Oftel accused of bungling the unbundling process

World Online becomes beleaguered watchdog's latest critic

In a strongly worded letter to Oftel Tuesday, World Online lays down a challenge to the telecoms regulator -- sort out the unbundling fiasco or face the wrath of the industry.

The unmetered telco is the latest operator to criticise unbundling. It has made no secret of the fact that its unmetered narrowband service is a stepping stone to broadband and has applied to become one of the operators allowed to colocate in BT's (quote: BT) exchanges. Local loop unbundling -- in which BT's local telephone exchanges are opened up to other operators -- is timetabled to be in place by July 2001 and is widely seen as the only way of guaranteeing a competitive and open market for broadband services.

The first stage of local loop unbundling -- announced by Oftel last week -- is to decide which operators are going to be allowed to colocate in the first 361 of BT's unbundled exchanges. It is this which has angered World Online. Head of regulatory affairs at the telco Rachel Basger claims Oftel has "bungled" the process by failing to open up the most popular exchanges. "The least popular sites have been selected and Oftel has deliberately excluded the most popular ones because they weren't happy with the selection criteria," says Basger.

"We have written to David Edmonds [director general of Oftel] asking him to pull his finger out and sort it out," she adds.

In an interview last week, Edmonds accepted some blame for the tardiness of unbundling but Oftel rejects World Online's criticism. Instead the watchdog blames industry bickering for its decision to open up the less popular exchanges first. "Industry was unable to decide on a fair basis which operators should go into which exchanges," says an Oftel spokesman. "Up to thirty operators wanted access to some exchanges and that is just not feasible." Oftel is currently working on an allocation procedure for the rest of BT's exchanges but claims it will take "some time".

Basger counters that it should be part of Oftel's job to "work out a better system" and claims that by holding back the most popular exchanges the watchdog is playing directly into BT's hands. "BT now has the chance to run away with the customers in these more popular exchanges. There will be no competition and the consumer will suffer," she says.

World Online is not the only telco unhappy with the unbundling process. As reported by ZDNet News in July, a consortium of rival telecoms operators -- increasingly frustrated with the slow roll out of DSL services -- have threatened legal action against BT if the unbundling timetable is not speeded up. They have a found powerful ally in the European Commission, which has made it clear it wants European incumbents unbundled by the end of this year. Governments are due to vote in November on whether they will incorporate EC proposals on unbundling into domestic law.

Phil Evins, managing director of the European Competitive Telecommunications Association (ECTA) is hopeful that pressure from the EC will see the timetable moved forward. He also has every sympathy for operators' complaints about the process. "We need to have a transparent process. At the moment it appears that BT offers something and Oftel says yes. All 600 exchanges should be up for grabs and an independent consultant appointed to make sure the process is neutral," he says.

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