Ref: 88/01
Date: 17 December 2001

Measures to boost competition in the leased lines market to help businesses make greater use of high speed information services have been proposed today by Oftel.

The proposed measures place obligations on BT so that other operators can compete more effectively in offering leased lines to businesses.

Leased lines are permanently connected communications links between two or more sites. Partial private circuits (PPCs) are the key wholesale components of leased lines.

Leased lines are used by a growing number of businesses for voice and data calls. Operators use PPCs to provide leased lines and ‘always on’ telecommunications services, such as business to business broadband services.

Oftel has also separately today set out a proposed requirement on BT to carry call traffic from local loop unbundling operators’ equipment in BT’s exchanges across BT’s network and onto the operators’ networks – known as LLU backhaul.

Oftel believes that BT must provide these services at cost orientated prices.

David Edmonds, Director General of Telecommunications, said today:

"Today’s announcements are a continuation of the work Oftel is undertaking in several areas to achieve competitive broadband markets thus supporting the creation of Broadband Britain.

"Leased lines are an important way of providing businesses with dedicated high speed communications services, including broadband Internet access.

"Oftel’s first phase of proposals will improve operators ability to compete with BT. In phase two, Oftel will examine whether the charges made by BT to other operators for leased lines are cost orientated.

"Operators will be able to offer more competitive leased lines services to businesses using a combination of their own and BT’s networks."

Commenting on Oftel’s proposals for backhaul arrangements for local loop unbundling operators, David Edmonds said:

"In most cases operators that provide services over unbundled local loops need to use BT’s network to carry traffic from their equipment onto their own networks.

"If operators are to be able to compete effectively with BT to provide broadband services, Oftel believes that BT must carry other operators’ traffic across its network at cost-oriented prices.

"Today’s proposals represent another significant step forward to create a competitive and flourishing market for broadband and other high speed services."

Notes to editors:

1. Two documents have been published today by Oftel and are available on Oftel’s website:

• Consultation by the Director General on a Draft Direction to resolve a dispute with regards to the provision of Partial Private Circuits is at www.oftel.gov.uk/publications/broadband/leased_lines/ppcs1201.htm.

• Local loop unbundling: backhaul services is at www.oftel.gov.uk/publications/broadband/llu/back1201.htm.

Hard copies are available to the media from Oftel’s Press Office on 020 7634 8991 and to the public from the Research and Information Unit on 020 7634 8761.

2. In March 2001 Oftel directed BT to agree a new wholesale leased line product with other operators. Copies of this determination are available on Oftel’s website at www.oftel.gov.uk/publications/licensing/2001/ppcs0301.htm.

3. Despite reaching general agreement over the provision of this wholesale product, several issues remained unresolved. The operators in dispute with BT - GTS, Fibernet, Global Crossing, NeosCorp, Thus and Worldcom, Energis and COLT - referred the matter to Oftel to resolve in August.

4. Oftel has adopted a two-phase approach to resolve this dispute. This first phase, proposed in the consultation document published today, sets out measures that can be implemented quickly. They will improve efficiencies for operators in the retail leased line market and encourage the take up of PPCs. The second phase will consider more complex issues such as pricing and service level agreements. The proposals in phase two will be published next year.