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Reaction from service providers to LLU news
Thursday 13 May 2004 17:11:00 by Andrew Ferguson

Service providers have reacted very swiftly to today's price cut by BT, and the various announcements by Ofcom. Rather than run a long series of articles as each provider releases a statement, we will keep them collectively in one news item. The order is simply the order in which the various statements have arrived in our in-box.

"We welcome Ofcom's final statement on its wholesale broadband access market review. We agree with main findings of the review, in particular the importance of creating the right incentives for investment in DataStream. This will lead to greater innovation and competition, and improved choice and value for consumers. Much still depends on the outcome of Ofcom's IPStream-DataStream margin investigation, due at the end of May.

Furthermore, we welcome Ofcom's first consultation document on its local loop unbundling market review. We look forward to reading the document in detail, but are encouraged by BT's announcement on further price reductions as Ofcom's commitment to addressing the thorny process issues, which contributed to the failure of LLU first time round. Ultimately this should lead to increased innovation, choice and value for consumers."

Richard Sweet, Head of Regulation and Interconnect at THUS plc

"We welcome Ofcom's consultation on LLU and BT's announcement today that it will be reducing the cost of LLU by 70% over the next few months, bringing it in line with European pricing.

Cutting LLU costs will trigger a real broadband revolution in the UK by allowing Internet Service Providers to offer new, more flexible packages independent of BT's network."

Emma Guthrie, Wanadoo

"Bulldog is delighted with this announcement by BT on the heels of the results of the first phase of Ofcom’s Strategic Telecommunications Review. We believe that the only way to ensure long-term value and choice for the British consumer is through competition. In a wholesale LLU-friendly environment, the UK will experience similar growth to our European neighbours, attract more investment in broadband technology, while giving UK consumers a much broader selection of innovative services, at more price points."

Richard Greco, CEO of Bulldog

"BT have announced today that they will be cutting by 70%, the cost of Local Loop Unbundling. This is the process by which other competitors to BT gain access to the "last mile" of cabling into homes and businesses around the UK.

The announcement today has come 2 to 3 years too late and is in reaction to the new regulator, Ofcom, showing more "teeth" than its predecessor, Oftel towards BT's business model.

Claranet believe that BT have effectively hijacked the LLU process, which has been successful in other countries in Europe, and the timing of this price drop, demonstrates this. This has effectively retarded the take up of broadband in Britain and has still left BT with a virtual monopoly on the pricing."

Neil Levine, CTO of Claranet Group

We are sure there will be more reaction in the coming days and weeks, as every assesses the price changes, both within the LLU arena, but also with regards to the Datastream and IPstream market.


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