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| Local Loop Unbundling Fact Sheet - November 2001 | |
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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. Current
progress
– an update of the major advances over the past month. Annex
B - History of LLU Annex F- Consumer questions and answers October 2001This 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. The Annexes attached to this fact sheet give further information on LLU and are arranged in subject areas. Since the last update build has started at a further 4 physical co-location sites bringing the total number of sites currently in build to 9. During October, 4 physical co-location sites have been completed and are due to be handed over to operators shortly, bringing the total number of completed sites to 10. 4 more distant location sites have been completed, bringing the total to 45. The development of BT’s automated ordering system continues and during October the first order was placed using this new system. Oftel published a number of measures providing further clarification for operators planning to offer services over unbundled local loops. Further details are in Annex H Current state of the LLU rollout 1. Trial sites Four trial sites were established in January 2001 at Battersea, Edinburgh, Belfast and Leeds. The progress of the trial is being wound down as operators switch over to commercial service. 2. Co-location at BT’s exchanges During October, work has been completed at the following sites: Birmingham Central The site at Harrow has now been cancelled due to difficulties over planning permission. Details of the other completed co-location sites can be found in Annex E - Statistics Since the last factsheet, work has been commenced at the following sites: Derby These sites were ordered as part of the business as usual process. Work also continues at: Headingley (Leeds) Business as usual Business as usual came into effect during May. Over 80 requests for site surveys have now been placed, 4 of which (Derby, Nottingham Longbow, Maidenhead and Slough) have moved into the build phase during October. A further 7 contract offers have been sent to operators and the majority of the remaining site surveys should be with operators during October and early November. Since August, BT and operators have been in discussions concerning a new ‘in curtilage’ product. In curtilage describes the process where operators locate their equipment on BT’s land (e.g. within a car park). The trial of this product is due to start later this month. This new product will enable operators to have another option for gaining access to BT’s local loop. 3. Distant location Work has been completed at the 41 sites listed in the last fact sheet (for details of these sites see Annex E– Statistics). Since the last factsheet, work has been completed at: Leeds Work at the Aston Cross (Birmingham) and Central (Glasgow) sites have been suspended at the request of the operator concerned. 4. Oftel Investigations During October, Oftel published a number of measures providing further clarification for operators planning to offer services over unbundled local loops. Co-mingling Co-mingling is a form of physical co-location 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. Oftel has directed that BT shall meet all requests for co-mingling unless it is impracticable to do so (e.g. technical or network integrity grounds). The full text of the draft direction can be found at: http://www.oftel.gov.uk/publications/local_loop/comi1001.htm Access to BT’s exchanges for third parties Oftel has published a draft direction on access control which requests comments on how BT may control access to its exchanges by third parties installing and operating LLU equipment. Oftel proposes that operator’s staff and contractors should be allowed unescorted access to physical co-location space using existing access control arrangements at BT exchanges as long as they have ‘approved status’. The consultation period ends on the 7 November 2001and the full text of the draft direction can be found at: http://www.oftel.gov.uk/publications/local_loop/escac1001.htm Shared access On 18 October, Oftel published its final charges for shared access to local loops. Oftel has set an annual rent of £53 plus a connection charge of £117 per shared loop. These final prices are lower than those originally proposed and the rental charge is below the EU average. The full text of the direction can be found at: http://www.oftel.gov.uk/publications/local_loop/shac1001.htm Pricing investigation Oftel’s investigation into the pricing of BT’s co-location services has now been concluded. In general the prices were found to be cost-oriented. Some prices (e.g. for external tie cable rental) were found to be too high and were adjusted during the investigation. In other areas (e.g. escorted access pricing) Oftel has proposed changes in a draft direction which forms part of the concluding statement. This can be found at: http://www.oftel.gov.uk/publications/local_loop/colo1001.htm 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 at the following address: http://www.oftel.gov.uk/publications/local_loop/clear1001.htm 5. Forward view of Oftel’s LLU work
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 two 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, 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 incumbent’s 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. Distant Co- Location One of the options available to operators is distant location. This is where an 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 PCP’s 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.
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. 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. Bow wave process The Bow Wave process began when initial discussions between BT and the operators in May 2000 indicated that there was likely to be a very high level of initial demand. The process aimed to ensure that sites were prepared in the order of operators’ collective priorities. The first round of the bow wave was run on 12 September 2000. Oftel was asked to select these exchanges at the last minute, as operators were unable to agree on an allocation procedure. Oftel selected 361 sites for which BT could be asked to prepare initial surveys. Oftel also selected a further 20 sites in Northern Ireland, based on operators priorities, giving a total 381 sites for Bow Wave 1. The second round of the Bow Wave was run on 7 December 2000. The 360 top sites were selected. Advancement of Bow Wave 2 sites In January 2001 the first firm orders were due from operators to build co-location facilities at the first 25 sites from Bow wave 1 on the basis of BT's detailed designs and costings. However, orders were only received for 14 out of the 25 sites and at these sites only 1 or 2 operators wanted to proceed. As the co-location facilities were designed to accommodate all who had previously expressed interest, some of whom had already said they were withdrawing, the designs and costings for individual sites were no longer appropriate. Oftel and the industry therefore agreed to bring forward the sites from Bow Wave 2, which represent operators’ top priorities, in advance of Bow Wave 1 sites. Oftel has not published the details of the sites selected due to commercial confidentiality concerns raised by the operators. Pre-commitment In addition, it was agreed that changes to the process should be made so that designs and costings can be tailored to those operators firmly committed to ordering co-location. BT has now offered operators the option of placing firm orders before a detailed design is available. This will ensure that build of such facilities proceeds immediately after detailed design is completed, provided that the cost per operator does not exceed £33,000. BT has received such commitments from operators at a number of exchanges. Oftel will announce the sites at which such facilities are being prepared as soon as build begins. Business as usual In February 2001 the Bow Wave process 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.
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 at:http://www.oftel.gov.uk/publications/local_loop/llug0900.htm 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 at: http://oftel.gov.uk/publications/local_loop/anf0201.htm In response to the ANF agreement determination, BT published a revised reference offer. Oftel had concerns that the revised offer was not fully compliant with the determination. After discussions between BT and Oftel, BT has published a revised offer that Oftel is satisfied is compliant with the determination. 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, a group of operators participating in the LLU process asked Oftel to decide a dispute between them and BT in respect of SLAs. On August 23, Oftel published a draft determination, which proposes the levels of compensation BT must pay operators if it fails to provide services in accordance with these standards. For example, Oftel proposes that BT should 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 determination can be found at the following address: http://www.oftel.gov.uk/publications/local_loop/sla0801.htm The consultation closes on 20th September with 2 weeks for comments on comments ending on October 4th. Oftel intends to publish the final determination before the end of October.
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 at: http://www.oftel.gov.uk/publications/local_loop/llu0500.htm 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 at: http://www.oftel.gov.uk/publications/pricing/llup1200.htm 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. As explained in the progress update, Oftel is conducting an investigation into the prices quoted by BT for co-location facilities. The aim of the investigation is to determine whether the cost elements that BT has included in the final estimate submitted to operators are reasonable and cost-oriented as required by the EC Regulation. Shared access During October, 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 fill text of the direction can be found at: http://www.oftel.gov.uk/publications/local_loop/shac1001.htm Pricing investigation During October, Oftel’s investigation into the pricing of BT’s co-location services has now been concluded. In general the prices were found to be cost-oriented. Some prices (e.g. for external tie cable rental) were found to be too high and proposals have been made to change these charges. Oftel’s statement on the conclusion of the investigation is at the following address: http://www.oftel.gov.uk/publications/local_loop/colo1001.htm
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 ADSL connections Approx. 90,000 Number of LLU trial sites in the UK 4 – At Battersea, Leeds, Edinburgh and Belfast. Number of initial surveys carried out for LLU co-location: Over 700 Physical Co-Location Sites in Build Site name Reading Central
(Berks) Physical co-location sites – completed
Distant location sites in build Glasgow Central and Aston Cross have been suspended at the request of the operator concerned. 63 distant location sites are currently at the design stage. However the work on 58 of these has been suspended either on the request of the operator or because the operator has gone into liquidation. Distant location sites completed
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