Broadband group lets BT off hook on unbundling

The Broadband Stakeholder Group (BSG) has played down the significance of Britain's poor show in local loop unbundling.

The Broadband Stakeholder Group (BSG) has played down the significance of Britain's poor show in local loop unbundling.

Two-and-half-years after the local loop unbundling process began, BT said that from its tens of millions of residential and business lines "over 500" individual loops have been purchased by alternative telecommunications companies wishing to provide non-BT DSL services to customers.

The definitive government report, The UK Online: the Broadband Future, published last year, expressed concern that the UK was falling behind other countries in the broadband race. It said that "unbundling in 2001 should allow the UK to catch-up" and encouraged the industry watchdog, Oftel, to drive forward the local loop unbundling process.

However, when the BSG - set up in response to the report - issued its interim findings last week, local loop unbundling was not even mentioned in the press statement.

Keith Todd, chairman of BSG, admitted that local loop unbundling had happened much less than anyone expected at the beginning of the process, but played down the importance of the figures and of the process as a whole. "There has been too much focus on the silver bullet that was local loop unbundling," said Todd. "It wasn't the only thing that needed to happen."

Todd was unwilling to lay blame for the lack of success in local loop unbundling at any door. He stressed that the importance to "broadband Britain" of satellite, cable, wireless and BT's wholesale services should not be underestimated.

Not everyone agrees. "Five hundred is a pathetic number and an indication of how far things have gone wrong," said Tony Lock, senior analyst at Bloor Research. "No one argued that local loop unbundling was the only game in town," he said, adding that it had become the biggest story because BT did not co-operate.

Complaints against BT culminated in punitive steps by Oftel late last year. The regulator's view now is that an alternative operator can purchase an unbundled line from any of BT's exchanges.

Unfortunately the slump in the financial markets dealt a savage blow to those campaigning for action against BT. Where as many as 30 competitors were requesting local loop unbundling from some exchanges at the beginning of the process, only a handful remain.

The BSG interim report suggests only a glimmer of hope for local loop unbundling in the future. It states, "There may be renewed commercial interest in the local loop unbundling business model in the future, particularly for niche business markets."

UK unbundling lags behind Europe
  • UK: 500 local loop lines sold by BT

  • France: 650 local loop lines sold by French regulator ART

  • Germany: 70,000 local loop lines sold by the German regulator

  • Italy: 12,000 local loop lines sold by Italian regulator Agcom by February 2002, with 2,000 more being ordered each week

  • Recent figures from Oftel showed that the UK is lagging behind France, Germany, Sweden and the US in overall broadband penetration.

Read more on IT strategy