Ofcom reveals prices for LLU

'Rearranging the deckchairs'

The UK took another step closer towards greater competition in the telecoms sector after Ofcom published its final pricing proposals for Local Loop Unbundling (LLU).

The monster communications regulator reckons that connection and rental charges for shared access should fall by around 70 per cent - which is broadly in line with price cuts already announced by BT earlier this year.

In April, Ofcom chief exec Stephen Carter hinted that the regulator would act to make LLU more attractive to rival operators in a bid to bring genuine wholsale competition to the UK. Two weeks later and the UK's dominant fixed line telco announced plans to slash the cost of some LLU products by up to 70 per cent as part of a phased series of cuts.

One industry insider told The Register that so far few surprises had been uncovered in Ofcom's complex document published today. "The LLU charges payable are in line with what BT announced earlier this year. Ofcom's proposals have just rearranged the deckchairs, that's all."

Although subject to further consultation, it's expected that the new prices will be formally introduced in December. If the regulator's numbers are correct, it should provide enough incentive for rival telcos to install their kit in BT exchanges to provide services direct to homes and businesses.

A spokesman for BT said: "Although this is aggressive, it is broadly in line with our expectations. We're not unduly unhappy about this."

Despite its committment to see prices come down, Ofcom today sounded a note of caution that it would take the cooperation of BT and the industry to make LLUs work.

Said the regulator: "Although Ofcom can determine the framework, it is the commitment of BT to make it work; and the commitment of the competing operators to invest, that will decide the range and reliability of services, their price, and hence their attractiveness to residential and business customers. That in turn will determine the success of Britain's broadband take-up."

Nevertheless, Video Networks, one of the few companies offering unbundled services at the moment, welcomed today's announcment. Said chief exec, Roger Lynch: "Today's announcement from Ofcom is yet more good news for the UK broadband market and builds on the steps taken by BT in May. This proposed price reduction will help the UK increase it's rather low number of unbundled local loops, bring new services to consumers such as innovative video-on-demand and also ensure the market remains competitive and dynamic." ®

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