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Broadband (including LLU) : FAQs

How many broadband connections are there in the UK?

There are now more than 10 million broadband connections in the UK. By December 2005 there were 9.792 million broadband connections in the UK and the average broadband take up rate during the three months to December was more than 70,000 per week.

How is broadband regulated?

Retail broadband is a competitive market which operates without price regulation. BT is required to provide regulated wholesale access to broadband products at two levels:

the ATM Interconnect layer (the DataStream set of products) and;
the Local Loop, both in terms of shared loops and fully-unbundled loops.

While broadband roll-out and take up has improved significantly in the last two years, there remains limited competition in terms of broadband delivery at the network or wholesale level. The majority of ISPs still deliver DSL broadband connections using BT’s IPStream product.

Achieving sustainable wholesale broadband competition is one of Ofcom's key targets.

How are DataStream products regulated?

IPStream prices not regulated. Following the WBA market review last year, BT is required to ensure that:

BT must supply DataStream to other operators on fair and reasonable terms
there is a certain minimum margin between IPStream and DataStream
BT is meeting it non-discrimination obligations

What is Local Loop Unbundling?

Local Loop Unbundling (LLU) enables operators to connect directly to the consumer via BT's copper local loops and then add their own equipment to offer broadband and other services. This process involves operators accessing BT’s local exchange buildings to connect to BT’s network of copper lines which connect them to homes and businesses.

There are two types of unbundled line:

A fully unbundled line gives operators the exclusive use of the copper line.
A shared access line only gives operators the use of the high frequency channel used for broadband and will also be used by the customer's fixed-line voice provider.

Ofcom believes that development of the LLU market, to allow operators to target infrastructure investment and to develop scale in the creation of high-speed data services, will be critical in ensuring a fully competitive and innovative telecoms market for the long term.

Why has Ofcom made LLU such a priority?

Ofcom made LLU development a priority last year, after recognising that the UK had fallen behind the UK's most successful EU counterparts on both charge and take-up levels for LLU.

Ofcom's challenge to BT has been to re-model and restructure its charges and operational processes and practices such that the UK can swiftly advance towards best practice in the EU.

Ofcom believes LLU is important for broadband development in the UK, because it offers the greatest opportunity for competitive operators to differentiate their products and prices versus BT and thus offers the greatest opportunity for innovation.

While LLU offers the potential for downstream service and price competition in broadband, it also requires substantial facilities and network investment by competitors.

How is Local Loop Unbundling regulated?

Ofcom’s approach on LLU focuses on two key areas: process and price.

In July 2004 Ofcom appointed the independent Telecoms Adjudicator to handle process issues;
Ofcom completed its review of LLU prices in December 2004 as part of the wholesale local access market review.

What was the outcome of Ofcom's review of LLU prices?

On 16 December 2004 Ofcom announced final charges for most connection and rental prices for Local Loop Unbundling (LLU) services. The charge reductions follow consultations published on 13 May 2004 and 26 August 2004.

The price ceilings came into effect from 1 January 2005. For a full list of price ceilings see:

http://www.ofcom.org.uk/media/news/2004/12/nr_20041216

The charge control for renting a fully unbundled local loop was published in September 2005. See:

http://www.ofcom.org.uk/media/news/2005/09/nr_20050907a

How many lines have been unbundled?

The independent Telecoms Adjudicator website gives monthly updates. See Related Item at: http://www.offta.org.uk

Which companies are part of the Telecoms Adjudication scheme?

AOL, Bulldog Communications Ltd; Cable & Wireless; Easynet; Energis; KCOM; Ntl; Swedia Networks UK Ltd; Telefonica; Thus; Tiscali; Trilogy; Updata; Video Networks Ltd; Wanadoo UK plc.

For more information on the work of the independent Telecoms Adjudicator see Related Item at: http://www.offta.org.uk