This fact sheet outlines the background to Local Loop Unbundling (LLU) and gives an update on current progress. It has been designed to answer the most frequently asked questions on LLU. The current progress is summarised on a monthly basis. This is followed by a series of Annexes which give detail on what LLU is and are designed to answer the most frequently asked questions.

Contents

Current progress – an update of the major advances over the past month.

Annex A

Annex B - History of LLU

Annex C - Legal Framework for LLU

Annex D - Pricing of LLU

Annex E - Statistics

Annex F- Consumer questions and answers

Annex G- Glossary of terms

Annex H - Completed cases

Progress update - October 2002

This update reports progress made with Local Loop Unbundling (LLU) since the last update in September. It is not a complete overview of the LLU process, but gives a snapshot of the current issues.

Since the last update, 12 physical co-location sites have been completed. Work is continuing at 21 physical and nine distant location sites. In total, at the end of October, 103 physical and 53 distant location sites have now been completed.

Current state of the LLU rollout

1. Co-location at BT's exchanges

At the end of October 2002, 103 sites have been completed and construction is underway at a further 21 exchanges. Since the last update, work has been completed at the following 12 sites:

Bishopsgate (London)
Bloomsbury (London)
Fulham (London)
Hampstead (London)
Kings Cross (London)
Maida Vale (London)
Mayfair (London)
Paddington (London)
Soho (London)
Southbank (London)
Wapping (London)
Whitehall (London)

Details of the other 91 completed sites can be found in Annex E - Statistics

During October, build was cancelled at 31 sites. These sites have not been included in the tables below. Work continues at the following 21 sites (duplicate sites indicate that more than one operator has requested work):

Since the last update, build has been requested at the following site:

2. Distant location

Work is ongoing at the following nine sites:

The details of the 53 completed distant location sites can be found in Annex E - Statistics.

3. Oftel Investigations

Co-mingling

The investigation into the mechanisms employed by BT when setting co-mingling prices continues

Annex A

What is Local Loop Unbundling

Local Loop Unbundling (LLU) is the process where the incumbent operator (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.

Physical space within the incumbent’s site

BT offers operators several options for co-location within its exchanges. The location of an operator’s 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)
• 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 incumbent’s operations.
• a mini hostel (where less than four operators wish to share space within the exchange)
• a co-mingling facility (where an operator’s equipment is fitted and operated in the same area in an exchange as BT houses its own equipment without any physical separation)
• a bespoke arrangement (where the operator has non standard requirements)
• an in-curtilege facility (where operators locate their equipment outside of the exchange building but inside the exchange grounds e.g. in a car park).

Distant Co- Location

Another option available to operators is distant location. This is where the operator houses its equipment away from the incumbent’s building and uses a tie cable to connect the incumbent’s exchange with this remote site. The remote site can be a building or a ‘green cabinet’ on the side of a road.

Shared Access and Sub-loop unbundling

The EU Regulation on LLU requires incumbents to offer shared access (or line sharing). Line sharing enables 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.

The EU Regulation also requires that other operators can interconnect with the local access network at a point between the incumbent’s 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 (PCP’s), 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 consumer’s premises.

Full unbundling - before

 Each pair of copper wires run from the customer’s home to the primary connection point (PCP). The PCPs are the cabinets that are located at the side of the road. The PCP connects the wires from the customer’s 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.

Full unbundling - After

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

Distant Co-Location

Distant co-location is a form of unbundling where the operator’s equipment is located in a building outside of the incumbent’s exchange.

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.

Line Sharing

 Line sharing is a form of local loop unbundling where the incumbent and other licensed operator share the same 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.

Sub-loop unbundling

Sub-loop unbundling is a form of unbundling where the line is handed over to the other operator outside of the telephone exchange.

  The equipment that transfers the incumbent’s 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.

Annex B

History

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. This followed a 12-month consultation.

The Statement set out Oftel’s 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 introduction of competition into this area should mean a wider range of services to consumers and better value for money.

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 BT’s licence (see Annex C). Oftel would conduct a policy review of the position on LLU after four years and then at two yearly intervals. The statement also set out Oftel’s approach to BT’s wholesale ADSL service.

Business as usual

In February 2001 the Bow Wave process (a demand management process which aimed to ensure that sites were prepared in the order of operators’ collective priorities) was suspended as BT has sufficient capacity to deal with 100 co-location and 100 distant locations each month. After taking operators’ current forecasts into account, BT concluded that it could meet this demand. From April 2001 operators are able to place orders on a ‘business as usual’ basis with BT. This means that operators will be able to place orders for co-location at any of BT’s exchanges and can submit orders anytime they wish. This is similar to how operators now order wholesale products such as interconnection from BT.

Annex C

Legal framework for LLU

A new condition (Condition 83) was inserted into BT's 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 by clicking here

The EC Regulation on Local Loop Unbundling

The 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: http://europa.eu.int/eur-lex/en/lif/dat/2000/en_300R2887.html

As well as mandating local loop unbundling, the Regulation also requires the incumbents to offer shared access and sub-loop unbundling (described in Annex A). Both BT and Kingston have published reference offers, as required under the Regulation. The BT reference offer can be found at http://www.btinterconnect.com while the Kingston offer is at: http://www.kingston-comms.com/reg-unbundle.html.

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. As a result of the investigation, Oftel published a draft determination on 23 November 2000 detailing the areas of disagreement and some preliminary views. On February 21st 2001, the final determination was published. The determination includes the following measures: operators will be able to trade space in exchanges with each other, BT will have to pay compensation to operators if service levels are not met, operators can refer disputes about LLU to an independent expert, and BT's and operators' liabilities were capped. The full text of the determination can be found here.

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 (following a consultation), Oftel published a 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. For example, BT is required to 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. The full text of the statement and direction can be found here:

Annex D

Pricing of LLU

Background

In May 2000, Oftel published a consultation document proposing prices for operators leasing unbundled loops. Access to Bandwidth: Indicative prices and pricing principles, can be found here . The key principles when setting prices are that the price of the loop will be cost oriented, the starting charges should be geographically averaged and that BT should be able to recover the costs associated with setting up co-location facilities.

Wholesale prices

On 29 December 2000, Oftel published the final wholesale prices to be applied. Oftel’s statement can be found here . Operators taking an unbundled loop from BT will pay £122 p.a. plus a connection charge of £88. Oftel has also set the charges for the internal tie cables that connect the loops in exchanges to operators’ equipment or to the external tie cables in the case of distant co-location. For every 100 lines, the rental charge will be £21 p.a. plus a connection charge of £863. The connection charge for distant location cables will be £674, to which a per-occasion charge of £142, required to cover the set-up and costs of jointing the distant location internal tie cables to the external one, has to be added. This charge is paid only once per order of distant location internal tie cables.

Oftel has not determined a price for co-location facilities within BT’s exchanges. This is because each exchange requires a custom design to accommodate the required number of operators in the co-location options they have chosen. The price for co-location is set by BT after a full design has been undertaken. Operators can ask Oftel to determine prices for co-location facilities if any costs are disputed.

In March 2002, Oftel published a final direction setting out the charges for MPFs (loops) and internal tie cables (a cable that contains 100 metallic pairs that allow the connection between the unbundled loops and the operator’s equipment) that will apply from 31 March. Oftel directed that as the market for the provision of LLU services has not developed as quickly as originally anticipated, the price controls set out in the 2000 Determination will continue in force, until otherwise directed. The Director plans a review of regulatory provisions in the first half of 2003 (in accordance with the new European directives).

Shared access

During October 2001, Oftel issued a direction imposing changes to BT’s prices for shared access. Oftel has set an annual rental of £53 plus a one off connection charge of £117 per shared loop. These are lower than the charges proposed by Oftel in June and the rental charge is below the EU average. The full text of the direction can be found here

Site clearance

Oftel has confirmed that BT must not charge operators separately for clearing a site in preparation for co-location build in its exchanges, but must recover these costs through the rent charged for co-location space. The final direction on site clearance costs can be found here

Pricing investigation

During October 2001, Oftel’s investigation into the pricing of BT’s co-location services was concluded. In general the prices were found to be cost-oriented. However some prices were found to be too high. Oftel’s statement on the conclusion of the investigation is here . In January 2002, Oftel directed that BT must reduce the prices that were found to be too high as part of the October investigation (i.e. external tie cable rental and escorted access costs). The text of this final direction can be found here

Backhaul

Backhaul is the link between operator’s equipment at a BT exchange and an operator’s point of interconnection with BT’s own network. A final direction requiring BT to provide backhaul at a cost oriented price was published on 8 August 2002. Oftel has also ordered BT to reduce the price it charges for external tie cables (which link an operator’s equipment and a BT exchange when they are not in the same building). The text of the direction can be found at the following address:

Annex E

Statistics

Annex E

Statistics

General information about LLU

Total number of MDF sites in the UK Approx. 5,600

Number of fixed lines in the UK Approx. 35,000,000

Number of BT provided lines 28,900,000

Number of loops connected: 1600+

Up to date information on the progress of DSL is contained in the ADSL factsheet which is updated monthly. Click here to go to the ADSL factsheet

Sites indicated with an asterisk (*) have been requested by more than one operator.

Physical co-location sites - completed (103 in total)

Physical co-location sites in build (21 in total)

(duplicate sites indicate that more than one operator has requested work)

Distant location sites completed (53 in total)

Distant location sites in build (9 in total)

Annex F

Consumer questions and answers

1 How could I benefit from LLU?

LLU will enable you to have a high-speed data connection for internet or video on demand delivered through your telephone line. A number of operators are expected to offer these services. In addition, the option may exist for you to continue to use BT as your provider of telephony with the new operator providing high-speed services. LLU should bring more competition, which should help to cut prices.

2 What types of service will be offered using LLU?

The services offered will depend on the service provider. They may wish to offer voice calls but may also offer broadband services such as always on Internet access or video on demand.

3 Will I need a new phone line or equipment?

It should be possible to use your existing phone line for LLU services. An ADSL modem will need to be installed at the consumer’s premises to receive the higher bandwidth services and the operator will arrange this directly with the consumer once an order is placed.

4 Will my phone number change?

You can choose to keep your existing phone number. The initial charge may differ, depending on whether you keep your existing number or not.

5 Will I still have to pay BT line rental?

If you retain BT for your voice telephony services you will still pay the line rental and call charges to BT and pay the OLO for the broadband services. If you are taking all services from a new operator, you will be billed directly by the new operator.

6 How will taking LLU affect other services that I receive from my current provider?

If you take all of your service from your new provider, you will lose all services from your current provider and your contract with them will cease. If there are some supplementary services e.g. call waiting which you would not want to lose with your new provider, check with them first to find out if they are offering them. For more information, talk to the companies concerned.

7 What will it cost?

It depends on the provider. Before you sign any contract with a service provider they must tell you how much they charge, how often you will be billed and the methods of payment. Although Oftel has set the charges that BT must charge service providers for certain standard items, service providers will set the prices charged to customers. You will need to consider whether the service provider offers a good deal for your circumstances.

8 What if I change my address?

If you change your address and wish to keep LLU, you will need to contact your LLU service provider who will advise you what to do. It is possible that your service provider may not offer LLU in a different locality but in that event, other service providers may offer LLU there.

9 What if I have a fault?

Faults on your line should be reported to your service provider. Faults on telephony services provided by BT should be reported to BT.

10 Is it available in my area?

Oftel intends to name the sites at which LLU is provided when work at a site begins. We will not speculate beforehand on when LLU is likely to become available in a particular area. It is likely that operators will advertise in the local press or send literature directly to customers in the relevant areas once the service becomes available.

11 Will all customers connected to an exchange be able get LLU when the work is finished?

BT is making LLU available to other operators at all its exchanges. Subject to technical feasibility, all lines at an exchange are available to other operators for LLU purposes. Lines are suitable for LLU only if they are provided by a metallic (usually copper) path. Most lines are in this category. However, the service that can be delivered to a customer will be dependent on the technology that an operator is using and the distance from the exchange of the customer’s telephone line.

With DSL technology there is a trade off between data rate and the length of the telephone line. Longer lines mean a slower data rate and vice versa. As an example, the ADSL products offered by BT are available to customers whose telephone line is 3.5km or shorter and it is estimated that 80% of telephone lines in the UK fall into this category. BT wholesale has recently launched products which use a Rate Adaptive modem. This allows a percentage of consumers, currently too far from the exchange, to get ADSL albeit at a reduced speed. However, LLU allows other operators to make their own decisions about the maximum line length that they can support.

The areas where LLU services are made available, the products offered and the technology used are all commercial decisions that are made by each individual operator.

12 Which companies will be providing services?

Companies that are involved in Local Loop Unbundling include the following. Details of how to contact them are also attached:

Video Networks:

Ednet:

sales and marketing manager
Sebastien Robin, 0131 514 4015 sebastien@ednet.co.uk
Or 0845 1199 900 sales@ednet.co.uk

edNET
12 Dock Place
Edinburgh
EH6 6LU

Fibernet:

Bulldog:

Bulldog Communications Ltd
40 Portman Square
London
W1H 6LT

Main No: 020 7034 4666
Fax No: 020 7034 4667

Interested users can also contact us through our website,

www.bulldogcommunications.com or marketing@bulldogcommunications.com

Annex G

Glossary

Access Network Facilities Agreement (ANF Agreement): The contract which operators need to sign to take LLU facilities

Access Network Frequency Plan (ANFP): A plan that defines the maximum levels of signal that can be injected into the Access Network. All equipment connected to the network must comply with the plan.

Asymmetric Digital Subscriber Line (ADSL): A technology that provides high-speed data on an asymmetric basis. Typically a copper line is used to send a large quantity of data ( e.g. a television picture) in one direction and a small quantity (e.g. a control channel and a telephone call) in the other. Currently used for speeds of up to 2 Mb/s.

Backhaul: A wholesale service which provides capacity between an LLU operator’s equipment at a BT local exchange and an operator’s point of interconnection with BT’s network.

Bandwidth: The physical characteristic of a telecommunications system that indicates the speed at which information can be transferred. For ADSL, speeds of up to 2 Mb/s are offered, which are sufficient to transmit a video signal. Technologies such as VDSL offer the possibility of providing data rates of up to 15 Mb/s.

Bespoke arrangement: An arrangement made between the operator and BT to house its equipment in an exchange in a form other than a hostel. It will usually take the form of a custom designed room.

Bow wave: The industry designed Bow Wave process determined the order BT prepared exchanges in which competing operators wished to co-locate. It also set out the method for allocating space amongst operators in any exchange. The Bow Wave process has now been suspended.

Broadband: Most people connect to the Internet over a phone line, typically using a modem with a maximum speed of 28.8 or 56 kilobits per second. This "narrowband" communication requires users to wait while a dial up connection is made before they can access the Internet. Broadband services offer significantly faster data rates, enabling the delivery of services such as high speed Internet access and video on demand.

Co-location: The ability for other operators to install equipment in BT's local exchanges in order to supply services over the local loop. BT offers several options for co-locating within its exchanges (hostel, mini hostel, co-mingling, bespoke or in-curtilege arrangement).

Co-mingling: A form of physical co-location where an operator’s 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.

Digital Subscriber Line (DSL): A technology that allows the use of a copper line to send higher bandwidth services, such as fast internet and video) to a customer’s premises.

Distant co-location: This is where an operator houses its equipment away from the exchange and uses an external tie cable to connect the exchange with this remote site.

DSL technology: Digital subscriber line technology. A family of technologies generically referred to as DSL, or xDSL, capable of transforming ordinary phone lines (twisted copper pairs) into high speed digital lines, capable of supporting advanced services such as fast internet access and video on demand. ADSL (Asymmetrical Digital Subscriber Line), HDSL (High data rate Digital Subscriber line) and VDSL (Very high data rate Digital Subscriber Line) are all variants of xDSL.

Hand-over Distribution Frame (HDF): A distribution frame that connects to BT’s main distribution frame (MDF). An operator connects its DSL equipment to each pair via the HDF.