Oftel's objective is to ensure that construction of co-location facilities begins in the highest priority exchanges before Easter

Anne Lambert Oftel

Agreement to open up urban exchanges early for competing broadband companies was reached between the UK telecoms incumbent British Telecoms and other firms at a meeting on Thursday.

"Oftel's objective is to ensure that construction of co-location facilities begins in the highest priority exchanges before Easter," Ms Lambert said.

Oftel had summoned industry representatives for an emergency meeting after several companies abandoned their plans to offer high-speed internet access.

At the meeting, all participants reaffirmed their commitment to the process of introducing broadband to the UK people, Oftel said.

Rejection

The meeting was called earlier this week after some communications companies said their roll-out of fast internet access DSL (Digital Subscriber Line) equipment would be much slower than initially planned due to prohibitively high costs.

The Dutch telecoms company Versatel said it had abandoned its plans to offer DSL services in the UK.

Earlier, RSL Communications pulled out, blaming Oftel and the incumbent British Telecom for dragging its feet.

Local loop unbundling

Oftel recently ordered BT to open up 25 exchanges after its competitors had pushed for permission to install their DSL equipment.

The roll-out of local broadband networks is slow

This so-called local loop unbundling aimed to introduce competition on the telephone lines linking BT's local exchanges to homes and businesses.

But when it came to the crunch, only one or two companies put their names forward to roll out broadband links from each exchange.

And only 14 of the exchanges received firm commitments from DSL companies which wanted to install their kit.

Analysts said the DSL operators' reluctance had a lot to do with the 25 exchanges' rural location which meant they would have fewer customers to sell their services to.

This would make it more difficult to make money, the DSL operators said.

BT already had plans to open more exchanges to competitors, but those in cities were expected to be released last.

High costs

DSL operators that wish to install their kit in a BT exchange must pay to convert a room into a "hostel" that will house their broadband equipment.

Under an earlier agreement, the operators had agreed to share the costs and pay about �30,000 each.

But this calculation was based on seven operators sharing each "hostel", rather than just one or two in rural areas.

Thursday's meeting went far to solve this dilemma by agreeing on further work to be done to minimise costs where only a few operators placed orders for co-location space, Oftel said.

In addition, the regulator said it has started an investigation into the costs of co-location space.

Technology gap

The slow and patchy roll-out of high-speed internet facilities has been controversial, not least because rural area customers are so low on the telecoms firms' wish lists.

This creates a technology gap between cities and the countryside, according to organisations representing people who live and work in the countryside.

They say teleworkers and rural firms suffer as a consequence.

"People in rural areas and rural businesses are in danger of being left behind," said John Burns, head of enterprise and regeneration at the Countryside Agency, the UK government's agency set up to promote rural concerns.

It is an issue for all rural activity that need to use data links

Alan Denbigh Telework Association

It is becoming increasingly difficult for rural teleworkers to link into the office systems of the companies they work for, and for small firms in the countryside to transfer data and access modern websites, according to the executive director of the Teleworkers Association, Alan Denbigh.

"It is an issue for all rural activity that need to use data links," he said.

Universal obligation

The problem, according to Mr Denbigh, is that the Universal Service Obligation set down by the UK telecoms regulator Oftel only obliges telecoms companies to offer basic telephone services - not state-of-the-art internet link-ups.

The Countryside Agency has asked Oftel to widen the remits of the Universal Service Obligation to include broadband services.

Oftel has not yet responded, but at Thursday's meeting the regulators said:

"Work is also progressing well on distant location. Orders from operators to connect unbundled loops to equipment installed in nearby locations are being processed separately.

"This work can proceed at a faster rate than preparation of co-location space within BT's buildings."

Such removal of red tape will no doubt be welcomed by DSL operators.

But there are still major issues left to be resolved with regards to the costs of providing rural broadband services.