Lots of room at the exchange

The queue for access to BT's exchanges is shrinking

By BBC News Online internet reporter Mark Ward

Broadband Britain has suffered another blow.

So many companies have abandoned plans to offer high-speed net services that a system to allocate space in local telephone exchanges has been ditched.

The allocation process was brought in to give equal opportunity to all the companies eager to put their equipment in telephone exchanges to create their own fast networks.

But delays and funding problems have meant many companies have scaled back their plans.

In some exchanges a quarter of the expected number of applications have been received.

Choose your weapons

Late last year, the telecoms industry drew up the "bow wave" process to manage the competing claims of companies wanting to put their equipment in some of the 1,500 or so BT exchanges where fast net services were likely to be popular.

The process was needed because initially far more operators wanted access to BT's exchanges than there was room to accommodate.

BT's rivals are getting access to its exchanges as part of a local-loop unbundling process which should boost competition for services and reduce BT's monopoly on domestic phone lines.

Telecoms watchdog Oftel got the job of running the bow wave process and first used it in September 2000 to allocate space in the 360 least popular of the 1,500 exchanges.

Response rates

But the low number of applications for this first try prompted Oftel to accelerate the process and in December it was used again to share scarce space in the most popular 360 exchanges.

While the selection process was running its course, many net companies abandoned plans to offer high-speed net services. So many, in fact, that Oftel has now abandoned bow wave.

"It is not being run anymore," said an Oftel spokesman. "Some companies have dropped out and we do not have such a high level of demand for space."

To date eight companies have withdrawn from the bidding for space, with some exchanges reportedly only getting applications from two companies rather than the expected eight or nine.

Rolling dice

An Engergis spokeswoman said the company wished to make it clear it had not withdrawn from the bidding process, contrary to previous reports.

Unbundling casualties

Thus

Kingston Communications

Global Crossing

World Online

Telewest

NTL

KPNQwest

At the moment, BT is the only company offering high-speed net connections to homes with a technology known as Asymmetric Digital Subscriber Line (ADSL), though many other companies are reselling this service under their own banner.

But once companies have access to the local exchanges, they will be able to set up their own national networks and offer their own ADSL services. It is likely that this extra competition will lead to lower prices and better service for businesses and Britain's keenest net users.

The Oftel spokesman says dropping the bow wave allocation system should speed up and simplify the whole process, because companies can now go straight to BT to request space in an exchange rather than submit an application to Oftel and then wait to be told if they have been successful or not.

The Electoral Reform Society was engaged to run the process of allocating scarce space to interested companies. Oftel's initial plan for allocating space when there were too many applicants was to make the companies roll a dice.

The company rolling the higher number would get the space within the exchange.