ADSL (Asymmetric Digital Subscriber Line) - Description
ADSL is a type of broadband technology that allows for digital data to be sent at high speeds along already-existing copper telephone lines, while allowing for the transmission of analog (voice) data at the same time. ADSL is Asymmetric in that...
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UK Broadband Deals - Local Loop Unbundling Brings More Competition
The local loop is currently owned by BT in the United Kingdom
but as of 13 January 2005, 31,000 local loop connections have
been unbundled. While this is short of the target of 50,000
Ofcom hopes that 1 million local loop connections will be
unbundled by June 2006.
LLU is generally opposed by the Incumbent Local Exchange
Carriers (ILECs) such as BT, which in most cases used to be
state monopoly enterprises before the telecommunications sector
was liberalised. They argue that LLU amounts to a regulatory
taking, that they are forced to provide competitors with
essential business inputs, that LLU stifles infrastructure-based
competition and technical innovation because new entrants prefer
to 'parasitise' the incumbent's network instead of building
their own and that the regulatory interference required to make
LLU work (e.g. to set the price) is detrimental to the market.
New entrants, on the other hand, argue that, since they cannot
economically duplicate the incumbent's local loop, they cannot
actually provide certain services, such as ADSL, without LLU,
thus allowing the incumbent to monopolise the respective market
and stifle innovation.
They point out that alternative access technologies, such as
Wireless Local Loop (WLL) have proven uncompetitive and/or
impractical, and that under current pricing models,
the
incumbent is guaranteed a fair price for the use of his
facilities, including an appropriate return on investment.
Finally, they argue that the ILECs generally did not construct
their local loop in a competitive, risk-fraught environment, but
under state monopoly protection and using taxpayer money, which
means - according to the new entrants - that ILECs ought not to
be entitled to continue to extract monopoly rents from the local
loop.
Telecoms watchdog Ofcom has previously said that LLU is the
most effective way of delivering more innovation, greater choice
and lower prices in broadband. Put simply, it allows operators
the chance to offer higher speeds, lower prices and extras such
as cheap net telephone calls, without having to wait for BT to
offer them first.
Most developed nations, including the USA and the EU Member
States, have introduced regulatory frameworks providing for LLU.
Given the above-mentioned problems, regulators face the
challenging task of regulating a market that is changing very
rapidly, without stifling any type of innovation, and without
improperly disadvantaging any competitor.
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