In February 2001 the Government set the UK a goal - "to have the most extensive and competitive broadband market in the G7 by 2005"1. The E-envoy's UK Online Action Plan2 set out a blueprint for achieving this, and the Government appointed Broadband Stakeholders Group was tasked with making implementation recommendations. Despite these efforts, in terms of broadband penetration the UK currently ranks a dismal 22 out of the 30 OECD countries3. To date, the Government's efforts have largely focused on stimulating consumer demand for broadband services. Many argue, however, that the root cause of broadband's failure to thrive lies within the UK regulatory regime.
This article considers key regulatory aspects of two broadband case studies from the telecoms sector, and one from digital broadcasting, and draws some lessons for the forthcoming 'converged' Communications Bill regulatory regime.
Local Loop Unbundling ('LLU')
In the UK, LLU essentially refers to the process whereby BT's competitors ('OLOs') are granted regulated access to BT's local loop network to offer their own broadband (and voice) services. To do this, OLOs require physical access to BT's network infrastructure (local exchanges, ducts etc) to install and maintain their own equipment.
Much of the regulatory debate has centred around the terms on which this physical access will be provided - in particular whether the standard form ANF (Access Network Framework) Agreement terms BT proposed were 'reasonable' as required by Condition 83 of BT's Licence. Sticking points included access prices, equitable allocation of exchange space, physical access arrangements, and service levels. While Condition 83 was inserted into BT's Licence in April 2000 - taking effect in August that year - negotiating the ANF terms has been a protracted process, with the OLOs referring several disputes to OFTEL for determination. At the time of writing, a dispute over service levels is still ongoing. In the meantime, of the 50 OLOs originally involved in the LLU process, only 5 are still participating4. BT claims the withdrawals indicate a lack of demand5. Critics argue the high drop-out rate is an indictment of the protracted delays inherent in the regulatory process. They claim these, exacerbated by the lack of real incentives for BT to negotiate, made further participation by many competitors uneconomic. Whatever the reason, to date only 150 lines have actually been 'unbundled' for use by OLOs. In the...