Telepocalypse

Big Telco, Bad Telco

I promise to stop soon, really. But one last BT article. Please?

The proposed OFCOM regulatory regime for BT of "equivalence" won't work. The concept is that the retail arm of BT will be treated the same as any other outlet by the wholesale arm that runs the network.

Chinese walls work in the financial industry -- for example between equity research and brokerage -- because what you're trying to prevent is time-sensitive operational data leaking across. You're trying to keep a secret. The CEO probably doesn't know or care about most of the secrets, and doesn't have to file half in her left brain and half in her right brain.

Telecom is about sinking capital and then trying to wring out the value of the bits that pass over the network. There aren't many operational secrets. So when BT Retail investment project A lands on the CEO's desk, and BT Wholesale project B gets dumped on top for approval, they can't be considered separately. The retail strategy will always be considered in the light of the wholesale one and vice versa. The retail arm will always have a head start on outsiders.

This approach from OFCOM will only serve to highlight BT's world-class abilities at regulatory capture. Real structural separation is needed. This may even go further than a two-way split. Why not create a scheme by which individuals or communities can effectively recapture control of their loops and exchanges with reasonable recompense to the BT shareholders?