Campaign for Unmetered Telecommunications
Encyclopedia
The Campaign for Unmetered Telecommunications (CUT) was a United Kingdom political pressure group that operated between 1998 and 2001. CUT campaigned for a fairer choice of telecommunications tariffs for consumers—in particular, unmetered
local telephone calls that the organisation said would allow the "full potential" of the Internet to be realised. CUT pressured telecommunications operators, regulatory bodies and Government. The campaign was cited as "a major driving force" behind the introduction of unmetered Internet access in the United Kingdom.
to the telecommunications market, access to the Internet was most commonly achieved through a dial-up connection that limited speeds to a bitrate
of less than 56 kilobit
s per second. In the 1990s, telecommunications companies in Europe and the United States offered "local call
" telephone numbers for this purpose. In Europe, these calls were usually billed based on the length of time a user was connected, whereas US companies offered free local calls for a flat rate
fee. As a result, Internet use in the UK was at a much lower rate than in the US; the differing billing strategies meant that US consumers could afford to stay connected for longer periods than their UK counterparts, who had to ration their use of the Internet to avoid large phone bills. This in turn held back the growth of e-commerce
and Internet gaming in the UK. In January 1998, the European Union had opened to telecommunications competition, but by the end of the year costs still remained high, and little movement had been made on the provision of unmetered Internet access. In Spain, former state operator Telefónica de España
was forced to reduce costs after protests from users, and Germany's former state operator, Deutsche Telekom
, was reported to the European Commission by AOL
for perceived anti-competitive pricing. Marketing analysts supported the view that metered access stifled economic growth; Jupiter Communications
reported that European e-commerce generated only 3% of the revenue of that generated in the US in 1998. The International Data Corporation
reported that approximately 10% of the population of Europe was active on the web in 1998–1999, and that approximately 11% of these bought products or services via the web in the last three months of 1998. AOL was one of the few companies that supported a similar business model in Europe as it did in the US, whereas companies such as British Telecom (BT) claimed that offering unmetered local calls was not cost-effective.
cost." Finally, CUT said that "free" was an abused term, and gave Freeserve
as an example: "Freeserve has nothing to do with 'free': although it levies no subscription fee, you're still paying by the minute to access its services." Using the term "unmetered" instead, CUT said, "implies you pay a single subscription fee for the service and that's all you pay. There's no question of 'something for nothing': we demand fair, not free, charges."
CUT said that people on lower-incomes especially would benefit from unmetered access, as they were unable to exploit the Internet's potential—its social, educational, and commercial benefits—when faced with the high call charges of the existing system. CUT was financed through paid yearly membership; by April 2000 it claimed to have over three hundred members, several thousand "pledge signers", and "over
one hundred and eighty explicit corporate supporters" that included AOL UK, Intel, and Legal & General
. CUT claimed to have other corporate supporters that requested not to be named.
that took place on June 6, 1999. Users in 14 countries participated in the 24-hour boycott. The united European campaign aimed for:
The boycott was supported by AOL. In the days leading up to the boycott, AOL UK contacted its subscribers and gave them background information about CUT's campaign, including an open letter that was written jointly by CUT and AOL UK's then-president and managing director, David Phillips. AOL UK users were given details on how to contact their Member of Parliament
and Member of the European Parliament
, and were asked to write to them about Internet costs in the UK. AOL UK also surveyed its users on the issue of unmetered Internet access. Almost all of the respondents said local call costs were the largest barrier to Internet use. AOL Europe had previously backed calls for unmetered access; in early 1999, the company asked the European Commission
to end perceived anti-competitive pricing by Germany's former state telecommunications operator, Deutsche Telekom
. AOL Europe's then-president and chief executive officer, Andreas Schmidt, said that unmetered access would "fuel job creation and provide consumers and businesses with an unprecedented array of new choices". The German Institute for Economic Research
backed the view that Internet use in Germany was too costly, and that this was mainly due to the high price of local calls.
On June 5, 1999—one day before the boycott—BT began to provide unmetered Internet access at weekends to users of its "Plan Unlimited" tariff. BT—at the time not known for being receptive to new technologies or changes in its business model—had previously dismissed the idea, and its change in policy represented a significant progression for the company and the telecommunications industry as a whole. The timing of the announcement also ensured that BT's customers would be more likely to take advantage of the unmetered access instead of participating in the boycott.
endorsed the campaign in a piece written for CUT; the piece was quoted by the Member of Parliament
for Northavon, Steve Webb
, in a House of Commons debate in June 1999. Webb backed the view that the UK's telecommunications companies were stifling the Internet as a tool for "business, education and leisure" through metered Internet access. He said CUT had been "energetic and effective in publicising the issue" and praised CUT's website for its promotion of unmetered telecommunications. In March 1999, the Parliamentary Select Committee on Trade and Industry invited CUT to participate in the Committee's "Inquiry into Electronic Commerce"; the invitation was to respond to the then-telecommunications regulator Oftel
's submission to the committee, in which Oftel argued against unmetered local calls. CUT's submission was quoted at length in the Committee's report, which CUT said endorsed the eventual adoption of unmetered telecommunications. In October 1999, a delegation from CUT met with then-Department of Trade and Industry Minister of State for Small Business and e-Commerce, Patricia Hewitt
, and in November 1999, CUT was the only body from outside the telecommunications and Internet service provision
industry to be invited to membership of Oftel's "Third Internet Forum on Internet tariffs".
In December 1999, BT presented five tariffs—subsequently reduced to three—for approval by Oftel. These packages offered unmetered Internet access to consumers. In February 2000, cable operator Telewest did likewise for a maximum fee of £20 per month, and by the end of March, the operator had offered a broadband service for £50 per month. In April 2000, NTL offered free Internet access to its cable television subscribers and unmetered access at £10 per month to non-subscribers. The cable operators' business model was subsequently emulated by many other ISPs, including BT Internet, LineOne
, Freeserve
, Tiny Online, virgin.net
and ic24. In April 2000, MCI Worldcom
announced its own wholesale product after its complaint against BT for anti-competitive practises was upheld. Though BT offered an unmetered product, it wasn't until 2001 that BT had written FRIACO
(Flat Rate Internet Access Call Origination) into its licence.
On June 10, 2001, at CUT's third annual general meeting, the committee members voted to dissolve the group, as they believed that CUT's objective—"unmetered telecommunications at reasonable cost in the United Kingdom"—had been met. The Register
cited CUT as "a major driving force behind the adoption of unmetered access in Britain", though it had said that CUT "would end up being a casualty of its own success" after helping to "turn [the telecommunications industry] on its head". Oftel staff also claimed that CUT's operations influenced policy-making at the body. Tim Richardson of The Register said, "Every single person who uses unmetered Net access in the UK is indebted to CUT. Make no mistake, CUT took on BT and won."
FRIACO
FRIACO stands for Flat Rate Internet Access Call Origination. It refers to the unmetered access to dial-up Internet services. Telephone numbers used for such dial-up services are free-phone numbers, so that the user of the service is not paying for the duration of the call in a metered way...
local telephone calls that the organisation said would allow the "full potential" of the Internet to be realised. CUT pressured telecommunications operators, regulatory bodies and Government. The campaign was cited as "a major driving force" behind the introduction of unmetered Internet access in the United Kingdom.
Background
Before the introduction of broadband InternetBroadband Internet access
Broadband Internet access, often shortened to just "broadband", is a high data rate, low-latency connection to the Internet— typically contrasted with dial-up access using a 56 kbit/s modem or satellite Internet with inherently high latency....
to the telecommunications market, access to the Internet was most commonly achieved through a dial-up connection that limited speeds to a bitrate
Bitrate
In telecommunications and computing, bit rate is the number of bits that are conveyed or processed per unit of time....
of less than 56 kilobit
Kilobit
The kilobit is a multiple of the unit bit for digital information or computer storage. The prefix kilo is defined in the International System of Units as a multiplier of 103 , and therefore,...
s per second. In the 1990s, telecommunications companies in Europe and the United States offered "local call
Local call
In telephony, the term local call has the following meanings:# Any call using a single switching center; that is, not traveling to another telephone network;# A call made within a local calling area as defined by the local exchange carrier;...
" telephone numbers for this purpose. In Europe, these calls were usually billed based on the length of time a user was connected, whereas US companies offered free local calls for a flat rate
Flat rate
A flat fee, also referred to as a flat rate or a linear rate, refers to a pricing structure that charges a single fixed fee for a service, regardless of usage. Rarely, it may refer to a rate that does not vary with usage or time of use...
fee. As a result, Internet use in the UK was at a much lower rate than in the US; the differing billing strategies meant that US consumers could afford to stay connected for longer periods than their UK counterparts, who had to ration their use of the Internet to avoid large phone bills. This in turn held back the growth of e-commerce
Electronic commerce
Electronic commerce, commonly known as e-commerce, eCommerce or e-comm, refers to the buying and selling of products or services over electronic systems such as the Internet and other computer networks. However, the term may refer to more than just buying and selling products online...
and Internet gaming in the UK. In January 1998, the European Union had opened to telecommunications competition, but by the end of the year costs still remained high, and little movement had been made on the provision of unmetered Internet access. In Spain, former state operator Telefónica de España
Telefónica
Telefónica, S.A. is a Spanish broadband and telecommunications provider in Europe and Latin America. Operating globally, it is the third largest provider in the world...
was forced to reduce costs after protests from users, and Germany's former state operator, Deutsche Telekom
Deutsche Telekom
Deutsche Telekom AG is a telecommunications company headquartered in Bonn, Germany. It is the largest telecommunications company in Europe....
, was reported to the European Commission by AOL
AOL
AOL Inc. is an American global Internet services and media company. AOL is headquartered at 770 Broadway in New York. Founded in 1983 as Control Video Corporation, it has franchised its services to companies in several nations around the world or set up international versions of its services...
for perceived anti-competitive pricing. Marketing analysts supported the view that metered access stifled economic growth; Jupiter Communications
Forrester Research
Forrester Research is an independent technology and market research company that provides its clients with advice about technology's impact on business and consumers. Forrester Research has five research centers in the US: Cambridge, Massachusetts; New York, New York; San Francisco, California;...
reported that European e-commerce generated only 3% of the revenue of that generated in the US in 1998. The International Data Corporation
International Data Corporation
International Data Corporation is a market research and analysis firm specializing in information technology, telecommunications and consumer technology. IDC is a subsidiary of International Data Group...
reported that approximately 10% of the population of Europe was active on the web in 1998–1999, and that approximately 11% of these bought products or services via the web in the last three months of 1998. AOL was one of the few companies that supported a similar business model in Europe as it did in the US, whereas companies such as British Telecom (BT) claimed that offering unmetered local calls was not cost-effective.
Aims
Founded in April 1998, the not-for-profit Campaign for Unmetered Telecommunications was set up with the primary aim of seeing the introduction of unmetered Internet access in the UK. In its mission statement, CUT argued the case for unmetered telecommunications:CUT did not use the term "free" because it felt the term was used by the media and telecommunications companies, and that "unmetered" provided a more precise representation of the organisation's aims. CUT said, Free' is not free. Although there may be no subscription fee you pay indirectly for such access, usually by telephone calls charged by the minute." It also argued that using the term "encourages trivial responses such as 'you can't get something for nothing' or 'there's no such thing as a free lunch'. Using 'unmetered' emphasises that you pay a single subscription fee for access, say every month, and there is no per-minute callcost." Finally, CUT said that "free" was an abused term, and gave Freeserve
Freeserve
Freeserve was a British Internet Service Provider, founded in 1998. It was once a constituent of the FTSE 100 Index but merged into the Wanadoo group in 2000, itself a subsidiary of France Telecom...
as an example: "Freeserve has nothing to do with 'free': although it levies no subscription fee, you're still paying by the minute to access its services." Using the term "unmetered" instead, CUT said, "implies you pay a single subscription fee for the service and that's all you pay. There's no question of 'something for nothing': we demand fair, not free, charges."
"Why:
- The full potential of the Internet can only be realised through it
- It will enrich local community life
- Traditional and electronic commerce will be enhanced by its availability
- It is done elsewhere, profitably
- The majority of costs of telecommunications provision are fixed
How:
- Educating ourselves
- Putting pressure on telecommunications operators, regulatory bodies and Government
- Countering misinformation
- Encouraging others"
CUT said that people on lower-incomes especially would benefit from unmetered access, as they were unable to exploit the Internet's potential—its social, educational, and commercial benefits—when faced with the high call charges of the existing system. CUT was financed through paid yearly membership; by April 2000 it claimed to have over three hundred members, several thousand "pledge signers", and "over
one hundred and eighty explicit corporate supporters" that included AOL UK, Intel, and Legal & General
Legal & General
Legal & General Group Plc , commonly known as Legal & General, is a multinational financial services company headquartered in London, United Kingdom. Its products include life insurance, general insurance, pensions and investments. It has operations in the United Kingdom, Egypt, France, Germany,...
. CUT claimed to have other corporate supporters that requested not to be named.
European web boycott
CUT organised the United Kingdom's involvement in a pan-European boycott of the World Wide WebWorld Wide Web
The World Wide Web is a system of interlinked hypertext documents accessed via the Internet...
that took place on June 6, 1999. Users in 14 countries participated in the 24-hour boycott. The united European campaign aimed for:
- "Costs of all telephone calls to more closely mirror the independently audited cost to telecommunications operators of providing these calls, as already mandated by EU law."
- "Introduction of flat-rate charges for—in the first instance—local calls, so that anyone can talk to friends and relatives, and Internet users can dial up to Internet Service Providers using a telephone modem, without worrying about the clock ticking and charges ratcheting up."
- "For any remaining metered calls, abolition of the minimum call charge so that calls are paid for solely by the time spent connected."
- "For Internet users, quicker introduction of modern access methods such as xDSL, cable modems and satellite access, which do not use the telephone modem and are a great improvement on it for users."
The boycott was supported by AOL. In the days leading up to the boycott, AOL UK contacted its subscribers and gave them background information about CUT's campaign, including an open letter that was written jointly by CUT and AOL UK's then-president and managing director, David Phillips. AOL UK users were given details on how to contact their Member of Parliament
Member of Parliament
A Member of Parliament is a representative of the voters to a :parliament. In many countries with bicameral parliaments, the term applies specifically to members of the lower house, as upper houses often have a different title, such as senate, and thus also have different titles for its members,...
and Member of the European Parliament
Member of the European Parliament
A Member of the European Parliament is a person who has been elected to the European Parliament. The name of MEPs differ in different languages, with terms such as europarliamentarian or eurodeputy being common in Romance language-speaking areas.When the European Parliament was first established,...
, and were asked to write to them about Internet costs in the UK. AOL UK also surveyed its users on the issue of unmetered Internet access. Almost all of the respondents said local call costs were the largest barrier to Internet use. AOL Europe had previously backed calls for unmetered access; in early 1999, the company asked the European Commission
European Commission
The European Commission is the executive body of the European Union. The body is responsible for proposing legislation, implementing decisions, upholding the Union's treaties and the general day-to-day running of the Union....
to end perceived anti-competitive pricing by Germany's former state telecommunications operator, Deutsche Telekom
Deutsche Telekom
Deutsche Telekom AG is a telecommunications company headquartered in Bonn, Germany. It is the largest telecommunications company in Europe....
. AOL Europe's then-president and chief executive officer, Andreas Schmidt, said that unmetered access would "fuel job creation and provide consumers and businesses with an unprecedented array of new choices". The German Institute for Economic Research
German Institute for Economic Research
The German Institute for Economic Research, German Deutsches Institut für Wirtschaftsforschung is one of the leading economic research institutes in Germany. It is an independent, non-profit academic institution which is involved in basic research and policy advice...
backed the view that Internet use in Germany was too costly, and that this was mainly due to the high price of local calls.
On June 5, 1999—one day before the boycott—BT began to provide unmetered Internet access at weekends to users of its "Plan Unlimited" tariff. BT—at the time not known for being receptive to new technologies or changes in its business model—had previously dismissed the idea, and its change in policy represented a significant progression for the company and the telecommunications industry as a whole. The timing of the announcement also ensured that BT's customers would be more likely to take advantage of the unmetered access instead of participating in the boycott.
Impact and dissolution
In November 1998, Tim Berners-LeeTim Berners-Lee
Sir Timothy John "Tim" Berners-Lee, , also known as "TimBL", is a British computer scientist, MIT professor and the inventor of the World Wide Web...
endorsed the campaign in a piece written for CUT; the piece was quoted by the Member of Parliament
Member of Parliament
A Member of Parliament is a representative of the voters to a :parliament. In many countries with bicameral parliaments, the term applies specifically to members of the lower house, as upper houses often have a different title, such as senate, and thus also have different titles for its members,...
for Northavon, Steve Webb
Steve Webb
Steven John Webb, better known as Steve Webb , is an English Liberal Democrat politician. He is the Member of Parliament for Thornbury & Yate and the Minister of State for Pensions.-Background:...
, in a House of Commons debate in June 1999. Webb backed the view that the UK's telecommunications companies were stifling the Internet as a tool for "business, education and leisure" through metered Internet access. He said CUT had been "energetic and effective in publicising the issue" and praised CUT's website for its promotion of unmetered telecommunications. In March 1999, the Parliamentary Select Committee on Trade and Industry invited CUT to participate in the Committee's "Inquiry into Electronic Commerce"; the invitation was to respond to the then-telecommunications regulator Oftel
Oftel
Oftel has been superseded as the British telecommunications regulator by Ofcom .----The Office of Telecommunications was a department in the United Kingdom government, under civil service control, charged with promoting competition and maintaining the interests of consumers in the UK...
's submission to the committee, in which Oftel argued against unmetered local calls. CUT's submission was quoted at length in the Committee's report, which CUT said endorsed the eventual adoption of unmetered telecommunications. In October 1999, a delegation from CUT met with then-Department of Trade and Industry Minister of State for Small Business and e-Commerce, Patricia Hewitt
Patricia Hewitt
Patricia Hope Hewitt is an Australian-born British Labour Party politician, who was the Member of Parliament for Leicester West from 1997 until 2010. She served in the Cabinet until 2007, most recently as Health Secretary....
, and in November 1999, CUT was the only body from outside the telecommunications and Internet service provision
Internet service provider
An Internet service provider is a company that provides access to the Internet. Access ISPs directly connect customers to the Internet using copper wires, wireless or fiber-optic connections. Hosting ISPs lease server space for smaller businesses and host other people servers...
industry to be invited to membership of Oftel's "Third Internet Forum on Internet tariffs".
In December 1999, BT presented five tariffs—subsequently reduced to three—for approval by Oftel. These packages offered unmetered Internet access to consumers. In February 2000, cable operator Telewest did likewise for a maximum fee of £20 per month, and by the end of March, the operator had offered a broadband service for £50 per month. In April 2000, NTL offered free Internet access to its cable television subscribers and unmetered access at £10 per month to non-subscribers. The cable operators' business model was subsequently emulated by many other ISPs, including BT Internet, LineOne
LineOne
LineOne was an Internet Service Provider in the United Kingdom in the 1990s. LineOne was a joint venture of News International, United News & Media and British Telecom...
, Freeserve
Freeserve
Freeserve was a British Internet Service Provider, founded in 1998. It was once a constituent of the FTSE 100 Index but merged into the Wanadoo group in 2000, itself a subsidiary of France Telecom...
, Tiny Online, virgin.net
Virgin Media
Virgin Media Inc. is a company which provides fixed and mobile telephone, television and broadband internet services to businesses and consumers in the United Kingdom...
and ic24. In April 2000, MCI Worldcom
MCI Inc.
MCI, Inc. is an American telecommunications subsidiary of Verizon Communications that is headquartered in Ashburn, Virginia...
announced its own wholesale product after its complaint against BT for anti-competitive practises was upheld. Though BT offered an unmetered product, it wasn't until 2001 that BT had written FRIACO
FRIACO
FRIACO stands for Flat Rate Internet Access Call Origination. It refers to the unmetered access to dial-up Internet services. Telephone numbers used for such dial-up services are free-phone numbers, so that the user of the service is not paying for the duration of the call in a metered way...
(Flat Rate Internet Access Call Origination) into its licence.
On June 10, 2001, at CUT's third annual general meeting, the committee members voted to dissolve the group, as they believed that CUT's objective—"unmetered telecommunications at reasonable cost in the United Kingdom"—had been met. The Register
The Register
The Register is a British technology news and opinion website. It was founded by John Lettice, Mike Magee and Ross Alderson in 1994 as a newsletter called "Chip Connection", initially as an email service...
cited CUT as "a major driving force behind the adoption of unmetered access in Britain", though it had said that CUT "would end up being a casualty of its own success" after helping to "turn [the telecommunications industry] on its head". Oftel staff also claimed that CUT's operations influenced policy-making at the body. Tim Richardson of The Register said, "Every single person who uses unmetered Net access in the UK is indebted to CUT. Make no mistake, CUT took on BT and won."