Industry approves Oftel's unbundling price

Oftel takes next step in the controversial process of opening BT's network

Reaction to Oftel's prices for local loop unbundling is one of cautious welcome Friday.

The telecoms watchdog announced Wednesday it would enforce a ceiling of £250 on the price operators will pay to take over one customer's line. Together BT and Oftel have agreed an annual rental charge of £105 and a £145 one-off connection fee to make up the total cost.

The final price will not be announced until December but the watchdog insists its £250 ceiling is an appropriate figure. "Oftel intends that the final wholesale prices to operators should be set at a level which will encourage competition in DSL services while preserving the incentive for investment in alternative networks such as cable and wireless local loop," says Anne Lambert, Oftel's director of operations, in a statement.

Oftel's handling of the local loop unbundling issue -- which is widely regarded as crucial to the development of broadband services in the UK -- has come in for harsh criticism. Slow to set the ball rolling on unbundling, the European Commission has in recent months intervened and called for its original July 2000 deadline to be moved to January of next year.

There is still a great deal of argument between the regulator and the EC, the latter claiming services should be in place by January and Oftel saying that the legal framework will be complete but services will not roll out until July.

WorldCom, which successfully petitioned Oftel to force BT to roll out a wholesale version of its unmetered narrowband service SurfTime, believes the pricing for unbundling is fair. "We are looking at the figures in the context of other member states but basically we are happy with them," says a WorldCom spokeswoman.

One of BT's staunchest critics, AOL, is also giving the price a cautious thumbs-up. "The price that Oftel puts as a ceiling is the maximum it will cost. The important thing to remember about unbundling is that we are getting competition and competition has one influence which is to drive prices down," says an AOL spokesman. "The figure should be viewed as the top level and we should have faith in the process of competition to bring prices substantially below that level."

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