U.K. Regulator Claims Internet Priced Competitively

As Oftel reports that British consumers pay some of the lowest prices in Europe, service is so poor that one report claims 53 percent of business ISPs in the U.K. are failing to meet their service level agreements.

by John Lewell of internetnews.com [December 7, 2000]

The Office of Telecommunications (Oftel), the official U.K. telecoms watchdog, has issued a report that says British consumers are continuing to benefit from some of the lowest prices in Europe for telephone and Internet access.

Recently accused of complacency by Internet industry leaders, Oftel now insists that consumers in the U.K. enjoy services that are comparable to those in the U.S., including the cheapest unmetered Internet access for businesses in Europe. Director General of Telecommunications David Edmonds said the survey shows that compared to many other countries, U.K. prices are low, and continue to fall.

"S" stands for "service"
However, he made no mention of the quality of service—or of the fact that consumers are regularly charged for calls that fail to connect them to their Internet service provider.

Oftel published its first benchmarking survey in May and has now produced a second survey based on comparisons made during August between U.K. prices and those in France, Germany, Italy (mobile only), Sweden, and the U.S. states of Ohio and California (Internet only).

"This second survey shows that U.K. consumers continue to get extremely good deals with significant price reductions, particularly for residential Internet customers," claimed Edmonds.

Edmonds insisted that the availability and price of unmetered Internet access in the U.K. is much better than it is in the rest of Europe. Only Germany has significantly lower prices than the U.K. for mobile services, and this, according to Oftel, is largely attributable to bigger handset subsidies in Germany.

There is little doubt among observers that the U.K. Internet industry has traditionally been handicapped by not having had unmetered access until recently. Even now, just weeks after AOL's announcement of a low-cost unmetered deal, only a minority of U.K. users have an unmetered service.

Other reports
For example, according to free ISP tracking site Net 4 Nowt, CompuServe is only now beginning to offer trial unmetered services—and may not decide what type of service to offer for another two months.

A recent report by Iowatch (a company that handles business Internet emergencies) found that 53 percent of business ISPs in the U.K. are failing to meet their service level agreements.

As for broadband access, the U.K. lags far behind the United States. There have been more delays recently in local loop unbundling, and companies such as chello which have pan-European broadband networks are not yet established in the U.K.

By looking at prices alone, Oftel may be seen (in medical terms) as failing to treat the whole patient.

—End