Select Committee on European Union Written Evidence

eEurope section 2—Cheaper Internet Access


Incumbents should offer unbundled local loops under non-discriminatory terms and conditions in order to allow all operators to provide innovative services.

  34.  As outlined above, OFTEL has decided to implement Local Loop Unbundling in the UK. OFTEL expects that the legal framework for Local Loop Unbundling should be in place before June 2000, and trials of Local Loop Unbundling are due to start before the end of 2000. From September 2000 all operators will be able to place orders for space in BT's local exchange buildings. BT will prepare this space over the following months to enable operators to deliver services to customers by July 2001 at the latest. The deadline for full launch is July 2001, and OFTEL is working closely with BT to see if the overall timetable could be improved.

Leased line tariffs should be significantly reduced, including cross-border leased lines.

National leased lines

  35.  OFTEL recognises that leased lines are an important service which many UK businesses purchase, and are a particularly important cost input for the development of e-commerce in the UK. OFTEL's review (carried out in 1999) of international leased line price comparisons suggests that, while the UK is broadly comparable with other European countries, its competitive position has been eroded and, in relation to the US, it appears that for most types of user US leased line price levels are below those in the UK.

  36.  OFTEL has launched a review of the regulatory framework relating to national leased lines. The plan is to complete the review and publish a Statement by October 2000.

International leased lines

  37.  Following its recent investigation of competition in international markets, OFTEL concluded that the majority of the most commonly called international leased line routes are becoming increasingly competitive. OFTEL expects that this increasing competition will lead to reductions in prices.

Licence requirements for communications services should be significantly lightened and as far as possible individual licences should be replaced by general authorisations.

  38.  Many Internet Service Providers in the UK already operate under general authorisations (known as class licences). Under the 1984 Telecommunications Act, only persons running telecommunication systems need to be licensed. This means that those Internet Service Providers who are, for example, simply reselling services without doing any switching do not need any kind of telecommunications licence. DTI Ministers have indicated that general policy on regulation of the communications industries will be the subject of a White Paper later this year. OFTEL is actively contributing to work on that document.

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