Oftel publishes unbundled loop charges

UK telecoms watchdog Oftel has published the proposed costs for operators to gain access to BT's local exchanges, which could lead to cheaper broadband services for consumers.

The first exchanges equipped for BT's competitors to offer new high-speed services will be available in the new year. Oftel said the proposed charges will ensure operators have a clear idea of how much they will need to pay.

The regulator has proposed wholesale charges of £118 annual rental and £95 connection cost for a loop, the line from the exchange to the customer. The fee for internal tie cables, the cables that allow the connection between the unbundled loops and the operators' equipment, is proposed at £21 per year rental plus a £1433 connection charge for 100 loops.

Over recent months, both Oftel and BT have come under fire for stifling competition and growth in the UK telecoms market, and have been accused of lagging behind other European countries.

According to Oftel, the charges are in line with those set in other European Union countries. The monthly rental charge for an unbundled loop is 15 euros (£8.70) in Germany and Austria. In the UK the monthly rental fee has been proposed as 17 euros (£10) for a line transfer and 16 euros (£9.30) for a spare pair. Oftel said the pricing will enable BT to recover reasonably incurred costs plus a return on capital.

David Edmonds, director general of Oftel, said: "I am confident that these charges are at a level that will encourage competition in the provision of broadband services. They will allow other operators to provide new, higher bandwidth services to consumers at competitive prices."

BT has said it is looking at the proposals in detail, but said at first glance they appear to be "in line" with its expectations. "Our first view is that there is nothing in there that is a huge surprise and is in line with what we expected," said a spokesman. "We are going through the details and will formulate a more detailed response in due course."

Oftel has invited comments on the proposals by 4 December, with a further two weeks, until 18 December, for feedback. The watchdog intends to publish the final charges, which will be fixed until 1 April 2002, on 22 December to take effect on 31 December.