Ref: 57/01
Date: 23 August 2001

Oftel has today intervened to determine the service levels that BT must offer to other operators wanting to unbundle BT local loops and the compensation BT must pay if it fails to meet those levels.

In May this year, operators complained that though Oftel had earlier determined that BT must offer an agreement specifying levels of service, BT's offer had been inadequate.

Oftel has decided that much of the complaint was justified and that BT's offer did not meet the requirements of Oftel's earlier Determination. As a result, Oftel proposes a significant redraft of the contract between BT and the operators.

It is the first time that the telecoms regulator has formally intervened to set service level standards. Following a statutory consultation period, these standards will be imposed by requiring BT to amend its existing contract.

Oftel has also set out the levels of compensation BT must pay operators if it fails to provide services in accordance with these standards. For example, Oftel proposes that BT should pay £10 for each working day an unbundled loop is unavailable and £80 per operator for each working day's delay in providing co-location facilities.

David Edmonds, Director General of Telecommunications, said today:

"In February Oftel ordered BT to provide operators guaranteed levels of service for the provision of unbundled local loops. After negotiations between BT and operators, it is clear that Oftel intervention is required to ensure that BT offers satisfactory service level agreements.

"LLU is a complex and detailed process. It is the role of the regulator to ensure that, even at this level of detail, unwarranted barriers to competition are removed. The revised contract I am proposing is designed to achieve this.

"The service level commitment will ensure that BT delivers a reasonable service to operators ordering unbundled local loops. Consumers will benefit because operators can now guarantee timescales for delivery of service and fault repair.

"Where BT does not fulfil these commitments, it will be required to pay a level of compensation determined by Oftel which reflects the revenue lost by operators.

"BT will also have to compensate operators for their extra costs if it does not have an automated system for ordering local loops in place by its planned date of 5 November."

Oftel proposes to implement these new safeguards by requiring BT to amend the access network facilities agreement, which is the contract BT has with operators to provide the services necessary for local loop unbundling.

The deadline for responses to the consultation is 20 September.

Notes to editors:

1 Local loop unbundling: service level commitments and compensation is available on Oftel's website at www.oftel.gov.uk/publications/local_loop/sla0801.htm. Hard copies are available to the media from Oftel's press office on 020 7634 8991 and to the public from Oftel's research and information unit on 020 7634 8761.

2 Local loop unbundling: The terms of the Access Network Facilities Agreement - Statement and Determination is available on Oftel's website at: www.oftel.gov.uk/publications/local_loop/anf0201.htm