LLU gradually approaches fruition

If you've been keeping up on the ADSL front, you may be aware that several companies, including Redstone and Easynet are trialling something called "local loop unbundling", and that there has been a lot of drama surrounding the subject, with Oftel forcing BT to pay as much as £400 million in compensation per year until adequate provision for the service is in place. Just what is local loop unbundling, or LLU, though? At the present time, BT controls the exchange lines that connect consumer to service, giving them substantial control of access to the individual customer. Operators like BT therefore enjoy freedom to offer far more services to residential and business customers than network startups. People like Freeserve or AOL require BT to link their networks to those under their control via what is called a "switched interconnection", such that the customer can access the ISP's service. This hasn't been so much of an issue in the past because straightforward dialups can be routed across BT's lines without issue. However, in recent times, companies (like Freeserve again) have suffered extraordinary pains to present unmetered Internet connections to customers because BT control the exchanges. Since there was no way to bypass the exchange system, the ISP was forced to pay whatever fees BT demanded for its use. Nowadays of course, ADSL is a reality, and consumers are eager to take up the various offers available. This is where BT's control of the exchanges favours them again. After all, BT control all access to their exchanges, and ADSL being a new service, competitors have to route all their enquiries and business through them. Currently, there is speculation that BT is using this dominance to favour its own ADSL supplier, BT Openworld, instead of spreading the load across rival providers who have equally needy pre-orders and sign-ups. There may even be a lawsuit as a result. The answer is known as local loop unbundling, hence LLU. It's similar to the way cable companies offer Internet access. After all, companies like ntl can do so without ever needing to go near BT, because they do it all via a cable embedded deep below your feet in the road. LLU is also a method of bypassing the exchange system, although equipment will be based in BT exchanges under ISP control - it gives direct access from customer to service provider, and as a result is a very attractive option to startups. Or at least it would be. The problem facing ISPs eager to strike out with their own LLU scheme once again comes from BT. In order for them to take advantage, BT must first allow them to unbundle the copper wire that consumers communicate over. By doing so, they can then provide an unbundled solution from the BT exchange without BT having any control over it. Which is of course something they will be happy to delay as long as they possibly can. Under terms dictated by watchdog Oftel, however, companies like Redstone and Easynet, operators that have signed up to LLU, must be paid £20 million for every year their progress with LLU is inhibited. BT will also have to pay immediate compensation to operators if service levels are not met once installation is complete. A month ago, Easynet became the first operator to successfully unbundle a copper wire from a BT exchange in Battersea. They are now conducting tests in the area. Similarly, Redstone Telecom said today that they will be trialling an LLU service near Portsmouth in the near future, and that by supporting LLU they had boxed clever. With any luck, ADSL services based on LLU will become available in the near future, and consumers will be in a position to subscribe to services controlled by their ISP and not manipulated by British Telecom. Related Feature - BT faces legal action over ADSL