Oftel acts to put unbundling back on track

Will watchdog's terms and conditions be enough to attract operators back to unbundling?

Oftel asserted its determination to sort out the unbundling process today, publishing improved terms and conditions which it hopes will get the process back on track.

The watchdog was forced to intervene in unbundling of the local loop, following in-fighting between BT and rival operators. The process, seen by the European Parliament as a crucial part of opening up telephone networks across member states, has reached crisis point in the UK with nine out of the 27 original operators withdrawing.

Now BT will be forced to meet service level agreements and will have to pay immediate compensation if these targets are not met. Operators will be able to refer disputes to an independent expert under a new dispute resolution procedure. Finally, operators will be allowed to trade space with each other if they over-order.

Director general of Oftel David Edmonds remains upbeat about the unbundling process, saying operators "are now placing firm orders for unbundled loops" but analysts believe only around ten operators will end up offering unbundled services.

Oftel will not get off the hook lightly. The watchdog is facing scrutiny from the European Commission if it fails to get the unbundling process back on track. The EC is currently questioning UK companies about their experiences of DSL rollout and unbundling. Oftel also faces the wrath of the ISP industry as Freeserve and AOL demand it investigate whether BT is offering more ADSL installations to its own ISP BTopenworld than to other ISPs.

ISP industry group ISPA has also now joined the chorus of disapproval against Oftel, saying it must act swiftly. "We urgently call upon Oftel to use [its] powers to demonstrate it is able to provide effective regulation for the benefit of consumers and competition and to bring an end to practices by BT which threaten the development of broadband Britain," said an ISPA spokesman.

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