NGN debate ‘weakens case for unbundling loop’

19 Apr 2007

Senior figures in the Irish telecoms industry have told they believe investment in local loop unbundling (LLU) by alternative operators has been paralysed due to uncertainty over the safety of their investment down the line.

Last month Eircom revealed that it was investing €60m in putting fibre into its network backbone, paving the way for its next-generation network. In a process known as sub-loop unbundling, Eircom will put fibre into cabinets nearer the home as opposed to unbundling the local loop.

Eircom has said that it is going to begin with key competitive locations such as Dublin where platform competitor UPC is investing significantly in its cable broadband-based NGN.

Operators who have invested heavily in local loop unbundling such as BT, Magnet and Smart fear that after millions of euros of investment in unbundling local loops by putting their equipment into local exchanges they may be left with stranded assets.

The question as to whether Eircom will upkeep the maintenance of local exchanges where its NGN is deployed or compensate alternative operators for their lost investments has yet to be answered.

At the time of Eircom’s announcement BT said it was considering legal action and a spokesperson for the company confirmed to the company is still considering its options about going to court.

“If I was about to invest in LLU and read about what Eircom was about to do I would stop,” a senior telecoms industry figure told “This has delivered an objective for Eircom without Eircom having done anything.

“Just as LLU was about to get going it has fatally weakened the case for it,” he said.

“We’re deeply concerned about the whole notion of an NGN network,” said Vern Kennedy of Magnet Networks, whose company has unbundled 40 exchanges around the country.

“We don’t wish to stand in the way of any company bringing facilities to the marketplace; if anything we wish there were more companies doing that. We’re in favour of it but we are opposed to a monopoly provider changing the rules in the middle of the game.

“It seems Eircom are obviating their legal requirements by providing a new network and saying they won’t support LLU. What we would like to see happen is the incumbent has a legal responsibility to maintain the existing infrastructure for its entire economic life, which could be the next 10 or 20 years. That was done in the US and in Europe by companies like Verizon and AT&T,” Kennedy said.

By John Kennedy