U.K.'s Oftel: Unbundling of Loop Can't Go Faster

LONDON (03/15/2000) - The unbundling of local network lines in the U.K. can not be completed before the July 2001 deadline, the Office of Telecommunications' (Oftel) Director of Technology, Peter Walker, said yesterday at the Beyond Networks industry conference here.

Walker was responding to recent calls by U.K. politicians and business leaders here and abroad for the government agency that regulates the U.K. telecom industry to push ahead the deadline imposed on British Telecommunications PLC for unbundling -- or leasing out parts of -- local network lines, known as the "local loop."

"Oftel is not holding back. In our judgment it is as fast as BT can go," Walker said.

Oftel determined last November that BT has a monopoly in the local network lines and directed the telecommunications operator to lease the local loop.

Furthermore, Oftel said BT must upgrade the local loop to handle new broadband digital services for faster Internet connections, to encourage competition.

[See "U.K. Regulator Tells BT to Open Networks," Nov. 30, 1999.]Saying that some of the calls for an earlier deadline were "political" in nature, Walker told conference attendees that BT needed time to set up computer systems that will run the new services. "We are certainly not delaying unbundling. This is a very challenging program," Walker said.

Oftel expects BT to "launch most of its ADSL (asymmetric digital subscriber line) product set" by June of this year, and testing of the unbundled loop will begin in the third quarter, Walker said.

"Mass market product has to be backed up by mass market process," Walker added.

In a speech last month, U.K. Chancellor of the Exchequer Gordon Brown called for the deadline to be moved ahead in order to speed up the U.K.'s emergence into the e-commerce market. [See, "Report: EU to Challenge Net Phone Charges," Feb. 28.]"This is not about trying to regulate IP or the Internet. Such claims are wide of the mark. As it is, Internet services are virtually fully deregulated in this country," Walker said.

Walker also argued that the industry had not expressed much interest in unbundling the loop when Oftel first proposed the idea in the mid-1990s or when BT first proposed an ADSL trial in London in 1998. "ISPs (Internet service provider) really weren't interested in working with BT on the trial," Walker said.

Conference attendees in the audience were quick to disagree with Walker. When asked by panel moderator and Analysys Ltd. managing director David Cleevely whether anyone in the audience was frustrated by the pace of unbundling, a number of people in the room raised their hands.

Colin Williams, executive vice president of global services and systems at network infrastructure and communications provider Level 3 Communications Inc., was even more blunt. "Though it is not your personal fault, Peter, this had been a major regulatory failure," Williams said.

Peter Radley, chief executive of the U.K. division of telecommunications manufacturer Alcatel SA, was also critical of Oftel's lack of vision and leadership when it came to unbundling the local loop. "The evidence was there and this is a European issue. I'm sad that we are behind the ball," Radley said.

Walker remained unmoved by the executives' comments. "I would say things have moved dramatically," Walker said.

BT can be reached in London at +44-171-356-5000 or at http://www.bt.com. Oftel, in London, can be reached at +44-171-634-8751 or at http://www.oftel.gov.uk/.

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