BT is struggling to hand over lines to rivals
BT has admitted that a vanishingly small fraction of the projected number of telephone lines have been handed over to competitors.
And this has left BT with a multi-million pound bill for alterations to its exchanges to host the equipment few firms seem willing, at this stage, to install.
The blame for the collapse of interest has been put down to the loss of confidence in technology companies and the general economic downturn.
Tiny bundle
European regulators are keen to promote competition over telecommunication services to home and businesses via a process known as local loop unbundling (LLU).
This requires telecommunication companies with monopoly control of the lines that link a customer's home or office to the exchange (the local loop) to make it easy for rivals to take over these links.
Once a firm has control of the line between itself and customers, it can offer its own-brand net services.
The regulations demanding that local loop unbundling be available came into force in January 2001, almost six months earlier than originally planned.
The timetable was brought forward to meet the demands of technology companies which were expected to besiege monopoly telecoms with requests for access to exchanges.
Huge demand
In the UK, BT said it initially expected to get requests to take over 1.2 million telephone lines and accommodate up to 40 rivals in the most popular of its 5,500 exchanges.
At one point BT was contemplating deciding which lucky few got access to its cramped exchanges by making the competitors roll a dice. The company rolling the highest number would get the coveted spot.
But almost 10 months after the LLU process began, BT has handed over a tiny fraction of the expected number of lines to rivals. Only 150 lines have been unbundled - just over a 10th of 1% of the initial projected volume.
"We have been disappointed that take-up has been slower than expected," said Ian Stirrat, head of LLU implementation for BT.
There hasn't even been much interest from companies that want to put equipment in their own street cabinets and avoid the high cost of maintaining secure rooms inside exchanges.
Mr Stirrat said BT had prepared for a deluge of requests by creating a computerised order placement system that let rivals order and book the lines they wanted in only a few minutes.
Picking up
BT has also built rooms in 58 exchanges to host rivals' equipment. Similar rooms are being built in a further 100 exchanges, and it has drawn up plans for another 1,000 exchanges.
Mr Stirrat said the reluctance of its rivals to take over local loop lines had left BT with a multi-million pound bill that would have to be recovered over the next few years.
The fall in demand for unbundled lines has been put down to the slumping confidence in technology firms, which have found it difficult to raise cash to pay for their ambitious plans.
BT has also faced criticism for dragging its heels over the unbundling timetable and for inflating the costs associated with hosting rivals' equipment.
But Mr Stirrat said that demand had improved in the last couple of weeks. Business communications company Fibernet is due to launch its services this week and has plans to expand its own-brand high-speed net services to another 191 exchanges beyond the 27 it is already using.