Oftel rings changes with unbundled BT loop

Oftel ruled last week that BT has to open up its local loop to rival telecom operators - in effect ending BT's virtual monopoly in delivering broadband services to the home.

The ruling is an attempt to kick-start the delivery of broadband services to the home and small businesses, in particular ADSL (asymmetric digital subscriber line).

BT has been accused of holding back ADSL through a combination of delays and high pricing, to protect its ISDN and leased line businesses.

Oftel has gone for a 'twin-track' approach to opening up the loop, allowing rival operators to run their own content over BT's upgraded network, as well as putting their own equipment on the telco's local loop.

Out with the old, in with the new
Although unbundling is not due to happen before July 2001, the opening of BT's local exchanges to rivals is significant. BT is very protective of its networks and wanted to keep control of exchange equipment. The industry has until September 2000 to sort out technical issues.

"BT should be clearing out its old exchanges to make sure there is room for new switching equipment," said Jo Upward, head of regulatory affairs at Energis. She is concerned that BT will find ways to block rivals that want to install their own switches in its local exchanges, following unbundling in the US.

Security will be a huge concern to BT, according to Ovum's principal consultant, Tony Lavender: "It will want to vet staff from other telecom operators before they get access to the exchanges."

Oftel director general David Edmunds, however, said rival ADSL operators are large, reputable companies that BT should be able to work with.

Trouble on the line

Interference in the copper bundle when dealing with different types of data being transferred and different switching systems from several telcos is also a problem, according to Upward.

Energis and others, such as Colt, Scottish Telecom and MCI WorldCom, have also been critical of the unbundling timescale. Over the next 18 months, they say, BT can continue to dictate the take-up, pricing and control of ADSL delivery.

By March next year, BT said it will have installed ADSL switches in 400 exchanges. It is also undertaking large ADSL wholesaling deals with big ISPs such as AOL and Virgin. BT says it will make ADSL available to six million potential customers by March, and that 70 per cent of the country will be covered by 2001.

Meanwhile, BT has gone on the counter-offensive. UK head Bill Cockburn says the unbundling decision "only did half the job" and that if cable rivals have access to the BT local loop, then BT should in turn have access to their cable networks.