Dark Matter Politics a blog discussing the unseen forces influencing culture and politics in the Americas.

British Telecom Failures Unbundled

BT (British Telecom) has proved as incompetent as Tube Lines and Metronet, the companies responsible for maintaining and upgrading the London Underground Jubilee, Northern, Piccadilly, Bakerloo, Circle and Victoria lines.

Not an easy feat, but BT’s failure to adequately open its network (unbundled its local loop) is a major blunder which BT should have predicted and planned – given the strong growth and demand for broadband services during the past 36 months.   

Back in November 1999, OFTEL (now known as OFCOM), the UK telecommunications regulator announced BT would have to unbundle its local loop, effectively allowing competitors to install their own lines in BT telephone exchanges.

The process by which operators install their lines in BT exchanges to provide telecoms services direct to end users is referred as local loop unbundling (LLU). Currently, BT offers two types of unbundling services - the bulk migration of fully unbundled (MPF) and shared access (SMPF) lines. Fully unbundled lines are where the LLU operator, for example Bulldog, takes full control of a phone line to a home or business providing both a broadband and phone service. Shared access is where the LLU operator provides the broadband connection, but the phone service remains hooked up to BT's network. In the case of both MPF and SMPF, the maximum amount BT is allowed to charge operators for migrating individual lines in bulk is £34.86 per line. In its "draft determination", OFCOM has ruled that the maximum charge BT should impose for the bulk migration of fully unbundled lines should be £29.06.

A BT spokeswoman was quoted admitting to BT’s inability to manage the demand for local loop unbundling “There is currently a demand to unbundle 20,000 lines a week and we simply do not have enough engineers to deal with this effectively. This has resulted in a growing volume of network faults.” BT’s excuse for the problem of unbundling was down to a “shortage of telecoms engineers”. The task of completing the local loop unbundling cannot be underestimated, however BT was given substantial allowances, including the creation of OpenReach. BT Open Reach is the division that runs the copper in the ground, giving equal access to LLU players and BT Wholesale. 

Regardless of the impact on BT’s competitors and other broadband providers, this delay in unbundling could cause a halt to the growth of broadband in the UK. Furthermore, it is important to acknowledge BT Openworld (BT’s broadband service) is owned by the same group at BT Retail. This is surely a conflict of interest which could potentially lead to BT favouring its own services to the detriment of its rivals. Furthermore, given the demand for unbundling, the cost might rise. Sky's Easynet unit says it costs on average £40,000 ($74,600) to £50,000 ($93,252) per unbundled exchange.

Lastly, BT’s failure to provide adequate and timely resource to unbundling its network has lead to delays in the growth of services in Ireland. BT Ireland CEO Danny McLaughlin said that in April 2005 his company announced plans to invest over 100 million Euro in its network over a three-year period, but as yet had invested barely a tenth of that amount as a result of delays in unbundling the country’s phone networks.

European Union killed the video star!

In an age of YouTube and on-demand programming, how do you define and regulate broadcasted entertainment? How many people have heard of the "Television Without Frontiers" Directive (TVWF Directive)? Do you know the "Television Without Frontiers" Directive, the cornerstone of the European Union's audiovisual policy, might decide the future of interactive services in Europe?

The "Television Without Frontiers" Directive rests on two basic principles: the free movement of European television programmes within the internal market and the requirement that television channels, reserve over half their broadcasting time for European works. On 28 August 2006, the Culture Committee of the European Parliament debated the draft report on the modernised "Television without frontiers" (TVWF) Directive.

The "Television Without Frontiers" Directive (TVWF Directive) is currently being modernised to extend regulation to cover not just traditional scheduled broadcast services, but all audiovisual media services – usually referred as the Audiovisual Media Services (AVMS) Directive. This new definition covers all services which have, as their principal purpose, the provision of moving images in order to entertain, inform or educate, where there some form of compensation is involved – advertising, sponsorship for example. The new definition of the "Television Without Frontiers" Directive (TVWF Directive) does not include private correspondence, but would include a huge number of services that are currently emerging or are yet to emerge – IPTV, mobile TV, through to video blogs and other user generated content.

The modernisation project is driven by the following changes in the audiovisual industry driven by the European Union:

The convergence of technologies and services: traditional (linear) TV, Internet TV, TV on mobile phones and other mobile devices, etc.;

Expansion of fixed broadband, digital TV and 3G networks;

Increase in per-per-view;

Innovations in non-linear service delivery such as video on demand (VOD);

Peer-to-peer exchanges of audiovisual content;

Interwoven linear and non-linear services;

Changing viewer habits: more and more people want the audiovisual content following their time schedule and not the other way around;

New advertising methods, such as search-related ads on the internet or SMS ads on mobile phones.

The exact scope of the legislation the European Commission is proposing is unclear, however opposition is mounting. Shaun Woodward MP, Minister for Creative Industries and Tourism for the UK government summarises his concerns; "We have serious concerns over the inclusion of non-linear services [such as video-on-demand] in the Directive. This is neither desirable nor practical, as there is nothing to stop companies relocating outside the EU to bypass regulations. Companies may relocate, taking jobs and services elsewhere, while the content is still consumed here." Furthermore OFCOM has published a study conducted by RAND Europe on the implications of the new regulations on video and streaming content online.

The threat is that the revised "Television Without Frontiers" Directive legislation will create legal uncertainty because it directly overlaps with other legislation (currently in place within each member state) and is to vague to establish clear direction. Furthermore, self-regulation schemes should be encouraged instead of more regulation related to the broadcasting and advertising scope of new interactive services. Currently there is no industry standard for advertising on emerging platforms such as video content and video on demand – will the new legislation establish limits before the market can determine the best balance between user experience and monetary contribution?

It is a matter of Dark Matter Politics when regulation ordained by the European Union preludes the opportunity for the market, through testing and self regulation, to determine the best way of managing new emerging technologies. Furthermore, the Audiovisual Media Services (AVMS) Directive may not only stifle the growth of interactive content in Europe but take precedence over the choices and legislations of each member state.

The Google Economy: Access Determines Value

The Google Economy. The term identifies the concept that the value of a resource can be determined by the way that resource is linked to other resources (its accesability and relationship to other resoruces). Google and the Internet have identified the role of citation as a means of defining value – effectively lowering the barriers to entry for the publication and distribution of information. What Google did was establish a methodology for establishing value from those resoruces to other resources.

However the Google economy, as with market economies, is subject to uncertainties, fluctuation, and occasional manipulation. Furthermore, as with market economies, is there a true open access to valuable information on Google? The reality is that the value of information under the Google Economy is not determined by its style or trustworthiness but by how accesible it is – and like it or not Google contols accessability. Lets keep in mind Google makes a duplicate copy of the entire content of each Web page it crawls for indexing and then keeps the copy it created, and subsequently controls, within its own storage facilities.

Below is a chart lists (based on week ending May 13, 2006) the top twenty Google domains as their overall share in the marketplace. Google is usually referred as a "category killer" – it is the consumer which will have the last say on the future of the Google Economy.

 

Google                                     79.98%

Google Image Search             9.54%

Google Mail                             5.51%

Google News                          1.49%

Google Maps                           0.82%

Froogle                                    0.46%

Google Video Search              0.45%

Google Groups                        0.43%

Google Scholar                       0.27%

Google Book Search               0.25%

Google Earth                           0.22%

Google Desktop Search         0.18%

Google Directory                     0.10%

Google Answers                     0.09%

Google AdWords                    0.07%

Google Local                           0.05%

Google Finance                       0.03%

Google Calendar                     0.01%

Google Talk                             0.01%

Google Labs                            0.01%

Email Tax Coming to Your Inbox?

The European Parliament's Committee on Budgets lead by Alain Lamassoure has floated the idea of levying a tax of 1.5 cent on every sms text, and tax of 0.00001 cent on every email. Lamassoure is quotes as saying "This is peanuts, but given the billions of transactions every day, this could still raise an immense income."

The European Union's budget is currently funded through a combination of duties, VAT and contribution by member states. The European Union currently works on the basis of a seven-year budget, with new funding proposals expected by 2008/2009. Calls for a byte tax is not new. The first major proposal for taxing electronic information was by Arthur Cordell in a 1994 Club of Rome report.

Proponents of the btye tax argue that such a tax will offset the erosion of traditional revenue collection as we all go online or that it is a new, low-impact tax that can be used for international development. Oponents of the byte tax argue the btye tax it would discourage electronic transmission of information; being counterproductive in that it burdens e-commerce and its productivity.

Since its inception, the internet has been at the centre of a taxation debate. The 1998 Internet Tax Freedom Act (formerly known as S.442)
was signed into law on October 21, 1998 by President Bill Clinton to bar state and local governments from taxing Internet access service and imposing discriminatory taxes on electronic commerce. Another debate currently taking place in the legislative halls of Washington is the issue of Net Neutrality.   

Every form of taxation should be required to demonstrate substantial improvement in the communal welfare of citizens. If considered a "pay-to-send message" tax or "byte tax" should at least guarantee reduction of spam and security for the average consumer. While not widely used this solution already exists - as a voluntary cost as opposed to a mandatory tax- in the form of private services such Goodmail Systems that serve as a certification and validation for email senders.

Taxation of email to grow the coffers of governmental organisations is ill advised and will have minimal impact on consumers welfare when compared with much more pro-active environmental or green taxes.

Octavia Hill, The Church of England and Institutional Abuse

The Church of England recently agreed to sell the Octavia Hill estates in South London, housing 1,100 tenants, including key workers like ambulance staff and teachers. The Octavia Hill estate is being sold to the Genesis Housing Group and private housing supplier the Granger Trust. A similar sale of the Waterloo estate to the same partnership of Genesis and Granger last year left tenants facing a 6% rent hike. The Octavia Hill estate was part of a legacy held in trust by the Church Commissioners, which was based on the pioneering work of Octavia Hill, a 19th Century Evangelical social philanthropist and social reformer who sought to ensure that working people could possess affordable housing in London.

The Church of England is big, big business. The Church Commissioners were formed in 1948 to manage the Church’s historical assets, mainly invested in the stock market and property to support the Church ministry. The Church Commissioners acts as the financial controller for the Church of England managing the Church’s pension commitments and fund the work and needs of bishops, cathedrals and parish ministry.

The Church Commissioners are making a 14% annual return on their investments and £100 million a year from property sales. The Church of England at their last valuation in 2004 had investment capital of £4.3bn. The Church of England’s investment policies where questioned when it was revealed it invests about £2.5m of its £900m share portfolio in Caterpillar which has been heavily criticised for supplying vehicles used by Israel to demolish Palestinian homes and building Israel’s Separation Wall. Following pressure form activist groups the Church of England's general synod decided earlier this year to disinvest church funds from companies profiting from Israel's illegal occupation of Palestinian territory. Furthermore, the Church of England receives £200 million in Gift Aid, £60 million in Inland Revenue tax back programs, £200 million in cash and donations by congregations and visitors and £140 million raised through various programmes including letting of church halls, bookstalls and parish magazines.

The BBC’s Watchdog produced a report the 14th of March looking into the sale of the Octavia Hill estates and the 'Key Worker Letting' agreements might be in risk for thousands of residents.

So what does the Church of England spend these financial resources on? A report published last year indicates, £4.5 million spent on parish mission funding,  £104 million in clergy pensions, £20 million in bishop’s ministry, £27 million on ministry support for dioceses and £6.5 million in cathedral’s ministry. Having a financially solvent Church is necessary, however the methods to generate this solvency is where the Church of England has failed time after time.   

A report published by the General Synod in July 2005 says the Church has allowed itself to “drift apart from society”, undermining its mission to the whole nation. Some parts of the Church are little more than a club for existing members”. The Church has systematically compromised its’ basic principles by placing the financial needs of its administration before the needs of the people it serves. Unfortunately this is not a new phenomenon. Earlier this year the General Synod finally acknowledged complicity in the slave trade after hearing that the Church had run a slave plantation in the West Indies and that individual bishops had owned hundreds of slaves (the Church's missionary arm, the Society for the Propagation of the Faith in Foreign Parts, owned the Codrington plantation in Barbados).

This is NOT a question of faith, but an issue of institutional abuse. Western civilisation has been created by men and women who have lived and worked together under the formula of institutions.   

The Octavia Hill estates fiasco illustrates the choice faced by the Church of England in this period of financial prudence. Does it use its' financial influence to preserve and protect the social benefits of the general population (who might be affiliated to other faiths) or does it concentrate on the continued funding of expensive national and local programs aimed mainly at its' constituency of believers?

church of england faith BBC Octavia Hill Dark Matter