Wednesday, September 21, 2005

openreach to Operate BT's Local Access Network

BT and Ofcom, the telecom regulatory authority in the UK, formally accepted a new regulatory framework for the local access network infrastructure operated by BT in the UK.

BT unveiled openreach, a separate operating company, that will ensure that all service providers have transparent and equal access to the local BT network. openreach, which will be operational from January 2006, will be responsible for operating and maintaining the "first mile" infrastructure that connects homes and business to BT exchanges across the UK.

BT welcomed the landmark regulatory settlement as a "defining moment" for the industry. The company predicted it would usher in a new era of investment and innovation.

  • In June 2005, BT reached an agreement with Ofcom, the telecom regulatory authority in the UK, to avoid the break-up of the company and provide a long-term framework for the UK's fixed line telecommunications market. Under the agreement, BT will set-up a new - and operationally separate – business unit with a distinct new brand and identity. The new business unit will be staffed by around 30,000 employees presently responsible for the operation and development of BT's local access networks. It will have separate physical locations for management teams and separate bonus schemes with long-term incentive plans that reflect the objectives of the new business unit, not those of the BT Group plc. The new business unit will be required, through a set of formal rules on governance and separation, to support all providers' retail activities (including those of BT Retail) on a precisely equivalent basis. The new business unit will offer a universally available product and service set, including Local Loop Unbundling (LLU), shared loops (where BT Retail continues to provide voice services and another provider is responsible for broadband), Wholesale Line Rental (WLR), and Backhaul service. Equivalence of Input will also apply to IPStream - BT's wholesale internet products used by many Internet Service Providers (ISPs) to provide broadband connections for their customers.

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