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What is Local Loop Unbundling?

Local Loop Unbundling (LLU) is the process where the incumbent operators (BT and Kingston in the UK) makes its local network (the copper cables that run from customers premises to the telephone exchange) available to other companies. Operators are then able to upgrade individual lines using DSL technology to offer services such as always on high speed Internet access, direct to the customer.

Types of access

For LLU, operators have the choice of a number of options for gaining access to the local loop.

1. Physical space within the incumbentís site

BT offers operators two options for co-location within its exchanges. The location of an operatorís equipment in a site can either be within a hostel, a room that is built to a standard design to house a number of operators, or in a bespoke arrangement. The basic unit of capacity of a hostel is the "equipment bay". In the standard hostel arrangement the unit of space is a three rack bay which has a footprint of 1.8m x 0.8m and a total area, including circulation space, of 10m2. This area is separate from the incumbentís operations.

If an operator does not wish to be located within a hostel (e.g. where they have non-standard requirements) they have the option of requesting a bespoke arrangement.

Each pair of copper wires run from the customerís home to the primary connection point (PCP). The PCPís are the cabinets that are located at the side of the road. The PCP connects the wires from the customerís home to a pair of wires from the exchange. Inside the exchange the wires in the external cable are terminated on the main distribution frame (MDF) and then are connected to the internal exchange equipment.

The wires connected to the MDF are then connected via an internal tie cable from the MDF to the handover distribution frame (HDF) which is adjacent to the OLOís equipment. The HDF (Handover Distribution Frame) is used to terminate the cable from the exchange and to make the pairs available to the operator.

2. Distant co-location

One of the options available to operators is distant location. This is where an operator houses its equipment away from the incumbentís building and uses a tie cable to connect the incumbentís exchange with this remote site. The remote site can be a building or a Ďgreen cabinetí on the side of a road.

A tie cable is used to connect the MDF at the local exchange to the HDF at the distant site, but in this case an external tie cable is used.

3. Line Sharing

The EU Regulation on LLU requires incumbents to offer shared access (or line sharing). Line sharing enable operators and the incumbent to share the same line. Consumers can acquire data services from an operator while retaining the voice services of the incumbent. Some operators may choose to offer data services only, so with line sharing consumers can retain their BT service for voice calls while getting higher bandwidth services from another operator without needing to install a second line.

From the MDF the wires are connected to a splitter (which separates the frequencies for voice telephony and those for higher bandwidth services). The incumbent provides voice telephony over the lower frequency portion of the line, while another operator provides DSL services over the high frequency portion of the same line.

4. Sub-loop unbundling

The EU Regulation also requires that other operators can interconnect with the local access network at a point between the incumbentís site and the end user. This arrangement is referred to as sub-loop unbundling.

In sub loop unbundling the connection point is the primary connection points (PCPís), which are the green street cabinets. Sub-loop unbundling can be used for emerging technologies such as VDSL where the equipment needs to be much closer to the home to deliver very high bandwidth services. An optical fibre would deliver the high-speed services to the local green cabinet and VDSL used to send them along the copper pair to the consumerís premises.

The equipment that transfers the incumbentís line to the other operator is adjacent to the PCP (the cabinet by the side of the road) rather than the telephone exchange. This arrangement will be used for distributing very high bandwidth services, which can only be sent a short distance on the copper pair.

History of LLU

In November 1999, Oftel issued a statement, Access to Bandwidth: Delivering Competition for the Information Age, which set out its decision to require BT to make its local loop available to other operators.

The Statement set out Oftelís conclusion that the opening up of the local loop was necessary to introduce competition into the provision of higher bandwidth services such as high speed always on Internet access and video on demand.

The statement also concluded that local loops should be available at cost based prices (which Oftel would determine). The requirement for BT to provide loops would be through a licence condition to be inserted in BTís licence (see Annex C). The statement also set out Oftelís approach to BTís wholesale DSL service.

To take this work forward, four industry groups were set up. These activities have been co-ordinated by a Focus Group, chaired by Oftel since September 2000. The groups focussed on Trials, Products and Processes, Commercial Issues and Contracts.

Legal framework for LLU

A new condition (Condition 83) was inserted into a BTís licence in April 2000. Condition 83 came into effect on 8 August 2000.

Condition 83 sets out the co-location products BT must offer, the conditions which apply to the supply of these products and unbundled loops, how the prices will be set and how disputes can be resolved.

In September 2000, Oftel published guidelines on the application of condition 83. These can be found at

On the 25th July 2003, following implementation of the new directives BTís licence fell away, as did their obligations under it. However there was a continuation of Condition 83. Continuations are implemented where conditions cannot be replaced by new conditions of entitlement until the relevant market reviews are completed and implemented.

EC Regulation on Local Loop Unbundling (EC/2887/2000) came into force on 2 January 2001. The Regulation requires incumbent operators throughout Europe to offer unbundled access to their local loops on reasonable request. Condition 83 sits alongside the Regulation and provides the detail, which may be needed to ensure that the Regulation can be applied effectively in the UK. The text of the Regulation can be found at:

As well as mandating local loop unbundling, the Regulation also requires the incumbents to offer shared access and sub-loop unbundling. Both BT and Kingston have published reference offers, as required under the Regulation. The BT reference offer can be found at while the Kingston offer is at:

Key LLU Directions

ANF Agreement determination
In September 2000, Oftel was asked to investigate certain conditions in the Access Network Facilities (ANF) Agreement, the contract which operators need to sign to take LLU facilities. The full text of the determination can be found at:

Provision of co-location in the form of co-mingling
Co-mingling is a form of physical co-location where an operatorís equipment is fitted and operated in an area within a BT exchange where BT could or does house its own equipment, without a permanent barrier between them.

Oftel initiated an own-initiative investigation on 23 March 2001 following a request for co-mingling from an LLU Operator. On the 10 October 2001, Oftel published its final direction providing that BT shall meet all requests for co-mingling unless, it is impracticable to do so on technical grounds or it would impair the integrity of any Applicable System run under the BT Licence. The full text of the direction can be found at:

Service level agreements (SLAs)
SLAs set out the timescales within which BT is required to provide the various elements necessary for LLU service. During May 2001, a group of operators participating in the LLU process asked Oftel to decide a dispute between them and BT in respect of SLAs.

On 15 November 2001, Oftel published the final statement and direction setting out the service levels that BT must offer to operators. BT must pay compensation if it fails to meet the service levels set out in the document. The full text of the statement and direction can be found at:

LLU Backhaul services
LLU backhaul is a wholesale service which provides capacity between an LLU operatorís (LLUO) equipment at a BT local exchange and an LLUOís point of interconnection with BTís network.

On the 8 August 2002, Oftel published its final direction setting out a requirement on BT to provide cost oriented backhaul services. The full text of the direction can be found at:

Charges for power at BT exchanges
In February 2002 the Director initiated a complaint-based investigation into the charges published by BT for Power. Essential systems supply (ESS) is a means of providing emergency AC mains-voltage power in BTís operational estate under mains power outage conditions.

On 25 February 2003, Oftel published a direction setting the charges for the three elements that make up power. The full text of the direction can be found at: 




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