BT in the clear over local loop unbundling

Germany, Greece and Portugal face action for not achieving enough shared access to the local loop, but BT is off the hook

The European Commission signalled last week that it is happy with the progress of local-loop unbundling in Britain, as it announced it was taking action against three other member states.

Germany, Greece and Portugal are all accused by the EC of failing to make sufficient progress in creating shared access to their local loops -- the part of the telephone network that links individual houses to local exchanges. The decision follows ongoing monitoring of local-loop unbundling, and suggests that BT is fully adhering to the EC's unbundling regulations -- despite the criticism that it often receives over broadband takeup in the UK.

BT was unable to make an official comment on the EC's decision at the time of going to press, but the company is understood to be pleased that it is not being blamed for the fact that very local loops have been unbundled yet in the UK.

LLU allows a rival operator to install its equipment in local exchanges and offer wholesale telecoms services -- such as high-speed DSL Internet packages -- in competition with incumbent telcos.

According to recent figures, only around 160 of Britain's local loops had been unbundled. BT has been accused of deliberately obstructing LLU in order to maintain its dominance of the sector, but it denies this charge. It claims that the slump in the technology sector has made it much harder for rival operators to raise the investment needed to compete against its wholesale division.

The EC's decision to take action against Germany is surprising, given that the country is often held up as an example of successful broadband rollout. According to the EC, though, there is little connection between the Germany's 1.2 million broadband customers and LLU.

"Even though a significant number of local loops have been fully unbundled, the great majority are used not for the provision of high-speed access, but rather for voice telephony," said the EC, in a statement, explaining the reasons for taking action against Germany. According to the EC, incumbent operator Deutsche Telekom owns virtually 100 percent of Germany's DSL lines, giving it a monopoly.

In the UK, the lack of unbundled lines is blamed for the fact there are only around 100,000 ADSL users -- but according to BT the German statistics contradict this view. "It dispels the myth that progress on unbundling is the reason behind their success. I think this simplistic argument has had its day," said one BT insider.

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