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Oftel finally gets to grips with local loop

Pulls finger out, wipes egg off face

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Oftel, in a face-saving exercise, has unveiled "four further measures" to promote local loop unbundling. It is a hearty but pathetic attempt to deflect criticism of the telecoms watchdog's role in opening the market up to competition. The failure to do so is a national embarrassment.

Not only was Britain one of the last countries in the world to allow competing telecoms companies direct access to consumers, but when Oftel finally plucked up the courage to tell BT to do so, it cocked it up royally.

Rather than simply insist that BT allows other companies to install their own equipment in exchanges for a set fee, Oftel buckled under BT's "arguments" again and has enabled the former monopoly to protect its territory for a further six months.

These four measures run as follows:

  1. Following an operator's request, a requirement on BT to install operators' equipment in any operational part of a BT exchange. Operators consider that co-mingling, as it is known, could lead to significant savings on costs and time for installation of equipment. [So, basically, BT was refusing to let competitors install their gear in vital parts of the exchange.]
  2. A prohibition on BT from charging separately for site clearance when preparing co-location spaces in its exchanges. Costs will be recovered through the market rent BT charges operators for co-location space. [So, basically, BT has been making hidden charges to screw up competitors' business plans and make installation less economically viable.]
  3. Detailed guidelines on the co-location facilities including space that BT is obliged to provide and how BT should assess the availability of these facilities for other operators' use. [So, basically, BT was saying it didn't have room in its exchanges when it clearly did.]
  4. Prices for shared access to BT's local loop. Shared access enables operators to concentrate their business on the provision of high speed services to consumers without providing a voice calls service. Oftel is proposing an annual rental of £68 and connection charge of £127 per shared loop. [So, basically, BT was insisting that everyone install voice with their data equipment - something that is completely pointless for small companies aiming simply at providing Internet access.]

The overwhelming question has to be: Why the hell didn't Oftel try to prevent this before the process kicked off? It is the telecoms watchdog for chrissakes and it knows BT's tactics better than anyone (or should do). This announcement is little more than a statement of gross professional misconduct on the part of Oftel.

It is also an indication that Oftel's passive approach ("we will only investigate when we receive a complaint") is completely hopeless when it comes to an important competitive market. Ofcom can't come too soon.

Headboy of Oftel and career civil servant David Edmonds gave his usual inspiring take on events: "In response to operators' requests Oftel proposes that, subject to certain safeguards, they should be able to install equipment in any operational area within BT exchanges. Oftel now intends to reduce BT's charges for shared access to the local loop for operators that only want to provide a DSL service without voice calls. We believe BT's proposed charges are too high and do not accurately reflect the costs incurred."

And then the excuses: "Although Oftel, BT and the industry have worked hard to put in place the process for local loop unbundling, the number of sites where operators have installed equipment is less than originally anticipated. The main reason for this is less demand from operators than forecast. A key factor in this has been the adverse financial climate. Some operators also decided not to pursue unbundling as a way of providing high-speed services to their customers."

And more excuses: "Local loop unbundling is one of the most complex pieces of regulation that Oftel has undertaken in recent years, as it has proved to be in all countries where unbundling has taken place. Oftel has put the process in place and will ensure that the rules are complied with. Operators must make their own commercial decisions over whether unbundling is the route they wish to use to provide high speed services to consumers. These latest measures announced today by Oftel demonstrate our commitment to provide an effective, cost-orientated unbundling process that meets the needs of operators." ®

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