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BT faces fines over local loop unbundling

Oftel appears to have had enough of the delays in local loop unbundling, and is proposing that BT starts paying compensation
Written by Graeme Wearden, Contributor on

Telecoms regulator Oftel has decided that it is unacceptable for BT to further delay access to the local loop — the part of its network that links individual homes and offices with a local exchange.

Under the proposals, if an operator requests access to a BT exchange to install its equipment, BT will have to pay £80 for every working day's delay. Once the operator has installed its equipment and has orders from customers, BT will face a further £10 fine for each day it delays connection of a single local loop. Each house will typically account for one local loop connection, but businesses could have several each.

Details of the proposals were released on Thursday as Oftel published its draft declaration on service level agreements for local loop unbundling. Interested parties have until 20 September to respond to the proposals, which are expected to come into force by 5 November this year.

The fines are unlikely to make much of a dent in BT's balance sheet, leading to suggestions that they will have little effect. According to Oftel, the intention is not to hit BT with punitive damages. "These figures are based on estimates of the likely loss to the operator," an Oftel spokeswoman explained.

In response, BT claimed that it was exceeding its current service level agreements with Oftel over local loop unbundling. "We're looking into the details, but we don't anticipate paying out huge sums," a BT spokesman told ZDNet News.

Oftel has been criticised in the past for the slow progress in local loop unbundling, but it seems to have decided that a more pro-active stance is needed with BT.

"It is clear that Oftel intervention is required to ensure that BT offers satisfactory service level agreements," said David Edmonds, Oftel director general, in a statement. "The revised contract I am proposing is designed to achieve this. Consumers will benefit because operators can now guarantee timescales for delivery of service and fault repair."

Local loop unbundling will allow rival telecom operators to install their equipment in BT's local exchanges. For example, it would let them operate their own broadband services rather than buying wholesale ADSL capacity from BT. BT has been accused of slowing down local loop unbundling in an attempt to ensure the commercial success of its own broadband packages -- something it has consistently denied.

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