Unbundling will bring cut-price broadband

Local loop unbundling will slash DSL prices but BT is deliberately delaying it to maintain competitive advantage according to rival telco Fibernet.

Fibernet is set to take over DSL services in Leeds as a result of unbundling. It is one of the fourteen DSL triallists selected by Oftel to offer new services from January next year.

According to Fibernet's marketing director Nigel Pitcher, unbundling the local loop is the only way of bringing down the cost of DSL services. "It will reduce the cost of the last mile connection and make broadband available to a much wider audience," he says. "As soon as the local loop unbundles, access to BT's lines will be a fifth of the current price," he predicts.

The story of unbundling has been fraught with controversy since Oftel agreed to BT's July 2001 deadline despite calls from industry to bring this date forward. The unbundling issue has won few friends for BT in government either and another spat between the two looks set as Tony Blair and other European leaders call for a December 2000 deadline for Europe-wide unbundling. An agreement to that effect was signed in Lisbon last month.

BT has argued that the timetable cannot be moved from its July 2001 date. In a recent interview with ZDNet News, BT's Angus Porter claims the government has got it wrong. "I am aware that Tony Blair is very keen to bring the timetable forward and unbundle the local loop as soon as possible and we are happy to debate that," he says. "But we have responsibility as guardians of the network to ensure it is done properly."

Porter sticks by the July date and claims the government did not consult BT before signing the Lisbon agreement. The government denies this. "Obviously we talk to industry all the time and ask industry constantly on these matters," says a Number 10 spokesman.

BT has long claimed the technical complexities of opening its exchanges to other operators mean a July date is the only practical option. Fibernet has representatives on two committees set up by telecoms watchdog Oftel to look into BT's claims that technical complexity and spectral management (interference issues) mean the delay must remain.

Pitcher dismisses both of BT's objections. "It [the unbundling timetable] is absolutely practical to be brought forward. The technical frailities BT talk about to the working parties can best be viewed as delaying tactics," he says. "Every day they can hold out is giving them competitive advantage. Because of the delay competitive nations are stealing a march on UK businesses."

BT has had to follow the dictates of an ignorant stock market, like so many other corporations, and is splitting off its Internet business so that shareholders can buy shares in that sector. Go with Guy Kewney to read the news comment.

What do you think? Tell the Mailroom. And read what others have said.