connections and services for consumers and businesses;
2. to support more innovation through the growth of competitive products and services, such as faster broadband, television and voice over the internet and video-on-demand, from a range of credible companies;
3. to provide regulatory certainty for providers and investors so that they commit to developing, marketing and extending these products and services for UK consumers and businesses;
4. to re-focus regulation where it is truly needed, with swifter remedies to tackle anti-competitive behaviour and a structure which delivers equivalence to a timetable with real penalties and incentives;
5. to remove regulation wherever competition is effective and the effect of open markets – rather than regulatory intervention – ensures the delivery of choice, value and quality for consumers; and
6. ensure the necessary level of consumer protection through a combination of codes, sanctions and effective consumer information.
Ofcom Chairman David Currie said: “We believe these proposals have the potential to encourage more sustainable competition, more services, lower prices and greater consumer choice.”
Ofcom Chief Executive Stephen Carter said: “Effective regulation for the telecommunications industry needs to be forward looking, needs to encourage competition in the right places and needs to deliver tangible benefits for customers.”
He added: “These proposals are substantially different to traditional telecommunications regulation. They demand significant changes in key areas, and recognise that in other areas regulation can be rolled back.”
Proposed Undertakings
On Tuesday 21 June the Board of BT Group plc agreed in principle to offer to the Ofcom Board legally binding undertakings in lieu of a reference under the Enterprise Act. On Wednesday 22 June 2005 the Ofcom Board accepted this offer.
The proposed undertakings commit the company to substantive changes in organisation and behaviour; full detail of the proposed undertakings will be published on 30 June 2005.
A more detailed Ofcom Statement can be found online at www.ofcom.org.uk/consult/condocs/telecoms_p2/statement/
This news release should be read in conjunction with that statement. The full undertakings – which will be subject to final consultation – will be published on 30 June, together with a number of other proposals relevant to securing greater competition in the fixed line market, the details of which follow later in this news release.
1. Enforceability. The final undertakings to be offered by the Board of BT Group plc will be in lieu of a reference to the Competition Commission under Section 155(1) of the Enterprise Act 2002. They will be legally binding and enforceable, and will mean that:
  - in the event of a breach, Ofcom could take the matter to the High Court. The Board of BT Group plc would then be responsible for ensuring compliance with the order of the Court;
  - third-parties affected by a breach could also seek damages via the Court to recover losses incurred; and
  - these undertakings will sit alongside Ofcom’s existing competition and regulatory power.
Ofcom will publish the final undertakings for a six week consultation on 30 June 2005.
1. Branding and identity. The proposed undertakings offered by BT will stipulate the setting up of a new – and operationally separate – business unit, provisionally entitled Access Services, but with a distinct new brand and identity to be devised in the coming weeks. The new business unit will be staffed by around 30,000 employees presently responsible for the operation and development of BT’s local access networks. It will have:
  - separate physical locations for management teams;
  - separate bonus schemes; whilst the new business unit’s staff will remain BT Group plc employees, their long-term incentive plans will be changed to a new scheme which reflects the objectives of the new business unit, not those of the BT Group plc; and
  - over time, new branding on uniforms and vehicles which emphasises its operational separation from BT Group plc.
  - given the limited size of the market in Northern Ireland (and, as a consequence, BT’s current operational structure in Northern Ireland), BT has proposed – and Ofcom has accepted – that the three operational changes above will not apply to Northern Ireland. However, all other aspects of the proposed undertakings will apply equally across the whole of the UK; and
  - separate operating and trading systems.
2. Product equivalence. The new business unit will be required, through a set of formal rules on governance and separation, to support all providers’ retail activities (including those of BT Retail) on a precisely equivalent basis, which Ofcom terms “Equivalence of Input”. Equivalence of Input will mean that all providers will benefit from:
  - the same products, with equal opportunity to contribute to the development of new products;
  - the same prices, offered to all providers equally; and
  - the same processes, to ensure all providers are able to order, install, maintain and migrate connections for their customers on equal terms.
3. Products and services. The new business unit will offer a universally available product and service set:
  - Local Loop Unbundling (LLU) products, including fully unbundled loops (where a provider takes full responsibility for all of the customer’s voice and broadband services) and shared loops (where BT Retail continues to provide voice services and another provider is responsible for broadband).
  - All forms of Wholesale Line Rental (WLR), where a provider takes responsibility for all voice services and provides a single bill for both line rental and calls.
  - Backhaul products, which are used to connect the local access network to the core network. Some providers have built out their own backhaul networks; however many others are dependent on BT for wholesale backhaul services.
Equivalence of Input will also apply to IPStream – BT’s wholesale internet products used by many Internet Service Providers (ISPs) to provide broadband connections for their customers.
Detail of the timescales under which Equivalence of Input will apply to these services are set out in the accompanying Statement, which can be found online at;
www.ofcom.org.uk/consult/condocs/telecoms_p2/statement/
1. Next Generation Networks. The proposed undertakings will also set out a number of clear principles which BT Group plc should follow in the design, procurement and build of its next generation 21st Century Network. These principles will help ensure that other providers who will depend upon interconnection with BT’s 21CN do not suffer competitive disadvantage.
2. Board and governance. BT Group plc and the new business unit’s compliance with the proposed undertakings will be monitored by a new Equality of Access Board (EAB), which will also oversee the delivery of other legacy regulated products not directly delivered by the new business unit. The proposed undertakings from the Board of BT Group plc require BT Group plc to act swiftly upon the recommendations of the EAB.
  - The EAB will be a compliance Board, not an operating management Board;
  - The EAB will be chaired by Carl Symon, a Non-Executive Director on the Board of BT Group plc, with four other members, three of whom will be independent of BT Group plc and will be appointed in consultation with Ofcom;
  - The EAB will meet between six and ten times during the first year of operation;
  - The EAB will produce a regular summary report of its activities, which will be published; and
  - The EAB will have extensive powers to seek access to information from wherever in BT Group plc it deems necessary to do its work.
Ofcom Chief Executive Stephen Carter said: “The Ofcom Board proposes to accept BT Group plc’s proposed undertakings on the critical assumption that BT Group plc does not merely deliver the letter of the undertakings, but also the spirit.”
Other regulatory policy initiatives
Ofcom has also been developing a series of regulatory policy initiatives under its sectoral powers which, in their impact on the competitive market, will complement the proposed Enterprise Act undertakings offered by BT Group plc.
Cost of capital Separately, Ofcom has today also published a further consultation document on the Weighted Average Cost of Capital it will apply in assessing the rate of return on BT’s regulated products.
The consultation document can be found online at www.ofcom.org.uk/consult/condocs/cost_capital2/
Establishing the relationship between risk and return is an important aspect of Ofcom’s work. The more high-risk a company’s investment, particularly in terms of the volatility of returns compared to the volatility of returns on equity investments generally, the more expensive it becomes to raise capital in the markets, as investors expect a higher rate of return to acknowledge the degree of risk involved.
Where Ofcom is required to set a limit on the price a company can charge for its regulated products and services, it is important that those limits allow the company to make enough of a return on its investments to reflect the costs it incurs in raising capital.
In line with its preliminary consultation, Ofcom will propose separate levels for the traditional copper access network which differ from the overall cost of capital for BT Group as a whole. Ofcom believes that this approach will provide a fairer pricing regime for competitors using BT’s access network whilst allowing BT an appropriately higher return on higher-risk investments.
In the coming weeks Ofcom will also publish four further documents. These are:
Undue Discrimination Guidelines Ofcom has imposed regulation on some companies requiring them not to discriminate unduly to prevent then from using their dominance to the detriment of competition and consumers.
Ofcom is reviewing the guidelines that describe how it will investigate potential cases of undue discrimination. The present approach was designed by Ofcom’s predecessor Oftel before the Communications Act 2003 came into effect. The new approach proposed in the consultation, to be published on 30 June, will tighten the requirements and in Ofcom’s view will help increase effective competition.
The consultation will also include, by way of illustration, a number of examples of the kind of behaviour which may lead to undue discrimination. Those examples are included to help foster understanding of the new approach.
Wholesale Broadband BT Group plc has today announced that it will cut the price for full LLU by 24% per cent from £105 to £80 per year, with effect from August. BT Group plc has also committed to deliver stability on IPStream pricing until there are 1.5 million unbundled lines in the UK to encourage competition.
Ofcom believes that these voluntary measures from BT Group plc will help to stimulate greater competition in broadband markets by providing reassurance for LLU operators investing in deep level infrastructure.
Ofcom welcomes these initiatives from BT. It will publish a short statement on 30 June outlining its future plans for regulation of Wholesale Broadband. Ofcom is intent on fostering competition in the LLU market and will be quick to use its regulatory powers if required.
Next Generation Networks Ofcom will consult on the detailed practical steps to ensure that the development and deployment of BT Group plc’s Next Generation Network – 21CN – offers all providers the same products, prices and processes on equal terms and does not inhibit reasonable developments by alternative network operators.
The consultation, also to be published on 30 June 2005, will propose that BT Group plc should not simply inform its competitors what it is doing, but instead share details of deployment and interconnection with its competitors via a genuinely cooperative new NGN forum.
Universal Service Obligation Ofcom will consult on the outcome of its analysis of the Universal Service Obligation – the statutory safeguards which provide important citizen and consumer protection measures, including tariffs for people on low incomes, obligations to install new lines upon request and commitments to provide and maintain the public payphone service. The consultation will be published on 30 June 2005.
Deregulatory measures Ofcom is seeking to withdraw from the regulation of competitive markets wherever feasible and appropriate. Ofcom has previously consulted on deregulating in two narrowband wholesale markets. In July 2005 Ofcom intends to consult on possible deregulation in the leased lines and large business markets.
Ends.
23 June, 2005

A new regulatory approach for fixed telecommunications

Proposed Undertakings

Other regulatory policy initiatives