BT faces legal action over unbundling

Frustration at slow rollout of broadband services comes to a head as consortium threatens BT with legal action
Written by Jane Wakefield, Contributor

A consortium of businesses is to take legal action against BT over its slow roll out of broadband, ZDNet News has learnt.

Operators are becoming increasingly frustrated by what they see as unnecessary and deliberate delays to the roll out of broadband services. Unbundling of the local loop is widely regarded as the single most important factor in bringing cheap and competitive ADSL services to the UK but BT has steadfastly refused to budge from its July 2001 timetable, putting it head to head with the EC which wants unbundling to be complete by December of this year.

According to spokesman for business telco Fibernet Nigel Pitcher, the logical next step for operators is legal action. "BT has opened itself to a host of liquidated damages claims from the knock-on effect to businesses of not being able to provide services when they wanted to. We are talking to our legal team about it," he says.

The case is likely to revolve around the EC's regulation on unbundling which BT is currently flouting. If a company fails to comply with a directive this could be used as a lever in a civil action according to legal experts.

BT remains unfazed. "There may be a group clubbing together to take legal action but it is all hypothetical at this stage. We have to read the small print of the EC document and we are going through it now," said a spokesman.

Managing director of DSL services at KPNQwest Paul van Doorn believes there is a vast gap between the EC, BT and telecoms watchdog Oftel over the timetable for unbundling. "There seems to be a misunderstanding between BT and Oftel over the timetable but the EC is very clear that it should happen by the end of the year," he says.

Van Doorn is convinced that BT is falling behind the rest of Europe, not only because it is behind on unbundling but because it offers no alternative while telcos wait to get their hands on local copper.

"Europe is far ahead of BT. It is possible now to co-locate in Finland, Norway, Germany, Austria, Holland, Switzerland and Denmark," he says. According to van Doorn BT does not offer telcos such a service. "BT offers us a wholesale version but we don't want that. We want to take over the local copper and get rolling."

Oftel accepts that there is currently no co-location services in the UK but claims it is because voice calls have not been unbundled as elsewhere in Europe.

"A policy decision was made that local loop unbundling wouldn't take place for voice calls because there was sufficient competition in the voice market from the cable operators," says an Oftel spokesman. "Co-location is a key part of local loop unbundling for broadband."

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