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					 BT Presentation
 to
 The Japanese LRIC Working Group
 8/12/2000
 Francis Harding
 Manager, International Regulatory Consulting
 BT Regulatory Affairs Division

                                                                                  Page Number : 1
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Agenda
Ø Introduction
Ø Answering your questions:
    Economic Lives and Depreciation methods
     l
  l Non Traffic Sensitive costs
  l Maintenance costs: Underground v
    Overhead
  l Costing the Universal Service Obligation
  l Unbundling the local loop
Ø A final observation


                                                                                  Page Number : 2
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Setting LRIC in the UK
 Top-down
   model
                      Hybrid adjustments     Starting
     ReconciliationÞ
                      made by OFTEL           prices
Bottom-up
  model
          • Future network demand
                                                  RPI-
          • Input price and cost reductions
                                                  8%
          • Cost & asset volume elasticities
          • Improvements in BT’s efficiency

                                                                    Prices at end of
                                                                     price control
                                                                                        Page Number : 3
BT Presentation to MPT/Japanese LRIC Working Group, December 2000         Printed : 01/15/99 , 04:12 PM
           Reconciliation Process
                                                                   Final
  Top Down Model
                                                              Top Down Model



    Reconciliation                   Feedback                         Hybrid
      exercise                       Improvements                   Adjustments



                                                                  Final
 Bottom Up Model
                                                             Bottom Up Model


Ø Not forgetting efficiency studies
                                                                                         Page Number : 4
BT Presentation to MPT/Japanese LRIC Working Group, December 2000          Printed : 01/15/99 , 04:12 PM
    Lives and Depreciation Methods




                                                                                  Page Number : 5
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Depreciation Methods




Notes:          L = Asset life, C = Cost of Capital
Source:         “Study on the preparation of an adaptable bottom-up model,
                 available etc, Europe Economics, April 2000, available from
                http://europa.eu.int/ISPO/infosoc/telecompolicy/en/Study-en.htm

Ø Most commonly methods used in LRIC studies
     l   Annuities and tilted annuities
     l   … and Economic Depreciation Models
                                                                                  Page Number : 6
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Economic Depreciation
 Ø The outputs from economic depreciation
   models are the annualisation profile + the
   economic life
 Ø Economic depreciation is
    l “the price at which the operator is indifferent
      between retaining the asset and purchasing a
      new modern equivalent asset”
    l “the change in Economic Value in one year”
 Ø Economic value =
        discounted present value of expected revenues
                               less
        discounted present value of future running costs
                                                                                  Page Number : 7
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Calculating economic depreciation
Ø Can be calculated by setting the NPV for the
  asset over its lifetime to be zero
Ø A process is defined in NERA report for ACCC,
  “Estimating the LRIC of PSTN access” (1/1999)
Ø For each asset it requires inputs on
   l Trend in asset prices (of MEAs)
   l Initial level & future profile of running costs
   l Forecast profile of output/utilisation
   l Cost of capital
Ø Iterative calculation involving declining
  annuity formulae
                                                                                  Page Number : 8
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Depreciation methods applied
Ø BT’s statutory and regulatory accounts adopt a
  policy of straight-line depreciation
   l CCA accounts reflect price movements
     through holding losses and gains
   l Top-down LRIC sues similar methods
Ø UK bottom-up LRIC model applied economic
  depreciation models
Ø Ireland bottom-up model uses tilted annuity
Ø In Australia
   l NERA used sum of digits
   l ACCC used tilted annuity
                                                                                  Page Number : 9
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Setting lives in BT
Ø BT reviews asset lives annually
Ø The process considers lives from 4 viewpoints
     The physical/technical life
     l
   l The strategic/planned life
   l The commercial life
   l Financial perspectives
Ø There is no “explicit” formula/method
   l A “soft” approach that mimics economic
     depreciation?
Ø BT publishes little information about its lives

                                                                                Page Number : 10
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Lives across the world




  Source: BT response to Telecommunications Council, 30/11/99
                                                                                Page Number : 11
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           New data on lives
Ø New sources now available, e.g.
     l ACCC (7/1999): “A report on the assessment
       of Telstra's undertaking for the Domestic
       PSTN originating and terminating Access
       Services” (http://www.accc.gov.au/telco/fs-
       telecom.htm)
     l Europe Economics, April 2000 study for EU
        Ølives and unit costs and other bottom-up
          model assumptions



                                                                                Page Number : 12
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Some new data on lives




                                                                                Page Number : 13
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Lives of Duct and Cable
Ø The BT life for copper cable is “about 15 years”
Ø The BT life for Duct is 25 years
     l   But this is affected by the large amount of local
         infrastructure competition in the UK




                                                                                Page Number : 14
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Lives & depreciation: Conclusions
Ø The factors that affect an economic approach
  to setting lives suggest lives should be fairly
  consistent across the world
Ø The MPT and study group may wish to
  consider an economic approach to setting
  lives for the bottom-up LRIC model
Ø Some of the lives used previously appeared
  short by international standards
Ø International consensus is that the life for
   l Optical Fibre is 20-24 years (v 11.2)
   l Transmission equipment is 10 years (v 6)
                                                                                Page Number : 15
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
    Overhead v Underground




                                                                                Page Number : 16
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           UK Local Loop LRIC models
Ø UK bottom-up model for access networks
  never populated
Ø BT’s top-down model used as basis for ULL
  pricing
   l This model applies cost/volume relationship
     to current, re-valued asset base
   l No economic comparison made between
     overhead and underground
Ø BUT Oftel have undertaken regular studies of
  BT’s relative efficiency
   l Latest view is BT 1½-4% off the frontier
                                                                                Page Number : 17
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Underground v Overhead costs
Ø What data is required?
    Cost/kilometre?
     l
  l Cost/kilometre pair?
  l How is drop-wire maintenance treated?
Ø Cost differences will arise due to
  l Differences in Fault rates
  l Differences in Cost per fault




Ø UK data suggests fixing an underground fault
   costs 23% > fixing an overhead fault
                                                                                Page Number : 18
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
    Non-traffic sensitive (NTS) costs




                                                                                Page Number : 19
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Overview of UK Switching costs
                         OLO        Processor          Tandem
                                                                    Tandem
                        Facing                          facing
                                     LS facing                      Switch
                         ports                           ports
                                       ports
    OLO
   network                       Tandem
                         OLO                                        Local
                               facing ports
                        Facing              Processor
                         ports
                                 Access                             Switch
                               facing ports


CONVEYANCE                 Processor LS facing ports
                                                                    Concentrator
                                Common Costs
ACCESS                         Line Driven Costs
                                                                      Source: Oftel 3/97,
                      %             %            %            %       “LRIC: the Bottom-
                                                                      up Model”, Fig 2.1

                                                                                     Page Number : 20
BT Presentation to MPT/Japanese LRIC Working Group, December 2000        Printed : 01/15/99 , 04:12 PM
           2 types of concentrators in UK


  Calls
  sensitive

                              Local                    Local
                                 X                         X



                                                               RCU

                RCU
                                                                      %
                                          Lines
   %                                      sensitive

Separate sub-models for processor & concentrator
                                                                                 Page Number : 21
BT Presentation to MPT/Japanese LRIC Working Group, December 2000    Printed : 01/15/99 , 04:12 PM
           Inside the concentrator
                                                           Line Cards


                                                                    Main
                                                                    Distribution
                                                                    Frames




             Traffic
                             Non Traffic
            Sensitiv
                             Sensitive
                   e
                                                                                          Page Number : 22
BT Presentation to MPT/Japanese LRIC Working Group, December 2000             Printed : 01/15/99 , 04:12 PM
           Model detail - Cost Allocation
  eg. System X concentrator




                                                                                Page Number : 23
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           NTS Costs in Europe
Ø BT’s published accounting documents explain
  how it splits costs NTS/TS
   l Line cards are part of NTS business
   l This follows the principle of cost causality
Ø The same approach has been recommended
  by the EU in EU published guidelines
Ø The same approach has been adopted in other
  non-European countries
   l Hong Kong
   l Australia
   l Switzerland, etc etc
                                                                                Page Number : 24
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           NTS Costs conclusion
Ø The way the Japanese LRIC model treats local
    exchange/concentrator costs needs review
     l The current model seems to treat all local
       exchange costs as traffic sensitive
     l This goes against current international
       costing conventions




                                                                                Page Number : 25
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
    Universal Service Cost Calculations




                                                                                Page Number : 26
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Universal Service Topics
Ø The scope of universal service and its cost in
  the UK
Ø Overview of the UK (and European) approach
  to Universal Service costing
Ø Overview on calculation of benefits from being
  the USO holder




                                                                                Page Number : 27
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           The scope of the USO in the UK
Ø Connection to fixed network for voice, low
  speed data & fax transmission
Ø Service options must include
   l A low cost, restricted service package
   l An outgoing calls barred service &
     repayment plan instead of disconnection
   l Ability to receive itemised bills and choose
     selective call barring
Ø Access to payphones at affordable prices
Ø Access to emergency services, operator
  assistance & directory information
Ø Geographically averaged prices
                                                                                Page Number : 28
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Observations on scope of UK USO
Ø Reviewed periodically by Oftel
     Latest consultation paper in September 2000
     l
Ø UK obligations are consistent with, but more
  onerous than those in the EU framework
Ø The need to include higher bandwidth services
  will be reviewed in future
   l Not considered the right time to extend to
     broadband yet




                                                                                Page Number : 29
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           UK & European USO cost elements
Ø There are four elements for the net cost
  calculation:
   l Uneconomic Areas
   l Uneconomic Customers
   l Uneconomic Payphones
   l Uneconomic Services
Ø But the calculations are difficult ...
   l Its worse than LRIC!
Ø In Japan the costs of uneconomic customers
  are likely to be small

                                                                                Page Number : 30
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           The Costs of the USO
Ø Current UK USO costs & benefits of USO are




     Modelling undertaken by Analysys for Oftel
     l
Ø The only EU country with a USO fund is France
   l … and that is currently under review by EU
                                                                                Page Number : 31
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Cost Calculation Principles
 Ø The cost of the USO is the difference between
   the USP’s financial performance with the USO
   and without the USO
 Ø Based on the “costs avoided” & the “revenues
   foregone”
                                            Revenue
                                 Costs      Foregone
  Yen                           Avoided
                                                                      USO cost
                                                         Financial
                Financial                               Performance
               Performance                                without
                   with                                     USO
                   USO

                                                                                   Page Number : 32
BT Presentation to MPT/Japanese LRIC Working Group, December 2000      Printed : 01/15/99 , 04:12 PM
           Services within UK Model
Ø BT PLC currently holds the USO in the UK
Ø The services considered included
     Residential and business lines
     l
      ØConnection and rental revenues
   l Local, long distance & international calls
   l Calls to mobile operators’ customers
   l Interconnection revenues
   l Public payphones (separately)
Ø Revenues and avoidable costs were required
  for each of these services
   l by area
   l by customer (grouping)
                                                                                Page Number : 33
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Revenues Foregone
Ø Include outgoing and incoming calls
    Because the loss of an area/customer Ü
     l
    calls lost to (and from) that area/customer
  l The incoming/outgoing call ratio is a critical
    assumption for uneconomic customers
Ø Some double-counting issues
     45 calls       45 calls   45 calls       45 calls                Total Calls
       out             in        out             in
                                                         Customer A      100
                A                         B              Customer B      100
                        10 calls                         Customer A+B    190

Ø It is usual to offset some of the revenue loss
    by a small amount of substituted traffic
                                                                                      Page Number : 34
BT Presentation to MPT/Japanese LRIC Working Group, December 2000         Printed : 01/15/99 , 04:12 PM
           Costs covered in the UK USO model
Ø All EFFICIENT long run avoidable costs were
  considered
   l Network component costs
      ØOperating costs, including depreciation
   l Costs for retail activities
      ØE.g. Marketing and sales, billing
   l Cost of capital employed
Ø But different cost estimates were required
   l Incremental service unit costs more
     appropriate for costs of uneconomic areas
   l Marginal service unit costs more appropriate
     for costs of uneconomic customers
                                                                                Page Number : 35
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           The basic UK USO costing formula
+ Incremental costs of serving uneconomic
    customers and uneconomic areas
-   The revenues foregone if these uneconomic
    customers and areas were no longer served
+   Plus the substitution revenues from calls made
    by these customers using other means
-   The costs of these substitution revenues
-   The benefits of being the USO provider




                                                                                Page Number : 36
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           The UK USO calculation structure

                Determine                                              Iterate to
                                    Calculate loss due to
               unprofitable                                         remove double
                                     unprofitable areas
Volume,           areas                                                counting
revenue
 & cost
  data          Determine          Calculate loss due to               Iterate to
               unprofitable      unprofitable customers in          remove double
                customers            profitable areas                  counting

                           Calculate costs
                                                                     Sum of total
                           of unprofitable
                                                                        loss
                             payphones


                               Calculate                            Total net cost
                               Benefits                                of USO

                                                                                       Page Number : 37
BT Presentation to MPT/Japanese LRIC Working Group, December 2000          Printed : 01/15/99 , 04:12 PM
            The costs of uneconomic customers
  Revenues                                       Costs




                  Customers                                     Customers



  Profits                  Uneconomic          Ø Distributions required
                           Customers                not averages
                                                    l
                                               Ø The distribution tails
                                                 determine the net costs
                                               Ø Calculations are sensitive to
                                                 small changes in
                                                 assumptions
                                                                                        Page Number : 38
BT Presentation to MPT/Japanese LRIC Working Group, December 2000           Printed : 01/15/99 , 04:12 PM
           The cost of public payphones

                                        Revenue per Payphone
                                        Low                         High

                                 Low
             Cost per payphone




                                        Unprofitable
                                        payphones
                                 High



Ø Costs & revenue distributions may vary by geographic
    area
                                                                                       Page Number : 39
BT Presentation to MPT/Japanese LRIC Working Group, December 2000          Printed : 01/15/99 , 04:12 PM
    USO benefits




                                                                                Page Number : 40
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           USO Benefit Categories


Features

          Lifecycle             Ubiquity               Brand        Payphones




Benefits                  Customer                          Advertising
                           Loyalty


                                                                                  Page Number : 41
BT Presentation to MPT/Japanese LRIC Working Group, December 2000     Printed : 01/15/99 , 04:12 PM
           Lifecycle Benefits
Ø Serving a customer when uneconomic
  increases loyalty when economic
Ø When non-economic areas become economic,
  they display higher loyalty
Ø Provision of advanced services to schools will
  reinforce this benefit
Ø Can be estimated through modelling and
  surveys




                                                                                Page Number : 42
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Ubiquity Benefits
Ø Customers choose USP because of USO
     Strengthens marketing message as available
     l
     everywhere
Ø Assumes loyalty of customers moving to
  economic areas affected by USO
   l All customers - not just previously
     uneconomic
Ø Can be estimated through modelling and
  survey



                                                                                Page Number : 43
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Brand/Reputation Benefits
Ø USO will give USP a community service image
Ø Brand strengthened and linked to national
  identity
Ø If USO requirements for schools and hospitals
  will reinforce this benefit
Ø Benefits realised in improved customer loyalty
  through more effective marketing campaigns
Ø Benefits can be estimated
   l In absence of USO, what spend is necessary
     to create same brand image ?

                                                                                Page Number : 44
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Payphone benefits
Ø Payphones provide advertising and profile for
  USP
Ø Displays company logo enhancing corporate
  reputation
Ø Space in payphones available for advertising
   l Possible value for selling to 3rd parties
Ø Can be measured with reference to marketing
  opportunities and payphone locations




                                                                                Page Number : 45
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Other Potential Benefits
Ø Buyer power/bulk discounts
Ø USO customers buying non-USO services
Ø Network effects
Ø Advertising from Directories
Ø Marketing benefit from access to full range of
    telephone data




                                                                                Page Number : 46
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Benefits Summary
Ø Benefits do exist
     But are not easy to define and quantify from
     l
     accounting records
Ø Four features of USO deliver loyalty and
  marketing benefits
   l Lifecycle, Ubiquity, Brand and Payphones
Ø All can be estimated through modelling and
  surveys




                                                                                Page Number : 47
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
    Unbundling issues in Europe




                                                                                Page Number : 48
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Background to EU LLU Legislation
Ø The focus is on “metallic pairs”, i.e. Copper
     Does not apply to Fibre or Coaxial cable
     l
   l Fibre to big businesses may be competitive
   l Key target markets are small/medium
     enterprises and consumers
Ø LLU Directive is a short-term measure, to ensure
  “implementation” by 1/1/2001
Ø LLU will eventually be included in the expected
  “Access and Interconnect” directive (due 2002)
   l The scope of LLU may change in the final A&I
   l It could be broadened to include Fibre
                                                                                Page Number : 49
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Requirements of EU Directive
 Ø Three types of LLU mandated :
      Full LLU (at MDF site)
      l
    l Shared LLU (at MDF site)
    l Sub-loop unbundling (between MDF & customer)
 Ø Clear indications on
    l Cost-orientation obligation
    l Non-discriminatory service
    l The scope & contents of the LLU Offer
 Ø Existing directives also oblige SMP operators
   to offer equivalent wholesale services to others
    Ü “Bitstream” access will also be required

                                                                                Page Number : 50
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
            Illustration of Shared vs Full LLU
Full LLU (additional line)
           NTE/DSL Modem
                                    M        Data Path     Co-location space               OLO
                                                                                          network
             NTE                    D                        OLO equipment
                                              Voice Path
                                    F                                                    Incumbn
                                                           Incumbent equip
                                                                                          etwork

 Note: full LLU could also involve transfer of single customer line: OLO could offer data and voice

Shared Service
             NTE/DSL
             Modem
                                    M            Data      Co-location space               OLO
                                                 Path                                     network
                                    D                        OLO equipment

                                    F         Voice                                      Incumbn
                                              Path         Incumbent equip                etwork
            NTE
                            Splitter
                                                                                                  Page Number : 51
BT Presentation to MPT/Japanese LRIC Working Group, December 2000                     Printed : 01/15/99 , 04:12 PM
           Sub-loop Unbundling
                                                     OLO
                                                    Network
           NTE/DSL Modem
                          E         E         E
                         DP       Cab         CP           M
                NTE                                        D
                                                           F
                                                                      Voice Path


  DP    Distribution Point
                                               OLO would need to install its own
 Cab Street Cabinet                       E    equipment (e.g. ADSL / VDSL) at the
                                               access points
        Primary (secondary)
  CP
        connection point

                                                                                    Page Number : 52
BT Presentation to MPT/Japanese LRIC Working Group, December 2000       Printed : 01/15/99 , 04:12 PM
           UK Response
Ø OFTEL had identified two forms of LLU
     l Full LLU
        ØBT obliged to offer on cost-plus basis
     l “Bitstream” access
        ØProvision of IP traffic to another
         operator’s network
        ØWholesale offering to match BT’s Retail
         offering
        ØPrice based on “Retail-minus”



                                                                                Page Number : 53
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Likely structure of UK LLU charges
           NTE/DSL Modem
                                 M     Tie cable                          OLO
                                                    Co-location space    network
                                 D
                                 F                   OLO equipment




 Metallic Path Facility (MPF)
 Ø Connection Charges                              Internal Tie Cable
 Ø Annual Rental Charges                           Ø Connection Charges
                                                   Ø Annual Rental Charges

         Co-location charges                             Ancillary Charges, e.g.
         Ø Set-up                                        Ø Co-location power
         Ø License fee (rental)                          Ø Co-location escort
                                                         Ø MPF fault report
                                                         Ø MPT repair

                                                                                     Page Number : 54
BT Presentation to MPT/Japanese LRIC Working Group, December 2000        Printed : 01/15/99 , 04:12 PM
           LLU Pricing Issues
Ø How to recover costs?
    Rentals coverage versus connections?
     l
  l Expensed versus capitalised?
      Øe.g. Final drop wire in UK
  l Forecasts required?
      ØSome items may be more appropriate to
       recover “over a reasonable time”
         le.g. LLU system costs
Ø Different treatments for
  l Transferred v Spare v New lines?

                                                                                Page Number : 55
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Other Observations
Ø “Dark fibre” or “dry copper” not mandated
     Leased services are offered (Private circuits,
     l
     interconnect links) - i.e. agreed product
     spec. and standard data rate interface
   l Parties can agree deals for dark fibre
Ø Future UK (and EU) developments may include
   l “Terminating” and “Trunk” segments
   l Price control of Terminating segments




                                                                                Page Number : 56
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM
           Fixed Termination Benchmarks




                                                                                Page Number : 57
BT Presentation to MPT/Japanese LRIC Working Group, December 2000   Printed : 01/15/99 , 04:12 PM

				
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