Select Committee on Trade and Industry Appendices to the Minutes of Evidence


Memorandum submitted by the Federation of the Electronics Industry


  Oftel has come under considerable media criticism for its handling of Local Loop Unbundling to date and there is a prevailing perception that Oftel's initial performance in this area has been less than optimum. FEI welcomes the recent publication of Oftel's Draft Consultation Document on the allocation of space in BT exchanges, which sets out to provide a clear cut dispute resolution process. Coupled with Oftel's undertaking to put in its own inspection team to verify any BT claim of insufficient space we anticipate that Oftel will bring the current confused and unsatisfactory state of affairs to good order very soon. However, Oftel will need to ensure that sufficient resources are made available to carry out the inspections in the required timescale.

  Looking beyond the current debate, a number of serious practical issues remain related to the implementation of new broadband technologies in the UK, the development of a new EU regulatory framework, and the way in which the convergence of telecommunications and broadcasting is to be addressed in the UK.


1.   The impact of the Radiocommunications Agency's draft emissions standards on the rollout of high-speed data access in the UK

UK's Radiocommunications Agency wishes to publish a "de facto" technical compliance standard (MPT 1570) intended to enforce and control emission limits fro telecommunication lines using high-speed data, such as DSL. The RA's objective is to protect radio spectrum for other legitimate users. However, this all-encompassing standard could effectively prohibit the rollout of broadband access in the UK.

  FEI is concerned that:

    —  this draft standard is already discouraging the rollout of high-speed data services, and is delaying in the government's objectives for e-commerce in Britain;

    —  the high cost of implementing the standard, estimated to be in the order of several billion pounds, and the prohibitive nature of this cost for SMEs and new players in the unbundling of the local loop. (The existence of the standard could either impose new de facto design limits or lead to much higher installation costs);

    —  there remains considerable uncertainty as to the meaning of "telecommunication systems", as other communications systems using similar technology have not been traditionally termed as such;

    —  the legal validity of a Member State issuing a national regulation in contravention to the obligation (under the EMC Directive and its nationally transposed law) for Member States only to use harmonised standards, and of the implications of this as a technical barrier to trade;

    —  the lack of publicly available evidence to support the need for the stringent limits contained in the RA standard; and

    —  the continuing non-appearance of the proposed "Wireless Telegraphy (Control of Interference from Telecommunications Systems Utilising material Substances)" Regulations, under whose legal framework the MPT 1570 is intended to operate.

  Question:—Whilst recognising the need to protect radio spectrum for legitimate users, changes to the electromagnetic environment need to be addressed the proper European and international fora. MPT 1570 appears to be a case of the various arms of government and regulators not acting with the same technical and political objectives. What are OFTEL, RA and DTI doing to address this matter?


  Current unbundling activities have focused on making available full loops from the Main Distribution Frame in the existing exchange building to the customer. Currently deployment trials and plans are focusing on ADSL and SDSL technologies, which can make use of these full loops.

  However the proposed regulation mandates that "sub-loops" should also be made available, where this is technically feasible. This would in theory give access to BT's copper loop at a point much closer to the customer, eg the familiar green box (Primary Connection Point) in the street with optical fibre being used to take the signals back from the cabinet to the operator.

  This so-called "Fibre to the Kerb" architecture is an essential element when using the emerging technology of VDSL which can achieve much higher bandwidths (up to say 25 Mbit/s downstream with 3 Mbit/s upstream) but with the penalty of only being able to transmit over less than 1 km.

  Ad hoc implementation of sub-loop unbundling in a popular area could lead to large demand from operators for access to particular cabinets with a large amount of civil works to install additional cabinets and install new ducts for optical fibre. This potential bottleneck could seriously impede the rollout of VDSL.

  Question:—How is sub-loop unbundling to be implemented to:

    —  meet the requirements of the regulation;

    —  keep the UK at the forefront of delivery of broadband services;

    —  achieve competition; and

    —  prevent major civil works and the resulting inconvenience to the public?

3.   New EU Regulatory Framework

  Under the current EU telecommunications regulatory framework operators and manufacturers are still faced with EU regulations that are implemented very differently in the Member States.

  Under the proposals contained in the new EU regulatory framework, the scope will be extended to cover all "electronic communications", extending the reach of regulation to new areas such as mobile, the internet and data interconnection. Unless appropriate balances are put in place to ensure that NRAs implement EU legislation in an effective, appropriate and timely manner there is a real risk that the single market for electronic communications will become even more fragmented. Given the importance of electronic communication in the new economy this could have a significant impact on the European Union's competitiveness.

  Articles 6 and 16 of the Commission's proposed Framework Directive would give the Commission a stronger role in ensuring that NRAs consult widely before implementing measures and would provide an effective mechanism for ensuring the compatibility of such measures with Community law. However, these articles have met with almost universal opposition from the Member States.

  Question:—Given Oftel's opposition to Articles 6 and 16, what other mechanisms could be employed to ensure that the new regulatory framework does not result in the imposition of more national sector specific regulation rather than less?

9 November 2000

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