EC will force BT to unbundle by year end

EC orders British Telecom to unbundle the local loop half a year before schedule

The European Commission goes head to head with BT (quote: BT) Wednesday, forcing the telco to unbundle the local loop six months ahead of its planned date.

Unbundling of the local loop is widely regarded as a key milestone to end domination of the telephone infrastructure by Europe's incumbent operators and ensure the roll out of broadband is fairly priced and competitive. The EC has long preferred a December deadline for unbundling. Heads of government -- including Tony Blair -- signed up to this at the Lisbon summit earlier this year.

Despite this BT has always said its July 2001 deadline is the only feasible date for unbundling, claiming it is not technically possible to bring this forward. The latest move on the EC's part puts the weight of law behind its argument.

"It has been changed to a regulation which will require all member states to unbundle their loops by the end of the year," explains Per Haugaard, spokesman for Errki Liikanen, commissioner for the Information Society in Europe.

Haugaard is convinced that a December deadline for unbundling is crucial. "It is very important that this bottleneck be removed. Local loop unbundling will have a dramatic effect on prices," he says.

While the EC regards its tough line on unbundling as a victory over regulators and incumbents, Oftel is playing down the annoucement. "The EC is not looking for consumer products to be released in January. This is just the framework for unbundling which we will achieve by December. Product is still very much a July deadline," says an Oftel spokesman.

Oftel's relationship with the EC has been strained recently as the Commission questions its response to complaints. The EC is formally investigating the watchdog for taking too long to respond to anti-competitive complaints in the mobile market and for failing to implement alternative services to BT in the fixed market.

BT also remains tightlipped on the issue of unbundling but appears to be sticking to its guns. "We've agreed the [July] timetable and it has been agreed by all parties," said a BT spokesman.

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