01 January 2000

THE LONG-RUNNING delaying action deployed by BT to defend its immensely profitable ‘local loop’ network has resulted in a victory for telecoms watchdog Oftel, which is to compel the telecoms giants to open its exchanges to competition by July 2001.

The loop - the copper wire connections between exchanges and homes - is a monopoly gifted to BT on its privatisation. Abolition of this licence to print money is certain to have a dramatic downward effect on prices and open the door to competition, especially in the realms of e-commerce and multimedia. Says Oftel direc-tor-general David Edmonds: ‘It is in the consumer’s interest that there is competition among operators which will encourage choice and drive down prices. Oftel, rather than BT, will set the prices for the local loop based on costs incurred by BT plus a mark-up’ .

Conceding defeat, BT chairman Sir Iain Vallance put a surprisingly brave face on it [although he will have known the outcome to be inevitable]: ‘BT has clearly lost the war on the new e-economy and we must deal as best we can with the consequences.’