Contents

Key headline statistics

Summary

Introduction & Definitions

Monitoring the Internet Access market

Dial-up Internet access

Broadband

Key Headline Statistics

Summary

• Oftel supports the Government’s aims to make the UK the best environment for e-commerce by the end of 2002;
• Oftel wants to see choice and value for money for all consumers for Internet access. This includes choice of access speed (high and low-speed access) and services offered;
• Oftel believes that competition is the most effective way of achieving these goals;
• competition is working: UK consumers now have a wide variety of tariffs for dial-up (low-speed) Internet access. These include both pay-as-you-go tariffs and unmetered packages. UK Internet access prices for residential consumers are now among the lowest in the world;
• broadband offers high-speed Internet access and a wider range of services. Different access technologies are starting to compete to deliver broadband services to consumers;
• the market for broadband services is at an early stage in the UK. Oftel is playing an active role in setting the regulatory framework for the broadband market, and is working closely with Industry to pre-empt and resolve disputes;
• broadband Internet access in the UK is beginning to make substantial progress and the pace of change is accelerating; and
• Oftel is monitoring closely the evolving Internet access market through quarterly consumer surveys in the UK and a programme of regular international benchmarking. Oftel is committed to ensuring that the success in dial-up is used as a staging post towards wider adoption of broadband Internet access.

Key events

• publication of Oftel’s 2000/01 effective competition review of dial-up Internet access: consultation period ends 30 October 2001;
• publication of report and recommendations from the Broadband Stakeholder Group (www.e-envoy.gov.uk/ecommerce/broadband/index.htm);
• ADSL-enabled end users up by more than 50% since May 2001 to 90,000 as at the end of September 2001;
• price reductions for some BT wholesale DSL products;
• launch of ‘rate adaption’ on some of BT’s wholesale DSL products to improve reach from exchange building from 3.5km to 5.5km. This increases the number of consumers able to obtain DSL services from 70% per local exchange to 90%;
• new consumer research data available showing that during August, about 6% of Internet-connected SMEs in the UK claimed to be using DSL or cable modems, and that the number of medium businesses claiming to use DSL has almost doubled since last quarter; and
• remaining 28GHz licences for broadband wireless access have been made available for purchase through auction. The licences are ‘on the table' for 12 months until October 2002 and the allocation process will commence when an operator bids for any regional licence. An auction will be triggered if demand for licences exceeds supply.

Forthcoming developments

• publication of Oftel’s final determination on dispute in relation to BT’s service level agreement (SLA) for local loop unbundling (LLU) (November 2001).

Introduction and definitions

Oftel’s aims

2.1 Oftel’s approach is to promote competition in the provision of access to the Internet and broadband services, thereby giving consumers a greater choice, better value and higher quality and spurring take up. Oftel seeks to match the level of regulation to the level of competition in the market, while continuing to protect and inform consumers where the market cannot do so.

Government initiatives

2.2 The Government’s aim is to make the UK the best place for e-commerce in the world by 2002 and to make the UK a leading knowledge economy and ecommerce nation. Major Government targets are:

• UK to have the most extensive and competitive broadband market in the G7 by 2005;
• ensure that everyone who wants the Internet has it by 2005; and
• ensure that all Government services are online by 2005.

2.3 The Office of the e-Envoy [OeE] (www.e-envoy.gov.uk) is leading the Government’s drive to get the UK online and to ensure that the country, its citizens and its businesses derive maximum benefit from the knowledge economy. A UK Online Broadband Stakeholder Group has been set up, chaired by the e-Minister, to assist the Government in the development and implementation of broadband strategy. The group published an initial summary of its recommendations
(www.e-envoy.gov.uk/ecommerce/broadband/bbsgrep_menu.htm, 25 September 2001) to drive forward the rollout of broadband services in the UK. The OeE invited comments from individuals and organisations with an interest by Friday 26 October.

Definitions

2.4 This brief summarises the key developments in the market for Internet and broadband services in the UK, and describes Oftel’s involvement in these markets. ‘Dial-up’ or ‘narrowband’ Internet access is used in this brief for access speeds up to and including 128 kilobits per second (kbps). ‘Broadband’ is used in this brief to refer to higher bandwidth, always-on services, offering data rates of 128 kbps and above.

Monitoring the Internet access market

3.1 Oftel regularly monitors the UK Internet and broadband access markets and publishes its findings to aid transparency. Oftel’s International benchmarking study takes place every six months. It compares Internet access prices in the UK with competitor countries, and has also in the past covered broadband access. Oftel’s quarterly market research surveys ask residential and SME Internet users about their use and experience of the Internet, along with consumer awareness and use of broadband technologies.

International benchmarking of prices for dial-up Internet access

3.2 The latest set of results (www.oftel.gov.uk/publications/research/2001/benc0601.htm) from Oftel’s benchmarking studies of dial-up Internet access, published in June 2001, includes the UK, France, Germany, Sweden, and the US states of Ohio and California. The results show that:

For residential dial-up users:

• the price of up to 40 hours per month dial-up Internet access in the UK for residential users, at both peak and off-peak times was the cheapest of the 5 countries considered; and
• for unmetered access, residential prices in the UK were similar to the US but much cheaper than prices in Germany. France and Sweden do not have any unmetered packages making prices for high users in these countries much more expensive.

For business dial-up users:

• there is little difference in the overall prices for business metered packages, though Germany and Sweden were slightly cheaper than in the UK; and

• prices for business unmetered packages in the UK are lower than in the US. France , Germany and Sweden do not have any unmetered packages making prices for high users in these countries much more expensive.

3.3 The study is currently being updated (for services available in August 2001) with publication expected in November 2001.

International benchmarking of prices for broadband Internet access

3.4 The most recent benchmarking report covering broadband access was published in January 2001 (based on services available as at October 2000).

3.5 Broadband price comparisons indicated that:

• in the UK, the monthly charge for residential higher bandwidth services was around £40, compared to £37 in France, £31 in Germany and £32 in the US;
• the results for business were mixed: for a basic DSL service UK prices were lower than in France but ahead of Germany and the US; however German prices rose above those in the UK for consumers requiring a minimum bandwidth in excess of 500kbps (average over both directions); and
• comparisons of wholesale services (based on a limited set of data) indicated that UK prices are similar to those in Germany and the US for a similar bandwidth service, though the range of bandwidths available was lower in the UK.

3.6 The January 2001 study was the second in what will be an ongoing series of reports which will provide international comparisons of DSL and other broadband services. Oftel has collected data for the next study (for services available in August 2001) and expects to publish the findings in November 2001.

Consumer outcomes and behaviour

3.7 The results of Oftel’s August 2001 survey show that:

For residential Internet users:

• 39% of UK households are connected to the Internet;
• the vast majority of consumers still use the traditional PC and ordinary phone line/dial-up method to access the Internet;
• 40% of Internet homes use an unmetered package – these users spend twice as long online as those using metered packages; and
• over 90% of consumers are satisfied with the overall service provided by their home ISP.

3.8 The results of Oftel’s August/September 2001 survey show that:

For small and medium business (‘SME’) Internet users:

• 61% of UK SMEs are connected to the Internet (94% medium-sized and 60% small businesses);
• the majority of small businesses use an ordinary phone line/dial-up access to connect to the Internet, whilst medium-sized businesses are more likely to use ISDN or leased lines;
• 37% of SMEs with Internet access use an unmetered package; and
• over 90% of SMEs are satisfied with the overall quality of service they receive from their ISP.

3.9 The results of Oftel’s August 2001 survey show that:

In the residential broadband market:

• approximately 1% of UK Internet homes is connecting using ADSL technology (compared with about 40% that are choosing to connect using narrowband unmetered packages); and
• 4% of households claimed to be using broadband but subscriber estimates suggest this figure is less than 1%.

In the SME broadband market:

• approximately 5% of Internet connected UK SMEs claim to be using DSL or cable modems. Medium businesses are responsible for the majority of these subscribers. However, subscriber figures suggest the figure is actually 1% of businesses.

3.10 In addition to the quarterly consumer surveys, Oftel has recently commissioned research looking at UK residential consumers’ use and perceptions of broadband Internet services, including demand for services, benefits, costs consumers are prepared to pay, driving factors and switching behaviour. Results from this research will be published in January 2002.

3.11 Oftel is also proposing to carry out an additional benchmarking exercise to establish whether, and if so, why, UK consumers are making more or less use of Internet broadband access than other countries. The results are expected to be available early next year.

Dial-up Internet access

Current technology

4.1 The UK has a vibrant dial-up (also known as ‘narrowband’) ISP market with both pay-as-you-go and unmetered packages available to consumers. Industry sources estimate that there are over 400 ISPs operating in the UK. Unlike much of the rest of Europe (including Germany and France), an offshoot of the incumbent does not dominate the competitive UK dial-up retail market. Three biggest players are Freeserve (19%) AOL (16%) and BT Internet (15%). Over 80% of online households and 63% of SMEs with Internet access use a dial-up PSTN connection to the Internet. A further 9% of households and 27% of SMEs access the Internet via a dial-up ISDN line.

Current product offerings

4.2 There are a number of dial-up Internet access packages available to both residential and business consumers. These include:

• Metered (pay-as-you-go) Subscription + cost of calls or

• Partly unmetered Subscription + free usage at certain times/for a

• Fully unmetered Subscription + unlimited free usage + no call costs

Metered

4.3 The UK pioneered the pay-as-you-go model, which has been copied by many other countries. Packages are now available which offer consumers Internet access at rates below the price of local-rate voice calls. Some packages include a monthly subscription fee in addition to the cost of calls, whereas others are ‘subscription-free’.

4.4 Subscription-free Internet access led to a rapid growth in the number of Internet users in the UK, and is likely to remain a good option for occasional or light users, and those who do not want to commit to a contract. However, the number of consumers using pay-as-you-go packages has fallen as more unmetered services have become available. In August 2001, 60% of Internet households were using metered packages to access the Internet (18% subscription-based, 42% subscription-free).

Unmetered

4.5 Unmetered packages can be fully or partly unmetered and have been available for some time. However, the availability and take-up of unmetered packages has grown significantly over the last 12 months. This is partly the result of Oftel’s directions requiring BT to make available unmetered wholesale Internet access products (called FRIACO). This has allowed more ISPs to compete in offering unmetered access and offer greater choice to consumers. Several ISPs offer FRIACO-based, fully unmetered retail packages for around £12.99 – £14.99 a month.

4.6 BT’s Surftime (www.surftime.bt.com) Internet access products include unmetered Internet calls for a fixed monthly fee, as well as offering cheaper pay-as-you-go prices and discounted telephone calls. However, they do not include the costs of Internet service provision: in addition to SurfTime, consumers need to purchase Internet service provision from a participating ISP.

4.7 The cable operators also offer their customers unmetered Internet access. Some of these unmetered packages require customers to spend a certain amount of money on their telephone calls each month.

4.8 In August 2001, 40% of Internet homes claimed to use some type of unmetered access (28% fully unmetered and 12% partly unmetered). Oftel estimates that three and a half million customers already subscribe to unmetered packages. Oftel expects this figure to rise as more ISPs develop business models based on FRIACO (see below).

Alternative means of dial-up Internet access

Mobile

4.9 The mobile phone will be another important technology for accessing the Internet (70% of the UK population are mobile subscribers). Services like these are already available – Oftel research shows that 7% of UK residential consumers owns a WAP mobile phone. With the introduction of ‘2½ G’ technologies providing higher data rate communications, WAP services are becoming faster and therefore more user friendly.

4.10 So-called ‘2½ G’ technologies, such as General Packet Radio Service (GPRS) which allows packet data transmission on GSM networks have been deployed by BT Cellnet and Vodafone. GPRS data rates will be about 60kbps initially. BT Cellnet launched the first GPRS service to business customers in June 2000. BT Cellnet and Vodafone now both offer consumer and business GPRS products. Orange expects to offer GPRS to consumer and business customers in October 2001. Orange already offers a High-Speed Circuit Switched Data (HSCSD) product to business customers, which provides data rates of 28.8 kbps.

Television

4.11 Access to the Internet via the television is likely to become increasingly common as web-enabled TV set-top boxes and games consoles become more popular. Consumers can also buy web-enabled TVs (for example, the Bush TV that simply uses the TV as a monitor). These devices are already available and are being used by a small number of consumers. Accessing the Internet in this way may be more convenient for some people who cannot afford, or do not like the complexity or using a computer. Latest published figures show that over eight million UK households have digital television. For more information on satellite access see satellite broadband below.

What is Oftel doing?

4.12 Oftel has taken action in a number of areas relating to dial-up Internet access to ensure fair competition.

Pricing of voice and Internet calls

4.13 In November 1999, Oftel removed the link between the pricing of Internet calls and price of voice calls to enable ISPs to price more flexibly.

FRIACO (flat rate Internet access call origination)

4.14 In May 2000, Oftel made a direction requiring BT to make available an unmetered wholesale Internet access product (called FRIACO) to enable other network operators to offer their own unmetered Internet access products in competition with BT. In February 2001 Oftel launched a further major initiative to promote unmetered Internet access in the UK and further choice for consumers. This requires BT to offer other network operators a new wholesale unmetered Internet access product known as ST FRIACO (Single Tandem FRIACO). Increasing the range of wholesale products available to network operators should boost competition in the provision of unmetered access. This will enable more consumers to get unmetered Internet access more cheaply and easily than before.

4.15 At present, Oftel is facilitating industry discussions on the development of an IP interconnection product for FRIACO. This would provide a more efficient means for operators to connect to BT’s network and has been recognised as the best long-term option for handling the growth in dial-up Internet traffic.

Effective competition reviews of dial-up Internet access

4.16 Oftel’s 2000/01 effective competition review of dial-up Internet access was published in July 2001. Oftel carries out effective competition reviews to assess the level of competition in a particular sector and to ensure that regulation is appropriate. Oftel has measured levels of competition against a number of indicators including price, consumer behaviour and market shares. A separate effective competition review of Internet connectivity was published in August 2001. Oftel has consulted widely on both reviews – the deadline for each was 30 October 2001. Oftel is due to publish a joint final statement on effective competition in the new year (2002).

Oftel Internet Forum

4.17 In order to communicate with the Internet community more effectively, Oftel established a dedicated forum called the Oftel Internet Forum (OIF). This supplements Oftel’s existing regular meetings with key companies, trade bodies and consumer groups. Oftel uses the Forum to gain opinions and ideas about key regulatory developments. It is also used to inform the Internet community of key regulatory developments. The OIF meets about four times a year, each time addressing a particular issue.

Minutes of previous meetings:

– 19 September – ISPs’ terms and conditions

– 23 March 2001 – Internet consumers - well informed and adequately represented?

Broadband

5.1 There are three main ways in which broadband services are being delivered to residential and SME consumers in the UK:

• BT wholesale asymmetric digital subscriber line (‘ADSL’);
• local loop unbundling (‘LLU’); and
• cable modems

5.2 Downstream data rates (from the network to the customer) are usually higher than upstream rates (from the customer to the network) since the kind of information that needs to get to the user – including still and video images and sound – requires a higher data rate. Data rates on the upstream path can be smaller since user responses usually involve small quantities of data only eg text.

5.3 There is also some limited provision by fixed radio that, together with mobile radio and satellite technologies, should in future also be able to deliver broadband services more widely. Larger business users access broadband services via leased lines.

BT’s Asymmetric Digital Subscriber Line (‘ADSL’) Service

5.4 ADSL creates a high-speed digital connection over an existing telephone line using a pair of modems, one at the user end and the other at the exchange. The downstream data rate is much higher than the upstream data rate. DSL is a distance-dependant technology, which means that it is normally available to those consumers who live within 3.5km of their local exchange.

5.5 BT’s key products are:

• IPStream 500: an entry-level ADSL product aimed at the residential market. It uses rate adaptive technology to extend the range from 3.5km to 5.5km from the local exchange at the expense of slower upstream speeds;
• IPStream S: available in 500, 1000 and 2000 kbps variants. Its higher prices and better service quality means that it is aimed at the SME market;
• VideoStream: enables the provision of video-on-demand services; and
• DataStream: enables the provision of IP-based networks, such as corporate intranets.

5.6 There are around 195 operators, service providers and corporates that have signed a contract for BT’s wholesale ADSL products, including BT’s own service provider, BTOpenworld, which we estimate has around 50% of the market. The number of end users with ADSL installed has grown by over 50% from 54,000 in May 2001 to 100,000 at the end of October 2001. Over 30% of these end-users are businesses.

5.7 BT has enabled 1000 exchanges covering 60% of households for the delivery of ADSL wholesale products (up from 839 exchanges covering 50% of UK households in May 2001). BT has made no commitments regarding roll-out past this date. Information on rollout is available at www.bt.com/broadband.

5.8 On 1 September, BT reduced its wholesale monthly rental charge for IP Stream 500 from £35 to £30 a month to enable BT’s wholesale customers to stimulate take up by end users. BT is also introducing some special offers on wholesale connection charges. For example, the connection charge for IPStream 500 has been reduced from £150 to £75 for 3 months starting on 1 October 2001. The connection charge for VideoStream will be reduced from £625 to £50 for six months.

5.9 Kingston Communications introduced its own wholesale ADSL product, RapidTime, on 4 October. The product is currently only offered by Kingston’s own ISP, Karoo.

5.10 For more details on future developments, pricing and what Oftel is doing, click here to view the ADSL Factsheet

Local loop unbundling ('LLU')

5.11 LLU enables competing operators and service providers to create their own ADSL products rather than having to buy BT’s ADSL products on a wholesale basis. Under LLU, operators and service providers are able to install their own equipment in BT’s exchanges in order to offer their own broadband services to end users.

5.12 The LLU condition in BT’s licence came into force on 8 August 2000. This sets the legal framework and obligations on BT and gives Oftel powers to act if problems occur. In addition, the EC Regulation on LLU came into force on 2 January 2001. Since then, there has been an intensive programme of work by BT, other operators and Oftel to set the technical and operational framework for the LLU process. Where necessary, Oftel has been fully prepared to act speedily to resolve any disputes.

5.13 Oftel has recently issued a number of documents relating to LLU. In summary these are:

• Final direction on co-mingling. Oftel has determined that BT shall meet all requests for co-mingling, where an operators equipment is fitted and operated in the same area in an exchange as BT houses its own equipment, unless it is impracticable to do so on technical or network security grounds;
• Draft Direction on Access Control to BT’s exchanges . Oftel is consulting on the process BT uses to allow third party, unescorted access to its exchanges. Oftel proposes that all third party contractors should be treated in the same way. The closing date for the consultation is 7 November;
• Determination on Shared Access pricing.Oftel has determined the pricing for shared access to a loop in which BT continues to provide telephony while another provider uses the higher frequncy portion of the line to provide DSL. The prices determined are £53 rental and £117 installation.
• Direction on Site Clearance. Oftel has determined that BT should not levy a one-off charge for site clearance but should recover site clearance costs in a market space rent for the physical space in an exchange; and
• Statement and draft direction on three pricing investigations . Oftel has now concluded its investigations into the pricing of co-location facilities. While, in general, prices were found to be cost-oriented, some proces were reduced during the investigation and reductions are proposed for others in the draft direction.

5.14 For more details on what is happening on LLU and what Oftel is doing, please see the Local Loop Unbundling Fact Sheet.

Broadband Cable

5.15 Both Ntl and Telewest offer high-speed Internet access over their cable networks via cable modems. Data rates are 512kbps downstream and 128kbps upstream.

5.16 Telewest charges £50 connection and a monthly fee of £33 or £25 if you subscribe to other Telewest services. Ntl charges £25 for installation and either £150 for the modem and a £20 monthly fee, or a monthly charge of £25 including the cost of the modem. Customers can also pay around £30 per month to receive telephone and digital television services bundled with broadband Internet access.

5.17 Most of Ntl and Telewest’s cable networks are broadband ready, but not all. Both operators are working to upgrade their networks where necessary.

5.18 According to publicly available figures at the end of July 2001, Ntl has around 52,000 customers of their cable modem service while Telewest reports that it has around 38,000 cable modem customers (both have more than doubled since the end of March 2001). Ntl has published a target of 100,000 cable modem customers by the end of 2001.

5.19 From July this year, Ntl and Telewest have been running a joint marketing initiative to promote the take-up of high-speed always-on Internet services.

5.20 NTL has launched a new broadband product offering speeds of up to 128 kbps. The new service is available to existing NTL customers via a cable modem priced at £14.99.

Leased Line Access

5.21 Leased lines are permanent high capacity telecommunications links supplied by network operators to predominantly business users, providing dedicated capacity to the user. Operators and services providers also use leased lines to supply, for example, backhaul for mobile networks and connections to the Internet for Internet Service Providers. Leased lines may be provided at a variety of bandwidths. These range from analogue to digital circuits up to 622 Mbps.

5.22 Oftel initiated a review of the national leased line market as a result of concerns about the extent of competition in this market (particularly on the wholesale side). In August 2000, Oftel published a consultation document on national leased lines, which found the market not to be effectively competitive. In the light of responses to the consultation document and a request from Energis for a direction in relation to permanent private circuits (PPCs), there have been several major developments in Oftel’s national leased lines policy:

1. Following consultation, Oftel issued a final Direction to BT on 29 March 2001 allowing BT eight weeks to conclude negotiations with ten operators regarding the provision of cost orientated PPCs at all bandwidths. The Direction allowed BT a further six weeks thereafter to make the products available to all Annex 2 operators. Constructive negotiations between BT and OLOs continued past the initial eight week stage and resulted in the OLOs signing commercial agreements with BT for the provision of PPCs.
2. BT launched PPCs on 1 August 2001 and since then, approximately two thirds of operators' retail private circuits which were eligible for migration have been migrated to the wholesale product. The availability of wholesale PPCs at all bandwidths makes it possible for operators to achieve cost savings of over 30%.
3. Since 1 August , Oftel has received requests for determinations on a number of issues from seven of the OLOs. Oftel has decided to deal with some of the issues on a `fast track' basis and to issue a Determination on them within a substantially reduced timescale compared to normal determinations. The remaining, more complex issues will be determined by the end of January 2002.

5.23 Oftel will publish a final statement on the state of competition in the leased lines market alongside the second Determination described above. The statement will include Oftel’s conclusions on the need to regulate wholesale prices on some or all partial private circuits, in the light of developments following the March Direction and Oftel’s decisions on the most recent disputes.

Broadband Fixed Wireless Access

5.24 Broadband fixed wireless access (‘BWA’) allows high-speed data connections using radio links between an aerial located on the user's premises and a base station, rather than using a telephone line or a cable television network.

5.25 Tele 2 currently offers commercial BWA data-only services for business and residential users in the Thames Valley, Leicester, Nottingham, Leeds and Bradford using spectrum at 3.4GHz.

5.26 The Radiocommunications Agency (‘RA’) auctioned spectrum for BWA at 28GHz in December 2000. Energis, Norweb, Faultbasic, Broadnet, Chorus Communication and Eircom won licences in seven out of fourteen regions, collectively covering 60% of the UK's population. There were no bidders in the remaining seven regions. There is no current commercial deployment and no times given by the winners as to when they might deploy.

5.27 The 28GHz licences that were not awarded in the auction will be made available from mid October 2001 at the original reserve prices (varying from £1 to £2 million), and with the same conditions as previously (minimum coverage, no backhaul, etc).

5.28 Other operators, including C&W and Ntl have spectrum that could be used for higher bandwidth fixed wireless access services but deployments have been limited. For example, there has been some trial deployment by Ntl of 10 GHz equipment for its customers.

5.29 Zipcom (formerly Radiotel) and Atlantic have FWA licences suitable for narrowband services. The future of Ionica’s 3.4GHz and 10 GHz spectrum is also currently under consideration.

Mobile Higher Bandwidth Wireless Access

5.30 The Universal Mobile Telecommunication System (‘UMTS’) is a so-called ‘third-generation (3G)’, broadband, packet-based system to be deployed in Europe for the transmission of text, digitised voice, video, and multimedia to mobile computer and phone users. The likely data rates range from about 144 kbps for fast moving users in rural areas, up to 384 kbps for slow moving users in urban/suburban areas, and perhaps up to 2Mbps for indoor users on pico cells (indoor base stations).

5.31 The UK auction for 5 UMTS licences was held in April 2000. The winners of this competition were the existing 4 GSM operators and TIW (which subsequently sold the licensee to Hutchison Whampoa). Due to lack of widespread availability of 3G handsets, commercial services may not be available until well into the year 2002.

Broadband Satellite Access

5.32 At the moment, some satellites in orbit around the Earth can offer broadband services, however data transfer has traditionally been in one direction only (from the network to the end user). Interactive applications have recently become available whereby a narrowband return path via the PSTN is used. The big two players in Europe are Eutelsat and SES (which operates the Astra fleet).

5.33 In July 2001, BTOpenworld announced that it would soon be offering two-way broadband satellite services to consumers in more remote parts of the UK (beginning in Northern Ireland and the Highlands and Islands of Scotland). BT will be in partnership with the satellite operator Gilat and expects to offer this service to home-based, small and medium sized businesses from November. This service will probably be based on VSAT (Very Small Aperture Terminal) technology.

5.34 Eutelsat has submitted a proposal to the Department for Education and Employment’s (DFEE) ‘Wired Up Communities’ initiative. This proposal will offer satellite Internet access to homes in Cumbria, using the PSTN as return path.