Ofcom To Focus On LLU Broadband
Posted: 06th Jul, 2004 By: MarkJ
Ofcom has today set out a longer-term approach to broadband development, which will see the UK telecoms and media regulator concentrate more on local loop unbundling based services:
However, as wholesale costs are reduced and new technologies emerge, Ofcom believes it is now appropriate to focus on the second generation of broadband services likely to emerge as competition increases between providers.
The role of local loop unbundling
Ofcom believes that Local Loop Unbundling the process which allows network operators to compete in offering a range of innovative broadband media and telephony services between the local telephone exchange and the customer's premises could play an important role in delivering second-generation broadband services over the rest of the decade.
If there is sufficient progress in reducing costs and improving operational processes, local loop unbundling in the UK has the potential to deliver the same kind of growth and innovation emerging in, for example, France and Japan, where tens of thousands of local loops are unbundled each month.
Ofcom believes that greater competition in access networks can drive widespread adoption of Voice over Broadband (VoB) services within the next 3-5 years. By the end of the decade, the successful introduction of greater infrastructure competition, combined with continued innovation in access technologies, could enable a majority of UK households to benefit from affordable and accessible broaderband connections delivering video-quality bandwidth.
Local loop unbundling price and process
Initial attempts at local loop unbundling in 1999-2001 were unsuccessful, weighed down by both price and operational process issues. With this in mind, Ofcom has begun a market review of local loop unbundling to establish a new approach which offers both economically sustainable pricing as well as industrialised processes designed to cope with large numbers of customers.
In May 2004 BT announced a 70% reduction in its charges to other operators for access to unbundled local loops. This change in pricing will provide a greater stimulus to infrastructure competition over time.
However network operators also identified a range of day-to-day operational issues which, when taken together, have the potential to add both delay and cost to the unbundling process.
Ofcom believes that to pursue formal and direct regulatory intervention in response to each complaint about operational matters would be disproportionate and, as a likely cause of greater delay, ultimately ineffective.
Instead Ofcom has proposed the establishment of a Telecommunications Adjudicator, independent of the regulator, BT and other network operators and able to bring all parties together to find a prompt mediated resolution of working-level implementation disputes.
The Adjudicator will also work with the industry to help develop new local loop unbundling products and processes which are fit-for-purpose and industrialised to cope with large volumes over time.
It's noted that Ofcom's Adjudicator scheme is currently supported by almost all the major operators, from BT to AOL and Video Networks.
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