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