Oftel attacks BT conditions for local loop unbundling

The key proposals are that:

• Where BT claims there is insufficient space in an exchange, operators will be able to commission an independent survey of an exchange. If the survey finds there is enough room, then BT will have to pay compensation to the operators;
• Operators should have the right to independent verification of BT's proposed charges for co-location facilities;
• BT should be contractually bound to meet time scales for making available co-location facilities and loops and the quality of service. BT should pay compensation if these service levels are not met. BT must also provide the same level of services to operators as it provides equivalent services for its own business;
• Operators should be able to transfer space in exchanges to each other to help make efficient use of spaces in BT's exchanges; and
• There should be a contractual dispute resolution procedure involving independent experts. This is in addition to the right to refer major disputes to Oftel under BT's licence.

Commenting on the draft terms and conditions, David Edmonds Director General of Telecommunications said today:

"Oftel has found in favour of the operators' complaints that the contract proposed by BT was not reasonable in a number of important areas.

"The terms and conditions proposed by Oftel will ensure that operators receive the necessary support services from BT, and that operators can challenge BT using independent experts.

"BT will be in breach of its contract if it does not provide operators with the necessary services to the same timescale and quality that it does to its own business, without good reason.

"Operators will be allowed to transfer space allocations to each other in order to develop a presence in their preferred exchanges. There will also be a 'use it or lose it' clause so if an operator does not begin installing equipment in a prepared space with three months they will lose the right to use it.

"These proposals will result in arrangements that are fair to BT and Operators consistent with the overall aim of promoting the establishment of an advanced telecommunications market though local loop unbundling."

David Edmonds added that the UK was "well on the way" to finalising all parts of the framework for local loop unbundling in the UK.

"Oftel has inserted and brought into force the new unbundling condition in BT's licence. We have set the technical standards on the types of equipment that can be installed in BT's exchanges. Oftel has published an indicative price for unbundled loops, with the final price to be published shortly. We are close to finalising the allocation process for exchanges where the demand for space exceeds supply, and we have now published new draft terms and conditions for the contract between operators and BT.

"BT has begun work to prepare the first exchanges for co-location and has agreed to have unbundled local loops available in 600 exchanges by end of June 2001. Oftel will continue to monitor the process very closely and will be seeking further improvements to the timetable."

Following a 28-day consultation on the new proposals, Oftel will make a formal Determination of the terms and conditions. BT will then have to revise the contract to include the final terms and conditions.

The European parliament has said that unbundled services should be available from 1st January 2001. Controversially, Oftel has given BT until July 2001.