Oftel keeps the door open for smaller operators

Regulation centres on the mundane question of space allocation in BT exchanges. Larger operators were asking six racks worth of space, the smaller ones for three, to set up ADSL links on the last line of the local loop - Oftel opted for three racks as standard.

Mark Ballett, CEO of UK business services start-up OnCue, said: "From the first of December, Oftel will be allocating the more attractive exchanges - the ones near business in the city centres.

"With allocations in three racks it will mean that smaller, newer entrants can compete on an equal footing," he added. "And under the 'use it or lose it' policy announced last Thursday, companies won't be able to hoard space to slow down competitors."

Even with the new allocation, BT will probably have around 800 telephone exchanges with ADSL up and running by the end of July when it has promised to open up 600 exchanges to competitors.

It has, however, said that it will allow cabling to any exchange where the operator does not want co-location. To be able to access the local loop, they have only to set up their own exchange nearby and run cable to BT's site.

The Oftel allocation will decide the order in which BT prepares exchanges for other operators and how space will be divided if there isn't enough. Last week, the regulator established a procedure for disputes over space.

Oftel is due to pronounce on charges that BT may make to other operators for space before the end of December.