Ref: 37/02
Date: 14 June 2002 

Oftel has today taken action to encourage greater competition and lower prices in the provision of high speed, ‘always on’ communications services to business consumers.

Under the Oftel direction published today, BT will be required to make a number of improvements to its wholesale leased line products to promote greater take up of the products by other operators.

Leased lines are permanently connected communications links between two or more sites. Partial private circuits (PPCs) are the key wholesale components of leased lines, which enable other operators to use BT’s network to deliver services to their own customers.

In response to an Oftel determination BT began offering PPCs in August 2001. Until then operators had to use a more expensive retail leased line product.

Access to these wholesale products has boosted competition in the leased lines market, enabling operators to reduce their costs significantly which in turn can result in significant savings for their customers.

However, operators’ concerns about the terms and conditions under which PPCs are being offered, and the lack of appropriate interconnection products mean that operators have not transferred all eligible retail leased lines to PPCs.

Oftel’s direction sets out specific solutions and timescales for BT to address operators’ concerns.

David Edmonds, Director General of Telecommunications said today:

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

"PPCs allow operators to compete with BT in the leased lines market, giving them the real potential to reduce their costs significantly - and therefore to reduce prices to end users.

"Business users in the UK already benefit from broadband prices that are lower than in other European countries such as France and Germany.

"This decision is an important part of Oftel’s work to further boost the development of broadband in the business market.

"At the moment many operators’ circuits have not been transferred to the wholesale products. I want to see a far greater take up to ensure that consumers see the full benefits of competition in the leased lines market."

Oftel’s decision is the conclusion of the first phase of a two-phase investigation into allegations that barriers are preventing operators from making full use of PPCs.

The second phase will resolve the more complex issues such as pricing and service level agreements. A consultation document will be issued by August and a decision is expected by October of this year.

If Oftel finds that the pricing of any products is not cost orientated it currently proposes to determine that new prices will be backdated to the launch of the products on 1 August 2001.

Notes to editors

1. Today’s direction can be found on Oftel’s website at www.oftel.gov.uk/publications/broadband/leased_lines/ppcs0602.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. The draft direction, published in December 2001 is available at www.oftel.gov.uk/publications/broadband/leased_lines/ppcs1201.htm.