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UK Chancellor stirs up local loop controversy

By Lisa Burroughes

Published: Thursday 17 February 2000

Gordon Brown, the UK's Chancellor of the Exchequer, told financiers last night he wants urgent progress to be made over the unbundling of the local loop.

Speaking at the Smith Institute in London, Brown said he is concerned the high cost of accessing the Internet is putting UK businesses at a competitive disadvantage and called for the July 2001 deadline given to BT by Oftel to open the loop to other operators to be brought forward.

"I know Oftel believe this timetable can be improved. Let the industry be in no doubt that I stand full square behind Oftel in these aims. We will not allow any foot-dragging here," he said.

Brown added: "I want to see a quick roll-out of the necessary infrastructure and competition to drive down prices further so that the costs in the UK for both business and consumers are comparable to those in the US."

He warned if prices aren't comparable to those in the US by the end of 2002, the government would take further action. Oftel confirmed it has asked BT to shorten the timetable by four months but the UK telco is yet to respond.

But BT could be forced to speed up the process of unbundling even further by the European Commission. A white paper out this week said: "In the context of its e-Europe initiative, the Commission has called on member states to ensure that full unbundled local loops are available by the end of the year 2000."

The white paper currently stands as a voluntary guideline but after consultation with industry next week the EC could make the earlier deadline mandatory for all member states.