1. Implementing Oftel’s Broadband Strategy John Russell 12 July 2002

2. Outline Oftel’s broadband strategy Key recent decisions Market developments

3. Oftel’s broadband strategy Goal = quality, choice and value for money How - by promoting network competition and competition in the supply of services Technology-neutral approach Intervention focused on bottlenecks caused by BT dominance Quarterly surveys, ad hoc research and international benchmarking (Sarah Evans)

4. Key recent decisions BT’s ADSL products BT Marketing ATM Interconnection Local Loop Unbundling (LLU) Partial private circuits (PPCs)

5. Recent decisions - BT’s ADSL products Pricing - margin between BT’s wholesale and retail prices (SPs) Pricing - absolute level of wholesale prices (LLUOs)

6. Recent decisions- Marketing statement (21 May) Enable consumers to have easy access to information on what services are available to them Make clear how BT can market its services without acting anti-competitively Oftel will closely monitor BT’s compliance

7. Recent decisions- ATM interconnection (21 June) BT directed to provide ATM interconnection to other operators, to enable them to offer ADSL services BT also required to run a trial for an SDSL version of the interconnection service

8. Recent decisions - LLU March 2001, complaint that BT did not offer a ‘nearest equivalent’ to BT’s own facilities Directions of Oct 2001 (Co-mingling) and Dec 2001 (Access) Lower prices for co-location. Set-up dropping significantly

9. Recent decisions - PPCs PPCs allow operators to compete with BT in the leased lines market March 2001, Oftel required BT to negotiate provision of PPCs with 10 operators BT launched PPCs on 1 August 2001, Oftel received requests for determination on 2 August

10. Recent decisions - PPCs Requests for Determination from 8 OLOs split into 2 Phases: –Phase 1 - direction requires BT to make a number of improvements to its wholesale leased lines products (14 June) –Phase 2 - will resolve the more complex issues eg pricing and SLAs. Consultation August, decision October 2002

11. Market developments - availability ADSL - 66% (1115 exchanges) June 2002 - BT ADSL order registration system Cable modem access - 38% Satellite - 100% BFWA - 13%

12. Market developments - prices, April 02 Source: Oftel International Benchmarking reports, based on ADSL and cable modem tariffs valid as at April 02.

13. Market developments - take up Source: Oftel.

14. Prices are down 20k new connections a week Service provider competition - DSL Network competition - cable Satellite and BFWA developments Interest in LLU Conclusions