SUPPLEMENTARY MEMORANDUM SUBMITTED BY
BRITISH TELECOMMUNICATIONS PLC
LOCAL LOOP UNBUNDLING (LLU)
As discussed earlier this week with both yourself
and with the Chairman, please find attached a BT press release,
issued today, which gives details of BT's commitment to advance
the timescales of local loop unbundling as presented today to
the industry operators' forum. As we said in our original submission
to the Committee, BT is fully committed to the UK introduction
of local loop unbundling and we are working hard to find creative
ways to meet a challenging construction programme. We were unable
to provide these details at the time of our submission, since
much depended on the outcome of a number of scheduled meetings
with Oftel and the industry, not least an important pre-scheduled
meeting which was held this morning to finalise some outstanding
BT now expects to deliver unbundling in at
least 600 exchange areas (190 where operators have equipment in
BT exchanges and 410 where operators have equipment in adjacent
buildings) to become available progressively between January and
June 2000. This could mean as many as 2000 points of presence
(POPs) by June for new entrants. A new phase to LLU from January,
will allow lines to be unbundled earlier in the process for all
operators who have established location. This phase will be partly
manual, and partly supported by a short-term tactical OSS development.
Industry LLU trials are proceeding ahead of
original expectations. BT plans to work closely with the triallists
whose co-location facilities are complete before the end of 2000
to provide unbundled lines which will allow technical trials and
valuable advance testing of the delivery processes before January
2001. Currently the first facilities are expected to be ready
by mid-November, with initial unbundled loops to follow thereafter.
The press release describes additional proposals
speed up significantly the initial
surveying of popular exchanges;
reduce delays in scheduling building
provide penalty payments for late
We are also anticipating greater use of nearby
buildings. Unbundling can be achieved either by physically siting
other operators' equipment in BT's exchanges (co-location) or
by siting the equipment in nearby buildings and connecting it
by tie cable to BT's main distribution frames (distant or adjacent
location). Using nearby buildings can potentially enable every
operator that wants it to have access to the lines in any given
We expect to continue making speedy progress
towards widespread availability of unbundling facilities and to
be compliant with the EU Regulation. Having agreed to deliver
unbundling we will continue to deliver on our promises. We are
acting appropriately in a pro-competitive way.
Availability of unbundled loops will begin on
or before the end of this year and we are working towards widespread
availability by next summer. Even after BT plays its part, the
speed and extent of unbundling still ultimately depend on the
commercial plans of other operators.
As we said in our submission, opening up exchanges
is not the same as unbundling the local loop. Opening up exchangesco-locationis
simply one way of achieving unbundling. It is inherently tied
to the physical space available in each exchange, and access/security
issues. Another method of unbundling is available for every BT
lineremote location, also known as adjacent location, where
the operator equips his own site and connects it to BT's distribution
frame by tie cable. This eliminates many risk factors for the
OLO and at least one operator (Redstone) has said it's the way
forward for them.
BT has over 6,000 local exchanges and to date,
BT has initial applications from 30 OLOs for more than 20,000
points of presence in up to 3,000 exchanges. Five LLU trial sites
involving 14 operators are on schedule to be up and running by
January and assuming trials are successful BT would expect to
provide unbundling at around 100 additional exchange areas every
month. But the eventual extent and rate of unbundling depends
to a very large extent on the level of commercial interest and
the orders we receive from OLOs. It is likely that operators will
be most interested in offering services in areas of dense population.
Some exchanges cover a lot more people than others. As few as
400 exchanges can cover 25 per cent of the population, 600 can
cover around 33 per cent, and you can cover half the population
with only 840 exchanges.
In September, OLOs were invited to bid for the
right to place their equipment in BT's exchanges. Some 30 operators
applied and BT is currently processing the orders for a first
tranche of 361 exchanges. Oftel is currently consulting on the
method to be used for the allocation of space in the most "popular"
exchanges where in some cases more than 25 operators are competing
for limited space.
BT has no role in determining which operator
goes where and in what sequence orders are handled. To ensure
fairness and transparency, the industry has agreed that an independent
third party, the Electoral Reform Society, should prioritise the
orders received from OLOs. Following Oftel's proposed allocation
procedure, BT is currently processing the first tranche of orders
for 361 exchanges.
As we noted in our memorandum, Oftel has published
a consultation document to give clear direction on the future
operation of the "bow wave" process. We understand that
Oftel aims to make a determination by mid-November so that the
result can be applied to the second round due to begin in December.
It is this round where space at the "most desirable"
exchangesfrom an OLO point of viewwill be allocated.
BT has no "black-listed" exchanges.
Operators can apply for space at any BT exchange. Regardless of
a lack of space or power, other operators are not prevented from
unbundling loops in that exchangedistant/adjacent location
remains an option. In June 2000, the industry supplied co-location
demand forecasts. To ensure the rapid build-up of co-location
sites, BT reviewed the forecasts and offered the industry a list
of its exchanges where, from records, spare floor space and/or
power capacity was known to exist. In the early days, to steer
operators away from buildings where our records showed little
or no space and/or a lack of spare power, a supplementary list
was also compiled. Both lists simply offer an indication of the
availability/unavailability of these basic co-location requirements.
However, it is only after a site visit is undertaken
that the real limitations of any BT exchange are definitely known.
Where co-location is discounted, Oftel, or a nominated third party,
will be invited to verify the outcome.
Agreeing which OLO goes where is only the first
stage of unbundling the loop. LLU is a complicated process because
there are so many parties involvedOLOs, Oftel, local planning
authorities, quantity surveyors, building contractors, workmen
and suppliers, as well as ourselvesand the different stages
of the development are frustratingly interdependent.
For instance, we can't place any orders for
materials and equipment until we know which OLOs will be in what
exchanges and what their requirements are, then carry out a site
survey to see if those requirements are practicable and to give
them a full costing. Once that has been agreed, we have to seek
planning permission for the building changes from the local authority
and at the same time put orders in hand for the additional equipment
and materials needed to carry out the work.
Even those two apparently simple processes have
significant potential for delay. Planning committees aren't known
for their speedy response; and there are only a limited number
of companies that can supply the equipment we use in our exchangesfor
instance, for ventilation, fire and alarm systemsso doubling
or trebling demand over a relatively short period is virtually
certain to lengthen their delivery schedules.
We also have to prime building contractors to
be ready for actionbut without being able to give them
a firm date. BT is also keeping these processes under review to
see what steps can be accelerated.
10 November 2000