Ofcom orders BT price cuts for broadband rivals

'Significant operational problems' hamper LLU

By Tim Richardson • Get more from this author

Posted in Telecoms, 16th December 2004 12:31 GMT

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Communications regulator Ofcom has confirmed a new set of charges today that will form the basis of local loop unbundling (LLU) in the UK. Ending a seven-month consultation into LLU which has seen charges for rival operators come down by as much as 70 per cent, it should pave the way for other operators to invest and provide alternative wholesale services direct to customers.

The new charges come into effect from January 1.

As well as bringing down price, BT has also been forced to address its own cack-handed internal processes that make LLU so laborious and time-consuming for rival operators.

Said BT Wholesale exec Paul Reynolds: "BT has worked productively with the [LLU] Adjudicator and the industry to develop suitable processes. Together with this package of price changes we believe the right climate has been created to develop a market in which those who are willing to innovate and invest can reap appropriate rewards."

Which is curious. Four years ago there were a number of companies around prepared to invest in LLU. Except BT dragged its feet, argued the toss for every square inch of ground and refused to budge on its high charges and made life so hellishly difficult. Oftel, Ofcom's predecessor, described the process as being like "trench warfare" before conceding it was "a painful and often miserable process".

This year's price reductions have only come about because of meaningful threats from the regulator.

And on Reynold's insistence that BT has "worked productively with the [LLU] Adjudicator and the industry to develop suitable processes", the 'LLU Czar' said just three weeks ago: "Significant operational problems remain". That's right, not minor, but "significant operational problems remain".

Despite BT's tardiness, some operators are willing to invest in LLU. EasyNet has just unveiled a wholesale unbundled service for telcos and ISPs, while Wanadoo UK has started ordering LLU lines from BT. ®