A Year Ago: Oftel says July 2001 'delay' won't affect UK

First published: Tue, 30 Nov 1999 15:30:21 GMT

No unbundling of the local loop till July 2001, says Oftel, Britain can play catch up...

Telecoms watchdog Oftel announced Tuesday that it requires British Telecom to unbundle its local loop by July 2001. During a Q&A at Oftel headquarters in London, the watchdog conceded the timeline represented a "delay" but that the UK could "catch up" with its European neighbours.

The requirement for local loop unbundling will be set out in a new licence condition for BT, according to Oftel. The timetable for giving other operators access to BT's local loop is set out in the statement 'Access to Bandwidth: Delivering Competition for the Information Age' published Monday.

Speaking to journalists, David Edmonds, Director General of Telecommunications at Oftel, described BT's move towards unbundling as "delayed" but denied Britain would suffer any long term damage as a result. "The disadvantages to the UK are minimal," Edmonds says. "We support the government moves to make Internet access universally available, and the UK is not very far behind. In certain instances we are actually ahead of our European competitors".

Edmonds stressed that if BT was able to unbundle the loop earlier than the July deadline, Oftel would ensure it did so. "We are working very closely indeed with BT on this and have direct contact with the two working groups involved. We are actively participating with these working groups to ensure the timetable is adhered to."

Edmonds says Oftel is using a representative of the telecomms firm MCI Worldcom "to ensure the right systems are in place" and that they are delivered in a "timely and appropriate manner". Worldcom has agreed to discuss Oftel's announcement with ZDNet later today.

While Oftel defends its decision, analysts suggest the watchdog has been duped on the technical complexities of unbundling the loop. "I think that BT has managed to convince Oftel that it would be very difficult to upgrade its equipment." Says Susen Sarkar, Senior Analyst, Yankee Group Europe. "And BT could reasonably argue that because this is a new service, they have to put in all the new equipment to do the complete unbundling." If the watchdog has been duped, it is guilty, says the analyst, of not acting on central government's promises.

Patricia Hewitt, the UK's recently appointed e-minister has made no secret that she wants cheaper access for Britain, but until the loop is unbundled, competition cannot flourish, which gives BT a free run. Sarker thinks Oftel should have made BT unbundle the local loop faster. "I would have liked Oftel to have pushed for an earlier date, I am disappointed by this," he says.

While BT has been vocal in its criticism of Oftel's preference for opening up its network to other operators -- describing it as tantamount to handing over the keys of its exchanges to others -- it accepted the decision. However a BT spokesman warns that consumers may lose out, with operators cherrypicking only the most densely populated areas for ADSL links. "Theoretically what is to stop operators choosing just to provide ADSL services in populated areas with a large number of customers at low cost and say 'we don't care about anyone else'," he says.

BT favoured the unbundling option which would allow it to keep control of the infrastructure and merely hand on control of customer service and content to other operators. The spokesman believes that nationwide ADSL services can only occur with BT at the helm. "We would build a national network, covering 90 percent of households. The fact that we are everywhere means that we can provide ADSL regardless of where you live," he says.

But Edmonds, perhaps a little agitated at the constant barrage of questions painting Oftel as an insipid regulator, said the path to unbundling was a "tough, tough task" and that expectations for anything earlier than July 2001 are not technically feasible.

Key Points:

  • All telecoms operators will be able to interconnect with BT's network and will be able to upgrade BT's lines with their own equipment.

    BT wants this to be opened so it can access other operator's loops.

  • No restrictions on types of services telecoms operators will be able to provide over BT's network across UK.

  • Oftel will set the price for use of BT's local loop based upon the costs incurred by BT, plus a mark up.

    During the press conference a figure of £300 a year for ADSL came up. David Edmonds, Director General of Telecommunications at Oftel said that figure would probably be a "low estimate".

  • Reinforcing arrangements for access rights to BT's network a new condition will be inserted into BT's licence covering the types of services and the terms and conditions by which they will be made available to BT.

  • As BT upgrades its lines with the new technology, it will provide wholesale access to other operators on same terms as its own in-house service providers.

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