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07|09|05

Ofcom launches consultation on BT's fully unbundled rental charge for local loops

Ofcom today published proposals to set a maximum price of £81.85 that BT can charge its competitors to rent a fully unbundled local loop.

The ceiling is designed to promote competition in the broadband market by ensuring that BT's charge is fair, reasonable and cost-oriented.

The consultation document is available at:

http://www.ofcom.org.uk/consult/condocs/llu/

On 1 August 2005, BT voluntarily reduced its fully unbundled rental charge from £105.09 to £80.00 a year. Ofcom believes that it is still important to set the price ceiling to ensure that BT's charge is transparent and that BT does not increase the charge to an excessive level.

In setting the charge ceiling, Ofcom has taken into account the conclusions of its review of how much it costs BT to lay and maintain the copper access network connecting homes and businesses to its exchanges, and its review of BT's cost of capital. Both reviews were published on 18 August 2005.

On 16 December 2004 Ofcom announced the connection and rental charges for shared local loop access. This led to a 70% reduction in the charges. Ofcom also published charges for fully unbundled connections. Today's announcement, covering the fully unbundled rental charge, means that Ofcom has now set - or is consulting on - all local loop rental and connection charges for full and shared access.

Ofcom will consult on today's proposals until 10 October 2005. Subject to responses, Ofcom intends to introduce the new fully unbundled rental charge ceiling later that month.

Ends.

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