21712 - SCTE Broadband Nov2022 COMPLETE v1

73 Vol. 44 No. 4 - November 2022 Issue from the archive that dials a three-digit code, pauses for a connection to Mercury, and then identifies the customer with a 10-digit number before proceeding to connect the call. Equal access The duopoly review provides for the introduction of equal access to competing long-distance operators, which could simplify that rigmarole to a greater or lesser extent. Customers would not have to buy a special phone, nor would they be forced to choose equal access. Customers could either choose a long-distance carrier for each call or opt to have all their long-distance calls routed by a certain company. This would seem, on the face of it, to offer a serious threat to cable companies that also want to offer telecommunications services. Cost savings on long- distance calls are the major attraction, and equal access could provide that without the need for a new phone line. But not necessarily. "The relationship between Mercury, equal access and cable is complex," says Aitken. Equal access will be provided only when a long- distance company requests BT to do so, and then only when the local switch is technically able to support it. So, if cable operators are successful in running local phone services with Mercury as the long-distance operator, Mercury might leave them a clear run by not requesting BT to provide equal access at its local switch. In any case, Aitken observes, there is a limited product range available through equal access: basic long-distance voice telephony. "Cable operators can deliver a full package of products in association with Mercury," he says. And equal access margins are low, especially since BT has to be paid to deliver the call into Mercury's network. A cable TV connection makes it more possible to have end- toend calling without BT — with consequently higher margins. Cable's bright telephony future What is the outlook for cable operators? One of the longest-established in the phone business is Cable Telecom, the telephony unit of the Cable Corp., with an 85 percent built, 110,000-home franchise — Windsor Television — running west from London's Heathrow Airport. The company also has two neighbouring franchises with a total of 169,000 homes. Cable Telecom has only 1,700 lines so far (of which 400 are residential) plus another 400 orders. The network is being overlaid on the existing cable TV system. "That's expensive," says Cable Telecom's General Manager Alan Hindley. "In our next franchise, Hillingdon, we'll put telecommunications and cable TV in together." The extra cost in capital expenditure will be 20 percent, he calculated, but on the basis of the existing business, it should double income. "Some 60-70 percent of cable subscribers take telephony when we offer it," he notes, "and when we offer telecommunications with cable, the penetration is 5-6 percent higher. I'm convinced that most areas of the country can support a profitable telephony business based on cable." Apart from the local loop, a company such as Cable Telecom could offer point-to-point leased lines, data networks, access circuits and other services. But it would not offer value-added products, suggests Hindley, such as electronic mail, voice messaging, security: "We're not big enough." Less enthusiastic considerations David Gillick, communications and policy regulations manager at PA Consulting in London is less confident about the prospects, though he concedes that the United Kingdom has the world's most receptive climate for local competition." There are "limited" opportunities for profitable competition with BT, he warns: "Profitable entertainment customers are not always profitable telephony customers, and they may be geographically separate." Another provision in the duopoly review may reduce the profit-making opportunities stil l further, says Mearing-Smith. Amendments to BT's licence will provide for revised access charges for other operators delivering their customer's calls over its network. "BT argues that it loses money on its local network," he says. But BT is inefficient, and why should we compensate for that?" The charges will be fixed by negotiation between BT and Mercury, but they might never be revealed — even to Oftel. Cable operators won't know what terms Mercury can offer them to deliver calls nationally and internationally until those negotiations are over. "We depend on Mercury for the terms; if Mercury is worse off, it could make us worse off," Mearing-Smith says. "Some argue that if BT gets more for its local connection, cable operators could also get more." It's an uncertainty the industry could do without. "But telephony is a very good market," says Mearing-Smith, "and advances in technology mean residential telephony is now economic." that dials a three-digit code, pau es for a connection to Mercury, and then identifies the customer with a 10-digit number before proceeding to connect the call. Equal a ce s The du poly review provides for the introduction of equ l access to competing long-distance operators, which could simplify that rigmarole to a greater or lesser extent. Customers would not have to buy a special phone, nor would they be forced to choos equ l access. Customers could either choose a long-distance carrier for each call or op to have all their long-distance calls routed by a certain company. This would seem, on the face of i , t offer a serious threat to cable companies th t also want t offer t leco munication services. Co t savings on long- distance calls are the major attraction, and equ l access could provide that without the need for a new phone line. But not n cessarily. "Th relationship between Mercury, equ l access and cable is complex," says Aitken. Equ l access will be provi ed only when a long- distance company reque ts BT to do so, and then only when the local switch is technically able to suppor it. So, if cable operators are successful in run ing local phone services with Mercury as the long-distance operator, Mercury might leave them a clear run by not requesting BT to provid equ l access a its local switch. In any case, Aitken observes, th re is a limited product range v ilable through equ l access: basic long-distance voic t lephony. "Cable operators can deliver a full package of products in association with Mercury," he says. And equ l access margins are low, especially since BT has to be paid to deliver the call into Mercury's network. A cable TV connection makes it more possible to hav end- toend calling without BT — with consequently higher margins. Cable's brigh t lephony f ture What is the outlook for cable operators? One of the longest-established in the phone business is Cable T lecom, th t lephony unit of the Cable Corp., with an 85 percent built, 11 , 00-home franchise — Windsor T levision — run ing west from London's Heathrow Airport. The company also has two neighbouring franchi es with a otal of 169, 00 homes. Cable T lecom has only 1,700 line so far (of which 400 are residential) plus another 400 orders. The network is being overlaid on th existing cable TV ystem. "That's expensive," says Cable T lecom's G neral M nager Alan Hindley. "In our next franchise, Hillingdon, we'll put t leco munications and cable TV in together." Th extra cost in capital expenditure will be 20 percent, he calculated, but on the ba is of th existing business, it shoul double income. "Some 60-70 percent of cable subscribers take t lephony when we offer it," he notes, "and when we offer t leco munications with cable, the p netration is 5-6 percent higher. I'm convinced that most areas of the country can support a profitabl t lephony business based on cable." Apart from the local loop, a company such as Cable T lecom could offer point-to-point leased lines, d ta networks, access ircuits and other services. Bu it would n t offer value-ad ed product , sugge ts Hindley, such as lectronic mail, voice messaging, security: "W 're not big enough." Le s enthusiasti considerations David Gillick, co munications and policy regulations m nager at PA Consulting in London is less confident about the prospects, thoug he conc des that the United Kingdom has the world's most r ceptive climate for local competition." Th re are "limited" opportunities for profitable competition with BT, he warns: "Profitabl entertainment customers are not always profitable t lephony customers, and they may be geographically sep rate." Another provision in the du poly review may reduce the profit-making opportunities stil l further, says Mearing-Smith. Amendments to BT's licence will provide for revised access charges for other operators delivering their customer's calls over its network. "BT argues tha it lo es money on its local network," he says. But BT is inefficient, and why should we compensate for that?" The charges will be fixed by negotiation between BT and Mercury, but they might n ver be r vealed — ven to Oftel. Cable operators won't kno what terms Mercury can offer them to deliver calls nationally and internationally un il those negotiations are over. "We d pend on Mercury for th terms; if Mercury is worse off, it could make us worse off," Mearing-Smith says. "Some argue that if BT gets more for its local connection, cable operators could also get more." It's an uncertainty the industry coul do without. "But t lephony is a very good market," says Mearing-Smith, "and advances in techn logy mean residential t lephony is now ec nomic." At the moment, such customers must buy a special phone that dials a three-digit code, pauses for a connection to Mercury, and then identifies the customer with a 10-digit number before proceeding to connect the call.