British Telecom

Fucking, fucking, fucking bastards.

Where to begin?

British Telecom are unquestionably one of the most irresponsible, greedy and inefficient companies in the UK. Their entire corporate strategy (if that's the right word) since their botched privatisation has been designed purely to exploit their monopoly position in the telecoms market, lining the pockets of their board and pleasing their shareholders while doing everything to prevent their domestic and business customers (i.e. almost everybody) from having the benefit of a fairly priced and competently run voice and data service. They have the gall to claim that they are forward-thinking, and yet they have easily done more to stifle technological progress in the UK and Europe at large than any other company. Here are just a few of the reasons that every single person in the UK hates them and would love to see them bear the brunt of effective industry regulation.

Due to British Telecom having an effective monopoly on telecommunications traffic in the UK (due to their ownership of most of the infrastructure), most of their tactics have involved exploiting this in the ways that they can then claim would be too expensive and complex to rectify. A case in point is the metering of phone calls. Every voice and data landline call is metered, with the rate dependent on the time of day and the distance. Oh, and every call, regardless of any other factor, will cost a minimum of 5p. Only very, very recently have BT offered other schemes of payment, and then these were initially only offered under terms and conditions extreme enough to make the 'offer' almost pointless. It costs them more to meter calls (and therefore send out itemised phone bills the size and density of housebricks) than it would to run the entire phone network unmetered. By way of example as to the kind of money they could extort from you under this system, even at "off-peak" rate, you would be paying approximately $1 an hour for dialup. (Dialup, may I add, that is statistically likely to be over a totally decrepit, multiplexed bit of copper that would be hard pressed to provide 20kbps.)

But it's their record on broadband provision that has made British Telecom the shame of the country. BT offer a service called BT OpenWorld (which, as per usual, comes with a stack of punitive restrictions on usage) that initally cost a ludicrous £40 PER MONTH. British Telecom dragged their feet for many, many months before it was even possible, let alone economically viable, for other providers to offer ADSL over their network. There are now (2003) some more choices available to the consumer, that is, provided you live in an area that British Telecom have deemed 'suitable' to have had its local exchange upgraded. Suitability is measured by the setting of a 'trigger level', which is supposed to represent the number of people in an area that need to be interested in subscribing to a broadband service for it to be worth their investment (independent researchers have estimated that BT's figures are inflated by as much as eight times the actual number of customers needed to break even). They still have only done (at a massively optimistic estimate) about two thirds of the population. Their high prices and extreme inertia and inefficiency still ward off most casual internet users however.

While they're not systematically robbing the British public, BT are making enemies elsewhere. Recently, BT have claimed that they own a US patent on (get this) hyperlinks. They've filed a suit against Prodigy and 16 other US ISPs to try and get them to pay fees for using their technology. WTF? Note that they're not trying to sue AOL. Genius.

BT also spend vast amounts of money on advertising campaigns, which do nothing except highlight the extortionate cost of their services even after so-called 'discounts'. Recently they've been making a great amount of noise about their (long overdue) broadband services, and have even had the bare-faced cheek to whine that the government should be giving them handouts because it's not their fault that they've stuck their heads in the sand for years.

The clowns we can thank for this mess are Sir Peter Bonfield and Sir Ian Vallance, who have since left with fat payoffs. Vallance addressed a crowd of telecommunications industry leaders and proclaimed that the internet was not yet widely used in business. In 1999. Bonfield once remarked, "Every Web site saves a tree and every email saves a twig." Yes, and your company then ploughs through a brace of redwoods just to print out my quarterly bill, you imbecile. His justification for his company crippling uptake of the internet in the UK for the last 3 years? "If the world were a village of 100 people, only 14 would have a phone and only one would be online." With a pillock like this at the controls, it's no wonder that the UK slipped behind even France (France!) in e-commerce success.

Oh, and I think BT turned out bad not because privatisation is bad per se, but because the Tories' particular brand of it was so spectacularly corrupt and half-cocked. See also Railtrack and the BBC for other success stories.

Just remember - never ask a British Telecon employee when they are going to actually introduce that beautiful thing known as DSL. There's simply no need, as the answer is always In three month's time.
They've been doing this for nearly two years now, and I'm starting to suspect that the company has scoured the Universities to snap up the finest Mornington Crescent players in the country.

The real answer to the DSL question is, of course, about fifteen minutes after the local loop is unbundled, in July 2001. This is the magic date at which other companies are allowed to supply said service, undermining the bastard's obscene monopoly.

Needless to say, I fucking hate them.

Footnote: Although BT may, just, possibly, perhaps maybe let a couple of people get DSL installed before July 2001 (as a special favour), it's still restricted to 512kb down/256kb up, and *you're not allowed to run a server on it*. Fucking genius.

DSL Update (18th July 2000) from The Register;

"According to sources close to BT's plans, ADSL will be rolled out for end users early next year at a price of between £610 and £840 per annum, with the contention rate running at ratios of between 20:1 to 50:1"
What? Surely not! BT delaying DSL again? Goodness me! I am surprised. That'll be nearly three years late then!

Possibly the best rebuff to all the arguments in favour of privatisation. (Oh, wait, it has been pointed out to me by StrawberryFrog that the railways are probably up there too. My mistake.)

Like other companies with 'British' in the title (British Airways, British Rail, British Gas etc), British Telecom started off as a nationalised, or state-owned, company with a monopoly. However, with the New Right of Margaret Thatcher and John Major, nationalised industry was declared a Very Bad Thing and privatisation commenced.

It was argued that this would increase competition resulting in level playing fields, lower prices, higher quality services blah blah blah. Removal of monopoly = competition = good.

For some bizarre reason, though, British Telecom was allowed to keep its monopoly, sort of, maybe. Something to do with it owning the physical means through which telephone calls are transmitted. I'm not sure. But the point is, BT appears to be the only privatised company which has managed to hang on to its monopoly (yes, I know other companies exist, but a free market it is not), with resulting high prices, as the competition is laughable.

BT Group plc. is the listed holding company for British Telecommunications plc., a wholly-owned subsidiary. This subsidiary's activities are principally comprised of telecommunications services for local, long distance and international calls throughout the United Kingdom, along with internet services and IT solutions, a new venture. BT is in the peculiar, and somewhat worrying position, of owning its own copper wire, which it rents out to its competitors. It is, however, regulated by Oftel.

British Telecommunications plc. is principally composed of:

• BT Ignite, BT's broadband supplier to large corporations, operating internationally. It currently serves 70 of the FTSE 100 companies, 9 out of 10 of the top high street retailers, all of the top 10 retail banks, six of the top 10 insurance companies, eight of the top ten pensions companies and 7 of the top 10 construction companies. This subsidiary alone employs 17,000 skilled workers.



• BT openworld, BT's mass-market ISP for broadband and dial-up internet connections. Formerly, the dial-up service was called BT Internet, but it was amalgamated to have the same name as the broadband service. For dial-up customers, an 'unmetered' service is offered, which has the unfortunate drawback of cutting off every 2 hours. Broadband users have the delights of ADSL, but download rates are capped, along with upload rates, and running a server is not allowed.



• BT Retail, comprising BT's high street shops, the supply of BT products to home users, and the advertisement of other BT services. It is this division which is responsible for the mind-numbing use of ET in advertising. BT's shops have suffered, and are being cut back.



• BT Wholesale, the division responsible for the running of BT's telecom networks, and selling out lines to the company's competitors. It is here that Oftel should be regulating the company most, but it seems that the conflict of interests has been largely ignored, and other operators are finding it increasingly difficult to continue business



• BT Exact, a wholly-owned subsidiary responsible for Research and Development work, primarily for other BT companies and their partners.



• BT Affinitis, a group of self-contained business offerings to BT which could, in theory, be supplied by an external company. This is unlikely, however, and BT seems to be planning to offer them to other companies.

In the financial year 1st April 2000 - 31st March 2001, BT's turnover was £20,427 million, with profit before goodwill, amortisation, exceptional items and taxation of £2,072 million. BT states it vision as 'To be the most successful worldwide communications group.' Predictably, they intend to do this by increasing shareholder value by:

• 'seizing the many opportunities open to us in the global market'



• 'building our current business, focusing on high-growth areas'



• 'operating to the highest standards of integrity'



• 'fulfilling our responsibilities to the communities in which we operate.'

BT is one of a number of UK companies which was once nationalised, but was privatised under the Thatcher regime. It is almost unique, however, in maintaining its monopoly. For more on the questionable business practices hinted at here, see fondue's excellent writeup on British Telecom.

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Sources:

• http://www.bt.com and its related sites
• http://www.cwu.org/about/telecoms/btbusinessservices.html

British Telecom was founded early in the eighteen hundreds as an amalgamation of several private, commercial telegraph companies. It was nationalised as “Post Office Telecommunications.” At the time this made sense since the telegraph system was run in conjunction with the Post Office, i.e. a telegraph would still have to be delivered.

When the telephone system was first implemented it was under the control of the Post Office and some smaller private companies. Of these the National Telephone Company was the largest. However in about 1896 the Post Office took over almost the entire private sector. Since it was still government owned it was granted a complete monopoly on telecommunications in 1912. There were a few exception, the notable one was the city, Kingston-upon-Hull (usually just “Hull”), where the council provided the telephone service until recently (1998)when it was sold into privatisation. That said, the council are still majority shareholders.

Apart from some minor suggestions in a book by Lord Wolmer, “Post Office Reform,” which presenting a few arguments for changes to the system, there were no major re-shifts until 1964 when it was split into two departments, Telecommunications and Post. This lead to the Post Office Act of 1969 in which it became a public corporation. It had the exclusive privilege of running all the telecommunication systems in the country.

In 1980 the two departments were separated even more. Post Office Telecommunications became British Telecom. Although for approximately one year it remained part of the post office. Then, in 1981 it was finally separated from the Post Office. It became under almost direct control of the Secretary of State and another company was allowed to set up, Mercury Communications. This was the first competition the company had faced in around a century.

In July 1982 51% of British Telecom was sold as shares to investors. In 1991 the company was fully privatised when the government sold most of its shares, gaining five billion pounds and losing 25.8% of the company. However the 1984 act had also removed the company’s right to monopoly, this enabled other companies to set up .

On the 5th of march 1991 the government declared its “White Paper Competition and Choice: Telecommunications Policy. It ended the duopoly between British Telecommunications and Mercury Communications and made the policy fairer by allowing Independent companies to buy up large telecommunications capacity and sell it to business of home users. However this policy also enabled British Telecommunications to alter its prices as much as it liked.

In early April 1991 the company began a year long reorganisation known as the “Project Sovereign initiative.” The company claimed to be meeting its customer’s needs and the Project’s slogan was “The Customer is King.” The company also re-named its trading name to BT and allowed it to expand into foreign markets.

In the summer of 1994 BT and MCI Communication Corporation, which was the second largest long distance communications company in the USA combined their resources and launched a joint company named Concert Communication Services. By the end of 1996 BT and MCI were supplying services to 3,000 multinational companies and had more than $1.5 billion in contract revenue. In November 1996 a merger was announced, they planned to be merged into Concert plc.

However WorldCom also bid for MCI and BT decided to sell its shares in MCI to WorldCom. This made them $7 billion. Although there was also at this time a counter bid from GTE, that ultimately failed. BT made $2 billion profit on it’s original investment in MCI and $485 severance fee for the end of the merger.

Deals done with AT&T between 1998 and 2000 resulted in a 50:50 venture which was also named Concert. It was designed for the specific use of multinational companies. But also met the demands of smaller businesses and Individuals.

April 2000 saw the launch of BT Retail, BT Wholesale, BT Ignite, BT Wireless, and of course the ISP we all know and love, Btopenworld. They also launched, Yell, a directory for the boom of e-commerce and also Yellow pages, the directory of companies. The venture was designed to give BT a foothold in every use of telecommunications. BT sold Yell in May of the same year for £2.14 billion and launched its mobile business formally known as BT wireless as mm02 and demerged from BT so it could sell it’s shares separately.

BT is now structured so the BT Group plc is a holding company for all the esparto businesses using the BT name. Currently these are BT Retail, BT Wholesale, Btopenworld and BT Global Services. This allows each company to focus on it’s own goals and maximise it’s own profit without its money being funnelled into another less successful sector. BT does not have a monopoly anymore but still controls the largest amount of British telecommunications since it is so versatile. It sets the score for other companies to beat, and also has almost complete say of the prices, allowing it to charge whatever it wants to. For the company, this only allows more success.

This writeup is written as a response to Wertperch’s comment that there are no, non-ranting, historical factuals on this subject. Well, now there are.

Sources: Own knowledge
http://www.btplc.com/Corporateinformation/BTArchives/History.htm
www.asc.org.uk/Events/Sep03/Abstract/Hughes.htm
www.net4nowt.com/comments/967019129,80678,.shtml