'Inadequate' BT blamed for DSL failure and job losses

UK DSL provider OnCue Telecommunications has been forced to delay the launch of its business-focused broadband network until 2002, resulting in a swathe of redundancies. The company blames BT for its ills.

In a written response to silicon.com enquiries, the company said: "This is a direct result of the slower-than-expected process of local loop unbundling and the lack of a viable wholesale DSL product from BT."

The company expects to announce that half of its 165 employees will be made redundant, when the statutory consultancy period ends later this week.

It also "categorically" denied rumours that two of its backers, which include Madison Dearborn Partners, Soros Private Equity and TD Capital, had withdrawn funding from the project.

Neil Hollister, head of marketing and strategy at OnCue, explained that BT continued to restrict access to its exchanges, so the company had been unable to build its own DSL network.

In the meantime it had been reselling BT's DSL service, but had been forced to stop reselling due to the unacceptably poor performance of the service.

BT, he claimed, refused to guarantee service up-time. Hollister said: "On the wholesale product there is no service level agreement, whatsoever. So when the product doesn't work you phone BT and they say 'we never promised that it would work'."

He confirmed OnCue had made a number of complaints to Oftel on the matter but a BT spokesman claimed to have no knowledge of any complaints regarding poor "availability and performance standards" from any of the 150 independent providers using the service.

But it is clear that this is not just OnCue crying 'wolf'.

At Brighton-based broadband provider, Mistral, operations director, Karl Robinson told silicon.com: "We do have problems with performance standards, but more on the fault handling side. When ADSL works, it works great. When it fails, response times to fault resolution are often appalling."

He added: "Currently there is no service level agreement from BT for fault resolution, so we have no real leverage to make things happen in this area. We will not be compensated for this downtime, so we will be forced to dispute payment with BT."

Currently BT will not allow providers like Mistral to install the customer premises equipment (CPE), which means any problems with configuration have to be referred back to BT.