Ofcom forces access revolution at BT

By Alun Williams

Posted on 23 Jun 2005 at 14:49

BT is promising 'equality of access' to its local network in a bid to satisfy Ofcom and demands for clearer regulation of telecoms. The two main players in the British telecoms arena have agreed a new approach to regulation for landline telecommunications.

The central goal is to ensure equality of access to those parts of the fixed telecoms network which BT's competitors cannot replicate.

Under the regulation, BT is signing up with Ofcom for 'Equivalence of Input' for key products and services. Under this initiative BT is committing itself to ensure all operators have access to the same products, prices and processes.

More specifically, a new BT business unit (see below) will offer a universally available product and service set. These include: Local Loop Unbundling (LLU) products (both fully unbundled loops and shared loops, where BT Retail continues to provide voice services and another provider is responsible for broadband); all forms of Wholesale Line Rental (WLR), where a provider takes responsibility for all voice services and provides a single bill for both line rental and calls; and backhaul products, which are used to connect the local access network to the core network.

'We believe these proposals have the potential to encourage more sustainable competition, more services, lower prices and greater consumer choice,' said Ofcom Chairman David Currie.

'These proposals are substantially different to traditional telecommunications regulation. They demand significant changes in key areas, and recognise that in other areas regulation can be rolled back,' added Ofcom Chief Executive Stephen Carter

You can find the full Ofcom statement on its website.

In conjunction with the announcement, BT has announced a number of service charge changes - see Ofcom and BT agree to price cuts pushing LLU.

BT originally submitted proposals in February - BT promises to give competitors equal access to its local network - in response to Ofcom's Strategic Review of the telecoms market.

In that document, Ofcom shied away from the break up of BT but said that the telco would need to take further action to accelerate local loop unbundling (LLU) and provide competitors with a level playing field.

BT's response is the creation of the new business unit - Access Services - to help provide 'transparent and equal access' to the nationwide local network. This unit will be monitored by an Equality of Access Board (EAB), which will have a majority of independent members appointed in consultation with Ofcom, although two of the five will be connected to BT.

Carl Symon, one of BT's independent non-executive directors, is the chairman designate of the Board.

Today BT has revealed more details about the operation of this unit: it will have its own headquarters, distinct brand, have around 30,000 staff and be established within months.

Northern Ireland will not fall under these jurisdictions; BT requested that given its small market size, it should be exempt from the agreement.

According to BT chairman Sir Christopher Bland: 'This has been a tough journey but it is important that we have regulation that encourages investment and innovation. The proposed settlement strikes the right balance and every player will benefit from the certainty and clarity it provides.'

The idea is that regulation will more focused on key areas, such as the Access Services unit, and rolled back elsewhere. 'It is time to draw a line under twenty years of micro-regulation and to welcome a new era where regulation is focused where needed and rolled back elsewhere,' said BT chief executive Ben Verwaayen.'