Local loop unbundling
Local Loop Unbundling (LLU) is the means by which other
broadband operators connect to consumers via BT's copper local
loops – a service for which the LLU operator has to pay BT, at
prices approved by Ofcom.
The regulator is proposing to set a ceiling for the rent of a
fully unbundled local loop at £81.85. This, it says, will promote
competition in the broadband market by ensuring that BT's charge is
fair, reasonable and cost-oriented.
The ceiling is actually higher than the amount charged by BT at
present which, as from 1st August, has been £80.00 a year – down
from £105.09 previously. Ofcom believes that it is still important
to set the price ceiling to ensure that BT's charge is transparent
and that BT does not increase the charge to an excessive level.
The consultation will run until 10th October. Subject to
responses, Ofcom intends to introduce the new fully unbundled
rental charge ceiling later that month.
Bespoke prices
The watchdog is also consulting on deregulatory proposals to
allow BT to offer large business customers bespoke prices. Comments
are requested by 16th November.
At present, BT must offer all large business customers the same
published call and line charges, but under Ofcom's proposals, BT
would be allowed to agree individual terms with business customers
spending more than £1 million a year on telecommunications services
without having to publish its prices.
The proposals cover BT's business exchange line services and
business inland call services at the retail level, and suggest that
the bespoke prices should not fall below a price floor. According
to Ofcom, this should be set at the full cost (including network
and retail costs) of offering a service to a customer.
According to Ofcom, the measures will stimulate greater
competition in the fixed-line market, as well as supporting a
potential reduction in BT's prices for large business
customers.
The regulator wants to ensure that BT's competitors are able to
operate on equal terms with BT. Therefore, the consultation
document also proposes that before BT can introduce bespoke
pricing, competitors must be able to replicate BT's services using
Wholesale Line Rental and Carrier Pre-Selection products.
In a separate consultation, due to close on 30th September,
Ofcom is assessing whether these products are now fit for
purpose.
