BT is obliged, by deregulation laws dating back to November 1999 to offer local loop access to its competitors. “Local loop” refers to the last mile or so of wire between telephone exchanges and homes. BT’s 5500 exchanges connect over 25 million customers to the BT network and although the local loop is viewed by some as an antiquated piece of technology, its value to internet operators is enormous by virtue of it offering a direct line into every household in the country.
David Edmonds, The Director General of Telecommunications said:
“These announcements provide further clarification for operators planning to offer services over unbundled local loops. Final prices for shared access to local loops are lower than those originally proposed, following analysis of additional information received by Oftel during the consultation period.”
In addition, Oftel has stipulated that BT must not charge a firm in advance for preparing a site inside a telephone exchange and must not charge them a discriminatory rent for use of such premises. In fact, Edmonds pointed out that “the rental charge is now below the EU average.”
Although the changes will be viewed favourably by BT’s rivals, less demand for broadband services than anticipated and decline of the telecoms sector means that there are fewer companies still around to enjoy the benefits.
Of the 40 companies which expressed interest in accessing BT’s local loop a year ago, about 30 have abandoned their efforts and several have gone bankrupt. Now there are only 5 companies actively pursuing access to the local loop with a further 5 keeping the option open.