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Friday, 19 January, 2001, 17:14 GMT
High speed go slow
By BBC News Online internet reporter Mark Ward
Britain's broadband revolution will not take off until next year at the earliest.
The news came out of an emergency summit called to find out why so few firms were signing up to offer high-speed internet connections.
Oftel, the telecoms watchdog in the UK, hopes that by ordering BT to open up some of its prime locations to the competition, reluctant companies can be persuaded to enter the broadband market.
But Oftel concedes that the technical demands of installing and testing a high-speed network mean that most of the new services will not roll out to customers until 2002.
UK surfers wanting faster net connections have been frustrated by the lack of high-speed DSL (digital subscriber line) services. And they will not come until broadband companies can get into telephone exchanges owned by privatised utility BT to install equipment.
The companies want space in these buildings so they can avoid paying BT for access to the cables that link consumers to their local exchanges. This competition should ensure that costs for net access are kept low.
Watchdog Oftel is overseeing the local-loop unbundling process, which will see the broadband wannabes install equipment in more than 700 of BT's 6,000-plus exchange centres.
DSL is not going into just any exchange. Limitations on the technology mean services can only be provided to surfers who live less than 3.6 kilometres from a telephone centre. And this has led to a list being drawn up to schedule the unbundling in areas where consumer demand is expected to be highest.
But to simplify the process, Oftel initially held back the prime sites on the list of 700. Even so, it expected a rush from broadband companies keen to get a slice of the action.
However, a lack of enthusiasm from the companies prompted Oftel to call an emergency meeting on Thursday to gauge industry opinion. Several issues were raised but perhaps the key result to come out of the summit was the watchdog's decision to tell BT to get the 360 most popular exchanges ready to host rivals' equipment.
The sooner-than-expected provision of space in these centres has led some firms, such as RSL Communications, to reconsider an earlier decision to quit the process. "Some companies seem to be dropping out and coming back in at a rate of knots," said an Oftel spokeswoman.
But despite the acceleration in the unbundling procedure, Oftel admits that it will be 2002 before large numbers of companies are in a position to sign up customers. "Many operators will want to get established in exchanges before they start rolling out marketing campaigns," said the spokeswoman.
Oftel is also looking at the way BT charges for access to its exchanges. Initially BT wanted to split the conversion costs between the companies wanting space in exchanges. If any company dropped out, the remaining ones were expected to make up the shortfall.
Can't wait, won't wait
"The cost that BT is charging operators is astronomical," said Richard Greco, chief executive of Bulldog Communications. "They are building gold-plated rooms for us."
Mr Greco said that in many other countries, such as Germany and the US, rival telecommunication companies happily shared space in exchanges. "What makes BT's network so unique that it has to build separate rooms?"
Some companies are not waiting for BT to prepare its exchanges. "Outside each exchange, we'll have out own cabinets with our own equipment in them," said Charlie McClelland, head of broadband services at Redstone Communications, which is planning to offer DSL to small businesses. It is starting DSL trials in Portsmouth in April and hopes to be offering a service to urban customers by July.
NTL is also setting up its own DSL network outside but does not expect to be taking on customers until next year. "We have our own network and do not see the need to take up BT's offer," said a spokesman.
"We can, and are, providing fast internet access into homes by cable modems and through digital offerings and that's the route we'll be taking in the foreseeable future," he added.
The delays have left net users eager to surf at high speed with few options. Currently, the only way consumers can get a DSL service is to sign up with BT or use one of the companies that is reselling that service.
BT was ordered to supply this service as a stopgap while local-loop unbundling was pushed through.
A division of the telecommunications giant, called BT Ignite, has been set up to resell it. However, demand for the DSL service has led to long delays for some between sign up and switch on.
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