2. BT's SurfTime Product Overview
3. Principles of Interconnect Cost Calculation
4. Design Issues/Interconnection Arrangements
Meeting Agenda List of Attendees
OIF4 was a follow up to the last OIF meeting, which was a workshop on Internet access pricing. On 7 December 1999 BT announced they would be launching a new retail pricing package for Internet access called BT SurfTime. OIF4 meeting had been called at short notice to ensure that the industry were able to communicate their needs to BT for the appropriate interconnect products to be made available.
This meeting was concerned with the requirement on BT to introduce appropriate wholesale products when they launch retail products. The meeting would not be considering NTS issues, other methods of Internet access, previous BT products, nor any complaints already received by Oftel.
2 BT's SurfTime Product Overview - Graham Lamb (BT)
Graham gave a brief overview of the SurfTime product which BT announced on 7 Dec 1999 and then introduced three of his colleagues who would be giving detailed presentation on retail elements, IP configuration and services & solutions.
He stated that BT were willing to cooperate with OLOs/ISPs to offer them the most appropriate interconnect products.
2.1 Retail Elements - John Strutt (BT) - Click here to download the presentation (PPT) (86kb)
It was pointed out that the new SurfTime product is a development independent of NTS interconnects, with both types of access arrangement able to exist at the same time.
The SurfTime products will be available to residential and business users and do not restrict the user to one ISP. ISPs using the new BT products will be assigned numbers in the 0844 range. Any BT subscriber could call an ISP on their 0844 number and pay 2ppm (day) or 1ppm (other times). The subscriber could also opt-in to one of the unmetered packages, for which they would be able to make unlimited calls to their ISP during designated times (according to the option they have chosen). Calls outside the designated time would be charged at the pay-as-you-go rates. The subscription is on a per line basis for voice lines, or on a per channel basis for ISDN.
Target launch date for the product is April 2000, but launch may have to be phased so BT can carefully monitor the effect of the new service on their network. The phased rollout could be geographical or it could be based on the different options, eg pay-as-you-go launched first, then one of the unmetered packages etc. BT confirmed that the prices quoted included VAT.
2.2 IP Configuration/Services & Solutions - David Hughes/Nigel Scott (BT) - Click here to download the presentation (PPT) (86kb)
David Hughes overviewed BT's current dial IP architecture and explained BT's plans to rollout modems to local exchanges. This new arrangement requires BT to introduce new interconnect products. David identified the different interconnect points available to ISPs, and discussed others which may be available in the future, however for some of the suggested solutions to be practical an industry agreed interface would be required. This was particularly the case for IP interconnect at BT's modems which use a proprietary tunneling protocol.
Nigel Scott identify the two costing options available with BT SurfTime: pay-as-you-go and unlimited. The basic pricing principle for this product is that BT sets the retail price and receives a flat fee per package for outbound traffic. It was stated that this situation is reciprocated for inbound traffic where the retail price would be set by the originating operator. The basic concept was that the interconnect charging would be based on a flat fee when the customer was paying a flat fee, and the pay-as-you-go fee when the customer was paying per minute.
Comments
BT were asked when the release date for the wholesale product would be and BT responded by saying that wholesale and retail products would be available at the same time (Spring 2000).
Questions were asked regarding the areas in which this product would initially be roll out and whether BT will launch in areas where modems are currently not collocated. This issue is still being discussed by BT although at the present time the intention is to roll out only where modems are installed.
OLOs wished to know if they would be allowed to collocate their equipment in BT's local exchanges. BT stated that this would not be available when the retail product is launched, though this may be available in the future (as may be the case for ADSL). It was pointed out that OLOs and ISPs do not necessarily need a physical presence at local exchanges as they could purchase interconnect extension circuits.
There was also concern that unless OLOs and ISPs had the option of using their own modems then BT could dominate the modem purchasing market. It was pointed out that an unmetered DLE interconnect product was available which would allow OLOs and ISPs to use their own modems.
BT were encouraged to produce details of their rollout and pricing plans as soon as possible as OLOs and ISPs need them to make decisions about building out their networks and whether price breaks would be available.
There was general concern that the wholesale offerings may be too limited, as it appears that for unmetered access BT would be setting the retail price. Many operators were confused how BT could claim to be getting the best price for customers without being able to offer even indicative interconnection prices. BT stated that the retail price was based on a BT end-to-end solution and the assumption was that other operators could match or possibly better this situation, however BT were not in a position to release the interconnection costings used. BT were asked to make these costs available as soon as possible so that other operators could identify suitable wholesale products.
3. Costing Principles for Unmetered Interconnection - Peter Culham (Oftel) - Click here to download the presentation (PPT) (155kb)
Peter Culham outlined the basic principles that Oftel would follow if it were asked to determine prices for an unmetered interconnect product. Based on these principles three possible costing methods were identified although it was made clear that at the present time Oftel had no firm view on the actual method that would be used. The purpose of this forum is to bring the industry together to promote debate and invite comments.
Comments
A general discussion took place about various methods for calculating unmetered interconnection charges. Some operators liked Peter Culham's first option where the expected usage per user was used as a base line determiner as it had clear synergy with existing products. Other operators felt that this was not an appropriate costing model for unmetered access as it was based on an underlying assumption about per minute usage.
4. Design Issues/Interconnect Arrangements
An open debate took place on the retail product offered by BT and what form the wholesale product should take, the main points raised are highlighted below.
It was claimed that it is anti-competitive for BT to set and control the retail price for unmetered products.
Other operators generally felt that the SurfTime product would be giving BT a first mover advantage as no information about an unmetered wholesale product was on the table. It was suggested that, although tight, there was enough time for other operators to negotiate a wholesale product with BT such that retail and wholesale products would be available by Spring 2000. Other operators accepted this point but were unhappy as the time scale was extremely tight and so far BT have not provided the basic information that would be required to begin negotiations.
BT stated that in order to manage take-up and usage of the service they were planning on introducing timeouts on all their modem ports which would drop the line after a fixed time online to prevent their network from becoming overloaded. OLOs and ISPs were concerned that BT was planning on making these restrictions for their interconnect products too. Oftel stated that this was not an unreasonable demand in order to ensure network integrity, and furthermore that BT needed to ensure the new service did not affect existing subscribers to the BT network, in particular 999 access.
OLOs and ISPs suggested that customers saw the product as a potential leased line replacement. It was stated that this not what the product was intended to be and that if customers used the service longer than BT had assumed then the price for the product would need to be reviewed.
All of these areas are points for further discussion between BT and the industry.
It was agreed that an industry group needed to be established that would enable the industry to decide what interconnect products they required from BT, rather than each operator to approach BT individually. This group would need to identify appropriate wholesale products and consider the most appropriate charging methodology. It was suggested that, in order to meet tight deadlines, the industry should agree a set of interconnect products with BT by mid January 2000.
Clive Feather of Demon offered to chair the charging group and suggested that, given the time scales, a meeting be arranged before Christmas. BT offered to make arrangements and assist in the work of these groups, and asked for any requirements to be sent to Graham Lamb or Nigel Scott.
The first meeting was arranged for Thurs 23 Dec 1999 (AM), for details of this meeting and future meetings email Clive Feather. [note an invitation to this event was forwarded to the OIF mailing list]
