Friday, 16 March 2012

LLU does not increase broadband penetration

New just in: research from Imperial College has found Local Loop Unbundling does not increase broadband penetration in residential areas.

Broadband penetration in residential areas may not be increased by Local Loop Unbundling (LLU), according to research carried out by Imperial College in London on behalf of British regulatory body Ofcom.

LLU is the process whereby the incumbent operators in an area, such as BT and Kingston in the UK, make their network available to other companies, which then install their own equipment in the local telephone exchange.

A report by ComputerWorld claimed that it was introduced to encourage competition in the broadband market and prevent it being monopolised by any one provider, something which it was hoped would increase both the quality of service being provided and the extent to which high-speed internet access would penetrate residential areas of Britain.

However, research being carried out on behalf of Ofcom by Professor Tommaso Valletti, using the regulator's datasets, has revealed that LLU appears to decrease broadband penetration.

He suggests that this overall demographic shift may be down to the increase in computer literacy seen across the UK over the last decade, rather than being linked to the use of LLU in increasing broadband access.

The professor explained that in areas with an LLU network broadband penetration was two per cent less overall, something which he suggested could be due to broadband providers withdrawing cheaper services and installing higher-quality ones because of the flexibility offered by the new infrastructure.

He said: "They withdraw the cheap packages, because otherwise they would cannibalise the more expensive offers, and so you have both quality and price going up. This seems to result in less take up of those services

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