Lower Charges To Boost Internet Customer Choice
Reduced connection and rental charges for Local loop unbundling services announced by Ofcom today should result in a more competitive and innovative telecoms market, with customers offered cheaper broadband packages and increased multi-media content.
The final connection and rental charges for local loop unbundling (LLU) services were announced by the media regulator following consultations in May and August. The new prices, which deliver a 60% reduction on the cost of transferring an existing line and a 36% reduction for providing a new line, will come into effect from 1 January 2005.
LLU enables internet and phone operators to connect to customers via BT’s local telephone lines. Ofcom believes that development of the LLU market will be critical in ensuring a fully competitive and innovative telecoms market for the long term.
Commenting on the new pricing Ofcom chief executive Stephen Carter said: “This year has seen a lot of progress on local loop unbundling. This has been achieved through a combination of industry investment, regulatory review and, importantly, constructive engagement from BT.”
Ofcom has yet to determine the rental charge ceiling for a fully unbundled line at this stage, as a high proportion of the costs for this service are determined by the cost of laying and maintaining the line between the local telephone exchange and the home or business premises. Therefore Ofcom must place a value on BT’s copper access network, a subject which it is currently holding a consultation period on.
One of the companies likely to benefit from the new regulations is broadband and digital television provider, HomeChoice. The company delivers high-speed internet, digital TV and on demand movies to customers through a single broadband connection.
Roger Lynch, chairman and chief executive of HomeChoice’s parent company, Video Networks, welcomed the media watchdog’s revised pricing structure. He said: “We welcome these further reductions which will allow Video Networks to continue to develop and enhance its range of services. However, it is essential that Ofcom determine the rates for fully unbundled line rental as soon as possible. This is necessary to give alternative network operators the economic certainty required for investment in new services.”
The revised pricing regulation’s follow increased pressure on BT from both Ofcom and rival companies to reduce its prices and open its network. Last month saw Ofcom warn the telecoms giant that it must let rivals have ‘real equality of access’ to phone lines (see Ofcom Urges BT To Open Its Network To Rivals).
BT: 0207 469 2337 www.btplc.com Ofcom: 020 7981 3040 www.ofcom.org.uk
Recent New Media Stories from NewsLine Internet Advertising Spend To Rocket In 2005 Associated New Media Creates Dedicated Research Arm UK Broadband Usage To Double In Six Months
Subscribers can access ten years of media news and analysis in the Archive