Ref 77/02
Date: 23 December 2002

Oftel has today finalised a new pricing and quality of service regime for BT's wholesale business broadband services. This follows a consultation Oftel launched in September.

The prices set by Oftel for partial private circuits (PPCs) are typically 50 per cent lower for connection and 20 per cent lower for rental than BT's current charges. Oftel believes these charges better reflect the costs BT incur in providing these services.

PPCs are the key wholesale components of leased lines which telecoms operators buy from BT so they can offer their own services directly to end users. Leased lines are permanently connected communications links between two or more sites and are used predominantly by businesses.

The amended charges will be backdated to 1 August 2001 when PPCs were first introduced by BT.

Oftel has also confirmed a number of improvements for BT to make to its service level agreement for PPCs. These improvements include BT paying compensation to other operators in the event of late delivery. This will act as an incentive for BT to provide a high quality service to other operators.

Today's announcement will allow operators to compete more effectively with BT in the retail market for leased lines.

Announcing the decision, David Edmonds, Director General of Telecommunications, said today:

"The package of measures announced today by Oftel will act as a springboard to boost competition in the business broadband market.

"The lower charges now better reflect BT's costs and they will allow other operators to compete fairly with BT in the retail market for leased lines.

"Oftel has also set out a number of improvements to BT's service level agreements. They will act as an incentive to BT to provide a high quality level of service to other operators.

"Small rural businesses to big global firms should benefit considerably as operators will be able to offer more competitive prices and guarantee high levels of service."

Notes to Editors

1. Partial private circuits: phase two, a Direction to resolve a dispute concerning the provision of partial private circuits is available on Oftel's website at www.oftel.gov.uk/publications/broadband/leased_lines/ppc1202/direction.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. Oftel's draft Direction, published on 10 September 2002, is available at www.oftel.gov.uk/publications/broadband/leased_lines/ppc0902/ppc_ch1_2.htm.

3. Oftel has already set out its market analysis in full and resolved a number of the issues arising through the ('phase one') Direction published on 14 June 2002 (see www.oftel.gov.uk/publications/broadband/leased_lines/ppcs0602.htm).

4. Oftel previously determined that BT must negotiate with operators for the provision of PPCs. This first Direction on PPCs was published in March 2001, is available at www.oftel.gov.uk/publications/broadband/leased_lines/ppcs0301.htm.