On 23 December 2002, Oftel issued a Direction finalising a new pricing and quality of service regime for BT's wholesale business broadband services. This was the conclusion of a consultation Oftel launched in September and will allow operators to compete more effectively with BT in the retail market for leased lines.

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 incurs in providing these services. The amended charges will be backdated to 1 August 2001 when PPCs were first introduced by BT.

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.

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.

Overall, Oftel believes that UK businesses should benefit considerably from this decision as operators will be able to offer them more competitive prices and guarantee high levels of service.

The Direction is available on Oftel's website at www.oftel.gov.uk/publications/broadband/leased_lines/ppc1202/direction.htm.

For further information, contact John Russell (tel: 020 7634 8830 / e-mail: john.russell@oftel.gov.uk) or Kalpesh Brahmbhatt (tel: 020 7634 8826 / e-mail: kalpesh.brahmbhatt@oftel.gov.uk).