Telecoms regulator Ofcom has backed local loop unbundling as the route to achieving the goal of Broadband Britain.
But it says it may take until the end of the decade before the UK catches up with other countries when it comes to providing services such as video-on-demand.
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Ofcom’s predecessor Oftel opened up the market to local loop unbundling (LLU) in 1999 when BT launched its first ADSL services, but since then less than 0.03% of all phone lines in the UK have been unbundled to work on infrastructure supplied by BT’s rivals - around 9,500 lines out of 35 million. The snail’s pace of unbundling has slowed down the adoption of broadband in the UK.
Those few companies in the UK that have used LLU have also concentrated on inner-city areas, leaving rural areas further behind when it comes to broadband access.
In a report published 6 July, Ofcom said large-scale LLU will lead to the widespread availability of higher bandwidth services like video conferencing and will allow voice over broadband - the making of free internet voice calls over a DSL line without having to pay for a separate voice telephony service.
Ofcom believes voice over broadband will be widely available in three to five years' time, but says the long-predicted video-on-demand over broadband will not be widely available until the end of the decade.
To force through its plans, Ofcom has also appointed a telecoms adjudicator. Peter Black, who has worked for BT, Thus and NTL has the independent role and he will mediate in LLU disputes between BT and its rivals.
Ofcom chief executive Stephen Carter said, “We welcome BT's commitment to making this process work, and we welcome the fact that 12 of the most significant companies have signed up to the independent adjudicator scheme - we hope this drives growth in the future.”
Companies providing rival broadband services to BT’s retail arm have come to rely on re-branding services sold by BT’s wholesale arm.
BT’s rivals have complained that it is too expensive to enter BT’s phone exchanges and install their own kit, and as part of Ofcom’s drive to kickstart LLU, BT has been persuaded by Ofcom to reduce its LLU charges by up to 70%.
BT recently reduced its broadband charges to end users by up to 25%, but the highest speed widely available is only 1Mbps, meaning users can’t comfortably support “triple play” applications - video, data and voice over their DSL lines.
In Japan, users have wide access to 40Mbps DSL services for less than £12 a month, which allows them to easily enjoy triple play. In the UK it costs £30 a month to access just 1Mbps from BT.