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Oftel Announces Unbundled Prices in U.K.

[London, ENGLAND] It's what the ISP industry in the U.K. has been anxiously awaiting -- the final wholesale prices for BT's unbundled local loops, announced Friday by government telecoms watchdog Oftel.

ISPs are unlikely to breathe a long sigh of relief. Rather, the prices are just high enough to provoke one or two sharp intakes of breath.

Operators wishing to take a local loop from BT will pay a yearly rental of £122 (US $180). But there's a lot more. A one-off connection charge of £88 (US $130) will add to the final cost to the end-user.

Oftel has also fixed the charges for the cables that connect the unbundled loops in BT's exchanges to the operators' own equipment. In summary, the charges are: £21 (US $31) per year rental for every 100 unbundled lines; a one-off charge of £863 (US $1,270) for connection to equipment within the exchange; and £674 (US $991) for connecting cables for distant co-location.

Director General of Telecommunications David Edmonds claimed that progress in unbundling BT's local loop is accelerating.

"Two rounds of bidding for space in exchanges have been successfully completed. Over 700 exchanges have been chosen for the installation of other operators' equipment," said Edmonds.

Edmonds went on to say that co-location facilities are now available at two of the trial exchanges and will be extended to the remaining two early in the New Year.

Clearly, the doubling of the number of operational trial exchanges from two to four is intended to be an example of "acceleration" in unbundling the local loop. However, critics will not find this very impressive -- and many will be dismayed by the prices.

Edmonds said the two announcements on Friday about the final price of loops and arrangements for shared access will help operators finalize their plans to offer high speed DSL services over BT's local telephone network.

"We have also set out the basis on which shared access will be introduced. This will offer not only operators, but consumers, a wider choice of options for providing and receiving voice and data services," said Edmonds.

Although BT lost its monopoly on telephone services in the U.K. in 1981 it has continued to dominate the market because it owns the infrastructure. Unbundling the local loop will open up its local infrastructure -- from the exchange to the user -- to other operators.