BT, Microsoft, and Dell: Broadband revolutionaries?

Yesterday, BT and Microsoft made a big hoo-ha about their new broadband alliance. Britain's incumbent telco and the software giant are to contribute development teams to work on some 30 projects, covering areas such as mobile technology, web services, broadband portals and multimedia home computing.

And then today, Dell trumpeted that it too had joined the BT broadband party. The world's number two PC maker will market BT Retail's 'no-frills' broadband offering to home users, and BTopenworld business broadband to small and medium sized enterprises.

Dell will be targeting its existing and new customers who, whether buying online or over the phone, will ultimately have an 'add BT Broadband' option as they configure their PCs.

All very exciting in a land where broadband is still not a mass market phenomenon.

But just how exciting? Well, for a start we don't know precisely what BT and Microsoft are working on. One well-placed industry source told silicon.com that a lot of these projects are not really new, and that the timing of the announcement - just one day before BT's results were tipped to show disappointing broadband uptake numbers - was a tad suspicious.

And then there's the Dell deal. AOL had an exclusive, 12 month deal with the PC seller - but the exclusivity of that arrangement ran out recently, leaving Dell free to sign up whomever it likes. BT has joined AOL, with more ISPs almost certain to follow.

Moreover, this is not exactly a done deal. Even Dell stressed that the service, while enabled by Dell's build-to-order model, is not yet fully set up.

And there's more. Why is BTopenworld offering a service to SMEs, while BT Retail is the chosen one to target home users with its BT Broadband package, when BTopenworld has its own broadband offering?

Again, the sceptics among you might like to look at that in the context of today's financial results announcement, which showed pretty disappointing sign-up stats for BT Broadband. And did someone say brand confusion? The rumour mill will return once again to the thorny issue of a possible merger between BT Retail and BTopenworld. But that's another story.

To sum up, the BT/Dell deal is not revolutionary, nor is the BT/Microsoft pact - but the latter could be worrying. BT has a monopoly over the local loop; Microsoft has a virtual desktop software monopoly. It can also provide some of the 'frills' that BT's no-frills package lacks (email from Hotmail, content from MSN, for example, all based on .Net web services technology).

Microsoft will (presumably) charge for such things, making the 'cheap' BT Broadband access-only package more expensive than rival offerings from the 'traditional' ISPs. Which means there's not much in it for the consumer, and before you know it you're locked in to the biggest telco in the country and the biggest IT company in the world.

But the danger is that the combined marketing clout of BT and Microsoft will pull the eyes over the unwary and do a lot of damage to the smaller ISPs in the UK in the process. It's up to Oftel (and then Ofcom) to keep an eye on this. Let's hope the new regulator isn't afraid of a scrap.