Oftel moves forward with unbundling of local loop

The unbundling of the UK's local loop has taken another step forward today as Oftel sets in place changes to BT's licence conditions.

The UK telecoms watchdog has begun consultations over a proposed condition in BT's licence which allows Oftel to set the price for local loop services and to resolve any disputes between BT and other operators.

An Oftel spokesman said: "This is the legal step we need to take in order to proceed with the unbundling of the local loop. It will set out the products BT must offer when it unbundles the local loop, the conditions that will apply and how the prices will be set."

The spokesman claimed Oftel is also expecting a timetable from BT in the next two weeks that will help the watchdog assess if the unbundling deadline of July 2001 can be brought forward.

BT is under increasing political pressure to review the current deadline. Prime Minister Tony Blair added his weight to the call for an earlier deadline at the Knowledge 2000 conference in London last week.

However, a BT spokesman insisted the July 2001 date would not be changed. He said: "The process for local loop unbundling was decided after years of consultation and an agreement was reached based on what was technically possible." Nevertheless, when pressed on whether the political pressure will force BT to reconsider its timetable, the spokesman conceded: "We won't rule out anything."

Robin Bosworth, analyst at Schema, warned against placing too much significance on unbundling the local loop. "The political objective to bring the date forward is based on the idea that it will hasten the take-up of ecommerce, but unbundling the local loop will not be the panacea people expect.

"In practice the range of applications you can get through it are limited. Services will depend on the quality of the copper wire and distance from the local exchange - and none of this has been truly tested," he said.

Oftel expects to finalise the new licence condition by June 2000.