BT: You are doing it wrong.

On the other side of the pond, BT recently turned on Annex M support in their ADSL2+ network in the UK. Annex M is an ADSL2+ configuration profile that allows for a trade of downstream speed for more upstream speed on a broadband connection. BT’s fee for Annex M: £7, or almost $11 per month to their wholesale ISP customers.

Network World covered the story, and the folks at Entanet are pretty positive about the new capability. Entanet offers wholesale access to BT’s ADSL2+ network, and they say to ISPs who use the network, regarding Annex M, “Most importantly – How do you make money from it?”

BT and Entanet are missing the point. Annex M is a capability without a cost in the edge of the network, and the right way to do it is to include it as a flexible option for customers at no charge.

Yes, bandwidth costs money. But BT provides layer-2 hand off of broadband end users to ISPs, so the ISP covers the cost of any additional upstream bandwidth usage. BT’s £7 fee is just to turn on the Annex M feature – they have no additional costs for bandwidth.

The folks at ThinkBroadband call out this quote from BT’s spokesperson. (Note: “our customers” refers to ISPs that BT wholesales to.)

“Annex M allows our customers to expand their portfolio and so find themselves in a better position to tailor – and differentiate – their broadband services by matching them more precisely to the needs of individual businesses. Annex M is just one of the one of the number of broadband developments to help our customers deliver an ever better customer experience and grow their sales in the mixed economy marketplace.”
Colin Annette, (Client Director) BT Communication Service Provider Group

Hint: “tailor – and differentiate” are code words for “charge more”.

BT misses the point.

The opportunity BT ignores is the opportunity to deliver flexibility to the customer. Let the customer choose if they want more downstream (Annex A) or more upstream (Annex M). The carriers edge costs are the same!

There is no reasonable basis for a £7 fee, BT is just doing their own “tailoring” – to their customers wallets.