BBC News Online: Business

Oftel move heralds cut-price surfing

The failure by Oftel, the telecoms regulator, to set charges until now for access to broadband 'local loops' has been blamed for the long delay in rolling out plans by internet service providers to provide high-speed unmetered access to the web.

Oftel said it was proposing charging operators £118 in annual rent for a loop in addition to a £95 connection charge.

Oftel's director general, David Edmonds, said: "This is another important step towards local loop unbundling.

"Operators now have a clear idea of how much they will have to pay to have loops connected to their equipment.

Competition encouraged

"I am confident that these charges are at a level that will encourage competition in the provision of broadband services," Mr Edmonds said.

"They will allow other operators to provide new, higher bandwidth services to consumers at competitive prices."

The proposed charge for an internal tie cable connecting 100 loops to an operator's equipment is £21 annual rental plus a £1,433 connection charge.

Oftel said it was asking for comments on its proposals by 4 December, following which it would determine finally the charges operators would face.

Plans call for the charges to take effect on 31 December and remain fixed until 1 April 2002, when they will be reviewed.

"BT has begun work to prepare exchanges for the installation of operators' equipment," Mr Edmonds said.

Oftel said its proposed charges would allow BT to recover reasonably incurred costs plus a return on capital.