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OFTEL Finally Addresses Wholesale Leased Lines Issue

[London, ENGLAND] BT must offer leased line services to other operators at wholesale prices, says a draft direction published Wednesday by U.K. telecoms watchdog OFTEL.

Businesses have long complained of the high cost of "always on" leased line connections in the U.K. -- the type of connection needed to run round-the-clock Web servers and other Internet systems. Now, OFTEL's decision to push BT more strongly is expected to lead eventually to lower prices as other operators begin to compete more effectively.

Director General of Telecommunications David Edmonds said the proposals provide a firm basis for operators to obtain the necessary wholesale products from BT on non-discriminatory terms. The aim is to enable them to compete on an equal footing with BT.

"Oftel will continue to review competition in the leased lines market. In the light of this and, once BT and operators have concluded their negotiations under the direction, I will decide whether further regulatory action is necessary," said Edmonds.

Critics of OFTEL say that it is moving much too slowly in its attempts to open up the telecommunications market -- that it is an ineffective force pitched against the immovable object of BT. In this instance OFTEL seeks comments on its draft direction by mid-January and "comments on comments" by January 30, 2001.

The latest move by OFTEL was prompted by a request from Energis, way back in July 2000, supported by Cable & Wireless, Worldcom, Thus, and Fibernet. During the intervening period, some of these firms have transformed their businesses. This week alone Cable & Wireless acquired its twenty-sixth Internet company in two years while Energis spent US $719 million buying German Web host Ision.

OFTEL, however, will not be hurried. It plans to issue a further statement on the leased lines issue in the Spring of next year. The watchdog says "further analysis" will be required before any price controls can be imposed on wholesale leased lines.

The full draft direction can be found at the OFTEL Web site, at: www.oftel.gov.uk/competition/nll1200.htm



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