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| Matthew Hattersley |
Matthew Hattersley, Technical Director at the Vaioni Group, looks at just how open, or not, the market is these days.
Since 1991 we’ve seen a supposedly open market within the Telecommunications industry. However since the Government’s White Paper ‘Competition and Choice: Telecommunications Policy for the 1990s’ was issued this free and open market has yet to fully come to fruition. There have been some notable success stories since then, however an unlevel playing field and confusing political messages are still holding the industry back.
The most widely talked about issue for those of us really wanting to push Carrier Ethernet delivery to the customer premises without going cap in hand to BT is the Fibre Tax. For those of you not aware, the Fibre Tax essentially applies to any service provider lighting fibre across the UK. Ok, so in the UK we are used to being taxed to the hilt for everything from inheritance, to beer, to insurance, but the problem here is that the likes of BT and Virgin don’t pay at the same rate. Their networks are assessed as a whole and an overall valuation is given. This value is based upon revenue and rateable value. This puts the costs per metre for BT and Virgin much lower than for anybody else. To clarify, the standard method of taxation is based upon fibre length, thus the prospect of lighting any long haul links are extremely expensive. According to the likes of Geo and Vtesse this can increase the cost of operating that fibre by around 10%.
One would think that in a still emerging market, where small enterprise needs nurturing, the government would provide incentives not prohibitive cost barriers. Or as put more eloquently by Chris Smedley, CEO of network operator Geo, “If the government cannot provide funds to help roll out networks because they expect the market to do it, the least they could do is not put direct disincentives in our way.”
Of course we all thought that the inbound new government would, as per the electoral manifesto, review the Valuation Office Agency’s (VOA) Fibre Tax, stated at the time as being ‘a detriment to smaller operators building fibre networks.’
Earlier this year Conservative MP Ed Vaizey, a member of the Modernisation and Environmental Audit Select Committees, spoke with the VOA. His conclusions being that the system (VOA) has been transparent and that fibre tax does not need a review. Needless to say the industry has reacted with anger and frustration to this news, especially considering that this is the same man who before the election stated, “Labour’s policy on business rates tax has caused huge damage to telecoms in the UK’.”
So with all of the above mess in the market place, the very idea of building out Next Generation Networks is daunting to say the least. At Vaioni we’ve taken the decision that although network build out is suitable some of the time, we can use a variety of third parties and act as a wholesale Carrier Ethernet aggregator, bringing such services as QoS, failover, OAM-based SLAs and Metro Ethernet technologies (E-LAN, EVPL) to your network. This results in competitive network pricing and excellent reach.
We also took the decision that whilst the VOA applies this negative pressure against the market place Vaioni should concentrate upon improving service within short haul Metro areas and using our strategic partnerships to extend reach nationally. As such the Metro network is here to stay, with connectivity within these areas being higher and more resilient than ever before. From wire speed 10GbE deployments to DWDM deployments scaling to 40+ 10GbE channels from a single pair of fibre, the sky really is the limit. If you find yourself out in the sticks, the reliance upon Virgin and BT means you could be facing one hell of a civils charge. Not quite the Digital Britain we’ve been waiting for.
With Metro Networks and Carrier Ethernet finally getting some serious momentum there is an amazing wealth of opportunity for resellers and end-users alike. The newer technologies brought to light by the Metro Ethernet Forum and participating vendors mean that we can now deliver fully meshed services between tails delivered by multiple vendors, with QoS traffic engineering and non-intrusive monitoring.
In conclusion, although we don’t operate within a fully open market yet, emerging technologies have once again come to the rescue. By using a tail neutral provider you can extend your reach and delivery services and solutions with the features you need and the price point you want.