Freeserve ‘committed’ to unbundling local loop

Wants to 'sever reliance on BT' for broadband

By Tim Richardson, 13th February 2004

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Freeserve is prepared to put its full weight - and the financial muscle of its parent, Wanadoo - behind local loop unbundling (LLU) in a bid sever the ISP's reliance on BT for broadband.

The Register has learnt that Freeserve is so committed to the idea that it could even be in the market to buy an operator - or at least enter a joint venture with a telecoms partner - to make LLU work.

A senior spokesman for the ISP declined to be drawn on these market whispers. But he did confirm that Freeserve is convinced that LLU - which enables rival operators to provide telecoms services direct to end users - is the way forward if the UK wants effective broadband competition.

This was confirmed in a letter to the Trade and Industry Select Committee (TISC), which earlier this week published its report into the UK's broadband market.

Wrote Freeserve General Counsel David Melville: "Freeserve, with over 2.6 million subscribers, would be prepared to invest in LLU provided access costs significantly decrease in line with the rest of Europe."

A senior spokesman for the ISP denied this was an exercise in "kite flying", insisting that LLU, which has been branded a failure in the UK, was a strategic issue and something it took seriously.

According to Freeserve, one of the reasons why the UK only has around 8,000 unbundled lines (compared to 300,000 in France) is that the cost of LLU is simply too high in the UK.

In Europe, the average set-up fee for a fully unbundled line is €60 while monthly fees are just €11. In the UK, though, the set-up fee is more than double at €126, while monthly fees are €15.

If the cost of LLU can be cut, and if safeguards are put in place to ensure that BT would be able to handle the mass-market roll-out of LLU, then Freeserve insists it is prepared to make the necessary investment.

No doubt it hopes Ofcom will share its view when the communications regulator carries out a review of LLU later this year.

Earlier this week, a parliamentary report found that the UK did not have effective competition in the broadband market. Freeserve believes LLU would address that imbalance.

A senior spokesman for Freeserve told The Register: "It is impossible to compete with BT when BT controls the entire network. LLU will allow us to sever our reliance on BT."

Earlier this month, Freeserve said that the ISP was planning to make a big push for broadband in 2004. "This is the year for broadband for us - we're going for it," said a spokesman. ®