LLU is generally opposed by ILECs, which are generally either former investor-owned (North America) or state-owned monopoly enterprises. ILECs argue that LLU amounts to regulatory taking, which causes them to be compelled to provide competitors with business inputs, so they believe that LLU stifles infrastructure-based competition and technical innovation because new entrants prefer to use the incumbent's network instead of building their own and that the regulatory interference required to make LLU work (e.g., to set the LLU access 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 provide certain services, such as ADSL, thus allowing the incumbent to monopolise the respective potentially competitive market(s) and prevent innovation. They argue that alternative access technologies, such as wireless local loop, have been proven uncompetitive or impractical, and that under current pricing models, the incumbent is in many cases, depending on the regulatory model, guaranteed a fair price for the use of its facilities, including an appropriate return on investment. Finally, they argue that the ILECs generally did not construct their local loop in a competitive market environment, but under legal monopoly protection and using taxpayer's money, meaning that, according to the new entrants, that ILECs should not to be entitled to continue to extract regulated rates of return, which often include monopoly rents from the local loop.
Most industrially developed nations, including the US, Australia, the European Union member states, and India, have introduced regulatory frameworks that provide for LLU. Regulators are tasked with regulating a changing market without preventing innovation and without improperly disadvantaging competitors.
The first action[which?] in the EU resulted from a report written for the European Commission in 1993. It took several years for the EU legislation to require unbundling and in individual countries in the EU, the process took further time to mature to become practical and economic rather than being a legal possibility. The 1993 report referred to the requirement to unbundle optical fibre access and recommended deferral to a later date when fibre access would be more common. In 2006, there were signs that, as a result of the municipal fibre networks movement in countries such as Sweden, where unbundled local loop fibre is commercially available from both the incumbent and competitors, there was a potential for policy evolving in a different direction.
The duty to provide, to any requesting telecommunications carrier for the provision of a telecommunications service, nondiscriminatory access to network elements on an unbundled basis at any technically feasible point on rates, terms, and conditions that are just, reasonable, and nondiscriminatory in accordance with the terms and conditions of the agreement and the requirements of this section and section 252. An incumbent local exchange carrier shall provide such unbundled network elements in a manner that allows requesting carriers to combine such elements in order to provide such telecommunications service.[1]
Section 5(a) of the GATS Annex on Telecommunications[2] requires WTO Members to guarantee service suppliers "access to and use of public telecommunications transport networks [...] for the supply of a service". New entrants have argued that without LLU, they cannot supply services such as ADSL.
Section 2.2(b) of the 1998 Reference Paper,[3] to which some Members have subscribed, requires "sufficiently unbundled interconnection" with major providers. However, the Paper's definition of interconnection appears to exclude LLU. Section 1 of the paper requires members to maintain "appropriate measures [...] for the purpose of preventing [major] suppliers [...] from engaging in or continuing anti-competitive practices." New entrants argue that such practices include not giving competitors access to facilities necessary for market entry, such as the local loop.
The question has not been settled before a WTO judicial body, and it is thought that these obligations may only apply where the respective WTO member has committed itself to open its basic telecommunications market to competition. About 80 mostly-developed members have done so since 1998.
India
This article's factual accuracy may be compromised due to out-of-date information. Please help update this article to reflect recent events or newly available information.(October 2014)
LLU has not been implemented in Indian cities yet. However, BSNL recently[when?] stated that it would open up its copper loops for private participation. The proliferation of WiMax and cable broadband has increased broadband penetration and market competition. By 2008, a price war had reduced basic broadband prices to INR 250 (US$6), including line rental without any long-term contracts. In rural areas, the state player, BSNL, is still the leading, and often the only supplier. Although BSNL is a monopoly, it is used by the government to create competition.
The implementation of local loop unbundling is a requirement of European Union policy on competition in the telecommunications sector and has been introduced, at various stages of development, in all member states as a postreference offer for unbundled access to their local loops and related facilities. The offers are required to be unbundled so that the beneficiary does not have to pay for network elements or facilities that are unnecessary for supplying its services, and are required to contain a description of the components of the offer, associated terms, and conditions, including charges.
European States that have been approved for membership to the EU have an obligation to introduce LLU as part of the liberalisation of their communications sector.
This article's factual accuracy may be compromised due to out-of-date information. Please help update this article to reflect recent events or newly available information.(September 2011)
On 23 January 2001, Easynet became the first operator in the mainland UK to unbundle a local loop of copper wire from British Telecom's network and provide its own broadband service with it.[4]
By 14 January 2006, 210,000 local loop connections had been unbundled from BT operation under local loop unbundling. Ofcom had hoped that 1 million local loop connections would be unbundled by June 2006. However, as reported by The Register[5] on 15 June 2006, the figure had reached only 500,000, but was growing by 20,000 a week. In November 2006, Ofcom announced that 1,000,000 connections had been unbundled.[6] By April 2007, the figure was 2,000,000.[7]
By June 2006, AOL UK had unbundled 100,000 lines through its £120 million investment.[8][9]
On 10 October 2006, Carphone Warehouse announced its purchase of AOL UK, the leading LLU operator, for £370m.[10] This made Carphone Warehouse the third largest broadband provider and the largest LLU operator, with more than 150,000 LLU customers.[11]
On 8 May 2009, TalkTalk, which was owned by Carphone Warehouse, announced that they would purchase Tiscali UK's assets for £235 million. On 30 June 2009, Tiscali sold its UK subsidiary to Carphone Warehouse following regulatory approval from the European Union. This purchase made TalkTalk the largest home broadband supplier in the UK, with 4.25 million home broadband subscribers, compared to BT's 3.9 million. The service was rebranded as TalkTalk in January 2010.
Most LLU operators only unbundle the broadband service, leaving the traditional telephone service using BT's core equipment (with or without the provision of carrier preselect). When the traditional telephone service is also unbundled (full LLU), operators usually prohibit selected calls being made with the networks of other telephone providers (i.e. accessed using a three- to five-digit prefix beginning with '1'). These calls can usually still be made by using an 0800 or other non-geographic (NGN) access code.
Although regulators in the UK admitted that the market could become competitive over time, the purpose of mandatory local loop unbundling in the United Kingdom was to speed up the delivery of advanced services to consumers.[12]
The Commerce Commission recommended against local loop unbundling in late 2003 as Telecom New Zealand (now Spark New Zealand) offered a market-led solution. In May 2004, this was confirmed by the New Zealand government, despite the "call4change"[14] campaign made by some of Telecom's competitors. Part of Telecom's commitment to the Commerce Commission to avoid unbundling was a promise to deliver 250,000 new residential broadband connections by the end of 2005, one-third of which were to be wholesaled through other providers. Telecom failed to achieve the number of wholesale connections required, despite the management making a claim that the agreement had been for only one-third of the growth rather than one-third of the total.[15] The claim was rejected by the Commerce Commission, and the publicised figure of 83,333 wholesale connections out of 250,000 was held to be the true target. The achieved number was less than 50,000 wholesale connections, despite total connections exceeding 300,000.
On 3 May 2006, the government announced it would require the unbundling of the local loop. This was in response to concerns about the low levels of broadband uptake. Regulatory actions such as information disclosure, the separate accounting of Telecom New Zealand business operations, and enhanced Commerce Commission monitoring were announced.[16]
On 9 August 2007, Telecom released the keys to exchanges in Glenfield and Ponsonby in Auckland. In March 2008, Telecom activated ADSL 2+ services from five Auckland exchanges (Glenfield, Browns Bay, Ellerslie, Mt. Albert and Ponsonby), with further plans for the rest of Auckland and other major centres, allowing other ISPs to take advantage.
With the number of copper (DSL) connections falling rapidly in New Zealand as of 2023, a large majority of internet connections are now through fibre as opposed to copper, which is wholesaled by the former Telecom company Chorus, rendering local loop unbundling a minor percentage in DSL connections.
Switzerland is one of the last OECD nations to provide for unbundling. The Swiss Federal Supreme Court held in 2001 that the 1996 Swiss Telecommunications Act did not require it. The government then enacted an ordinance providing for unbundling in 2003 and the Swiss Parliament amended the act in 2006. While infrastructure-based access is now generally available, unbundled fast bitstream access is limited to a period of four years after the entry into force of the act.
Unbundling requests tend to be managed by the courts; however, unlike in the EU, Swiss law does not provide for an ex ante regulation of access conditions by the regulator. Instead, under the Swiss ex post regulation system, each new entrant must first try to reach an individual agreement with Swisscom, the state-owned ILEC.
Hong Kong
Mandatory local loop unbundling policy (termed Type II Interconnection (Traditional Chinese:第二類互連) in Hong Kong[17]) started on 1 July 1995 (the same day of telephone market liberalisation) to give choices to customers.[18] After 10 years, new operators have built their networks, covering a large region of Hong Kong; the government considered it a good time to withdraw mandatory local loop unbundling policy, to persuade operators to build their own networks, and let businesses run themselves with a minimum of government intervention. At the meeting of the Executive Council on 6 July 2004, the government decided that the regulatory intervention under the Type II Interconnection policy, which was applicable to telephone exchanges for individual buildings covered by such exchanges, should be withdrawn, as outlined by conditions documented in a statement by the Telecommunications Authority.[19] After that, the terms of interconnection would be negotiated between telephone operators. Hong Kong is the only advanced economy that has withdrawn the mandatory local loop unbundling policy.[20]
South Africa
On 25 May 2006, the Minister of Communications of South Africa, Ivy Matsepe-Casaburri, established the Local Loop Unbundling Committee (chaired by Professor Tshilidzi Marwala) to recommend the appropriate local loop unbundling models. The Local Loop Unbundling Committee submitted a report to Minister Matsepe-Casaburri on 25 May 2007. The report recommended that:
Models that permit customers to access both voice and data should be offered by many different companies; the models recommended were full unbundling, line sharing, and bitstream access
Customers should exercise carrier pre-selection and thus be able to switch between service providers
An organisation be created to manage the local loop and that this organisation should be under the guidance of the regulatory organizagtion ICASA and that ICASA be capacitated in terms of resources
Service providers approved by ICASA should have access to telephone exchange infrastructure whenever necessary
A regulatory guideline should be established and managed by ICASA to guarantee that strategic issues like the quality of the local loop be optimised for the regulation and delivery of services
Based on this report, the Minister issued policy directives to ICASA to undergo the unbundling process.[21] At the end of March 2010, nothing had occurred; however, a deadline of 1 November 2011 was set by the Minister of Communications for the monopoly holder, Telkom SA, to finalise the unbundling process.[citation needed]
Telecommunications in Pakistan describes the overall environment for the mobile telecommunications, telephone, and Internet markets in Pakistan.
This article covers telecommunications in Sweden.
The telecom sector in Bangladesh is rapidly emerging. Bangladesh Telecommunication Regulatory Commission (BTRC) is the regulatory authority for this sector, overseeing licensing, policy, etc.
A competitive local exchange carrier (CLEC), in the United States and Canada, is a telecommunications provider company competing with other, already established carriers, generally the incumbent local exchange carrier (ILEC).
An incumbent local exchange carrier (ILEC) is a local telephone company which held the regional monopoly on landline service before the market was opened to competitive local exchange carriers, or the corporate successor of such a firm.
Local number portability (LNP) for fixed lines, and full mobile number portability (FMNP) for mobile phone lines, refers to the ability of a "customer of record" of an existing fixed-line or mobile telephone number assigned by a local exchange carrier (LEC) to reassign the number to another carrier, move it to another location, or change the type of service. In most cases, there are limitations to transferability with regards to geography, service area coverage, and technology. Location Portability and Service Portability are not consistently defined or deployed in the telecommunication industry.
A naked DSL, also known as standalone or dry loop DSL, is a digital subscriber line (DSL) without a PSTN service — or the associated dial tone. In other words, only a standalone DSL Internet service is provided on the local loop.
Orcon Limited is a New Zealand telecommunications company. It is New Zealand's fourth largest Internet service provider (ISP). In 2013 it had a 5% share of the fixed line market.
Free S.A.S. is a French telecommunications company, subsidiary of Iliad S.A. that provides voice, video, data, and Internet telecommunications to consumers in France. Its head office is in the 8th arrondissement of Paris and it is the second-largest ISP in France.
Unbundled network elements (UNEs) are a requirement mandated by the United States Telecommunications Act of 1996. They are the parts of the telecommunications network that the incumbent local exchange carriers (ILECs) are required to offer on an unbundled basis. Together, these parts make up a local loop that connects to a digital subscriber line access multiplexer (DSLAM), a voice switch or both. The loop allows non-facilities-based telecommunications providers to deliver service without having to lay network infrastructure such as copper wire, optical fiber, and coaxial cable.
In the telephony business, sub-loop unbundling (SLU) is a type of unbundled access whereby a sub-section of the local loop is unbundled. In practice this often means the competitor placing a small street cabinet with a DSLAM, next to a telco local copper aggregation cabinet or serving area interface and using a "tie cable" to connect to the last part of the local loop into customers' homes. Lyddington in Rutland was the first example of SLU in the UK when local provider Rutland Telecom unbundled the cabinet to offer VDSL broadband.
Neuf Cegetel was a French wireline telecommunications service provider and a mobile virtual network operator (MVNO). It offered various telecommunications services to consumers, enterprises and wholesale customers, ranking second in the country in annual revenues. It was legally established in 2005 following the completion of the merger between Neuf Telecom and Cegetel. As of June 2008, the company became a wholly owned subsidiary of SFR, and the brand disappeared commercially.
Unbundled access is an often practiced form of regulation during liberalization, where new entrants of the market (challengers) are offered access to facilities of the incumbent that are hard to duplicate. Its applications are mostly found in network-oriented industries and often concerns the last mile.
Bit-stream access refers to the situation where a wireline incumbent installs a high-speed access link to the customer's premises and then makes this access link available to third parties, to enable them to provide high-speed services to customers. This type of access does not entail any third-party access to the copper pair in the local loop.
Internet access is widely available in New Zealand, with 94% of New Zealanders having access to the internet as of January 2021. It first became accessible to university students in the country in 1989. As of June 2018, there are 1,867,000 broadband connections, of which 1,524,000 are residential and 361,000 are business or government.
Due to economy of scale property of telecommunication industry, sharing of telecom infrastructure among telecom service providers is becoming the requirement and process of business in the telecom industry where competitors are becoming partners in order to lower their increasing investments. The degree and method of infrastructure sharing can vary in each country depending on regulatory and competitive climate.
Geographic Number Portability Unbundled Line Metallic Path or GLUMP is a product related to Local Loop Unbundling (LLU) in the Republic of Ireland. Geographic Number Portability (GNP) is the process of a user moving their number to a new address. Local Loop Unbundling (LLU) is the process of a line being used by a 3rd party to provide a service on the incumbent's exchange or line. Comreg and eircom, the incumbent telecom company, have named the combination GLUMP.
Hellas Online was one of the leading Greek fixed-line telephony service providers based in Athens. Founded in 1993, Hellas Online (hol) was one of the first Internet service providers in Greece offering public dial-up Internet access. It evolved from an ISP to a fixed-line telecommunications services provider offering a broad range of retail, business and wholesale services. Since 2006 it became a member of the Intracom Holdings group. Before its dissolution, following its merger, with Vodafone in 2014, it had 531,563 LLU subscribers.
Verizon Communications Inc. v. Federal Communications Commission, 535 U.S. 467 (2002), is a United States Supreme Court case in which Verizon Communications argued that the FCC had an unreasonable way for setting rates for leasing network elements. It held that the FCC can require state commissions to set the rates charged by incumbents for leased elements on a forward-looking basis untied to the incumbents' investment and that the FCC can require incumbents to combine elements of their networks at the request of entrants.
USTAv.FCC is the 2004 court case in which the Washington, D.C., Circuit Court of Appeals vacated the Federal Communications Commission's Triennial Review Order (TRO). The court's decision is based on the Telecommunications Act of 1996 section 251 which defines unbundled network elements (UNEs) for incumbent local exchange carriers and competitive local exchange carriers.
↑ "Type II Interconnection to be Withdrawn". Commerce, Industry and Technology Bureau (CITB) (Press release). Office of the Telecommunications Authority, the Government of the Hong Kong Special Administrative Region. 2004-07-06. Archived from the original on 2013-06-27. Retrieved 2008-04-15.
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