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ATPM 15.02
February 2009






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by Mark Tennent,

Broadband Endowment

When we got our mortgage some years ago, Mike, the chap arranging it, told us about endowment mortgages. He drew charts to show how good they could be, by paying for the house and leaving a pot in the bank. Mike gave us the documentation, for us to sign alongside the warning that it was not guaranteed there would be enough money to pay the mortgage at the end of the term. We elected to get a repayment mortgage instead.

Come forward a few years to see people complaining because they were also told about wonderful returns from endowment mortgages and chose to buy one. They had signed to say they understood that the final amount depended on the financial markets, with just as much chance of a shortfall as a windfall at the end of the term. As the last recession hit and with endowment mortgages running extremely short, the government decided we would all bail them out by saying that the policies were “mis-sold.”

The same thing is happening with broadband. Millions of customers, according to Ofcom the telephones regulator, are being ripped-off because they get less than half the broadband speed they pay for. Speeds are at their lowest during peak times, which is between 5 PM and 6 PM on Sundays for some strange reason. In rural areas, throughput is likely to be 15% lower than in urban areas. Like endowment mortgages, why did some Ofcom jobsworth think this research showed anything we didn’t know already?

The Small Print

Broadband suppliers’ contracts state clearly that they will not guarantee line speed, and most will have a fall-back position for those unhappy with throughput. For many situations where an 8 Mb line produces an unreliable speed, a 2 Mb link will give a consistent, almost maximum figure, at a lower cost to the subscriber.

When one signs-up for broadband there is an initial check on the line to show its theoretical maximum. With telephone line–based broadband, it depends on distance from exchange and the quality of lines inside and outside the home. Add another extension or fax, or even plug into the wrong port in the wall socket, and connection speed can drop significantly.

Different software used by broadband suppliers can also affect line speed. We are lucky to have almost the full set of unbundled services available at our local exchange. Yet we also find that BT’s 8 Mb Max services, albeit bought via ISPs such as Aquiss, give consistently higher speeds than the other suppliers’ 8 Mb links through the same local loop. From what we can make out, BT’s Max software checks line speeds regularly and adjusts it up and down whilst other suppliers use fixed “profiles,” which can provide a slower throughput in return for reliability.

Our BT service improved even more this week when BT switched our ISP to IPStream Connect instead of IPStream Central Pipes. It could be even better if BT were able to charge more for letting other broadband suppliers to use BT’s lines, then invest in Ethernet service to the street cabinet. With the government and opposition parties complaining about Britain’s outdated Internet services, BT also needs to get back any investment it makes in a fibre optic network or it won’t start to build one. It is Ofcom who are holding this development back by not allowing BT scope in charges for access to the proposed £1.5 billion upgrade.

For most users, broadband speeds are acceptably fast already. Even a 2 Mb link can go faster than much data is transmitted. It is only the rise in bandwidth-hogging for TV and movie downloads that puts a great strain on BT’s copper network. The TV companies already have their own monopoly methods of digital transmission via RF and cable, with satellite coming on stream as well. If they are swamping broadband services, surely they too should be paying towards improving the delivery methods?

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