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Ensuring that the UK has effective wholesale broadband competition is a key challenge for the coming year, AOL says.

Addressing the ISP Forum in London yesterday, David Carr, AOL UK VP of broadband, said the lack of wholesale ADSL competition is holding back the industry.

"2003 was a fantastic year for the UK's broadband industry," he said. "But we want to see wholesale competition delivered this year."

He pointed out that improved competition in the UK's dial-up market has already proved that competition worked and could lead to a "vibrant" market.

"I want to see the same level of competition in the broadband market," he said.

He welcomed a recent parliamentary report by MPs which found that the UK lacked effective wholesale broadband competition. But he remains cautious about the impact which communications regulator Ofcom might have on wholesale competition.

"Ofcom are untested," he said, "although they're certainly making positive noises. And we were encouraged by the Trade and Industry Select Committee, which supported our call for wholesale competition."

Ramming home the need for reform, Mr Carr also said there was little impetus on BT Wholesale to provide efficient operations while the UK's incumbent telco remained unchallenged.

This means that other costs (excluding rental) such as migrating punters to other services or moving lines placed an additional burden on IS overheads.

Describing customer support costs as currently "not sustainable", he admitted that these are "higher that we had anticipated" and remained a challenge, both for AOL and the industry.

Despite this, Mr Carr remained upbeat, claiming that there was still plenty of demand for broadband in the UK, although the market has now moved from the early adopter phase into the mass market.

And while plenty of people were aware of high-speed Net access, more still needed to be done to educate people about the benefits of broadband, he said. ®

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