BT staff should get bonuses for freeing-up lines, says regulator

BT Group should pay its staff commission to speed up the number of telephone lines it hands over to rivals that want to offer alternative telecoms services, industry regulators say.

BT Group should pay its staff commission to speed up the number of telephone lines it hands over to rivals that want to offer alternative telecoms services, industry regulators say.

Peter Black, the telecommunications adjudicator appointed by Ofcom, has told the industry that he would welcome a move by BT to "incentivise" its staff, particularly in the controversial area of "local loop unbundling" (LLU). This process is seen by the regulator as central to expanding broadband internet take-up, a key government objective.

LLU has been a constant source of friction between BT, which controls the UK's telecoms infrastructure, and its competitors. It requires BT to give rivals access to its telephone exchanges so they can install equipment that gives them control of the so-called final mile, or loop, of copper wire that runs from exchanges into homes.

Yesterday, Ofcom set BT a tough target of 1 million unbundled local loops by the end of 2005. In the past four years, 16,000 have been set up.

It also announced an investigation into how BT prices parts of its unbundling process, as well as confirming price cuts of up to 76 per cent in other areas of the LLU process.

Mr Black has let it be known that he favours BT paying staff bonuses to help make sure the LLU targets are met. The regulator refused to comment yesterday on specific measures discussed with BT. "There is evidence that BT's commitment has been transmitted from its top management to those charged with delivering effective, scaled provisioning of local loops," Ofcom said in a statement.

A spokesman for BT also refused to reveal details of meetings with Mr Black, but said: "As in any organisation, people are set targets and obligations and measured against them. We try to strike a balance between steady remuneration and performance-based pay."

As expected, Ofcom said BT must reduce its charges for LLU by between 68 and 76 per cent where rival operators continue to share a local loop with BT. Where a rival takes control of a line completely - eliminating BT from a customer's home - access charges must be cut 27 to 42 per cent. Ofcom has yet to decide on a new rental charge for the local loop in these cases. It is investigating costs and will report back in November. Rival telecoms operators hope the reduction in this rental charge will be significant.

Stephen Carter, Ofcom's chief executive, said: "Collectively this new pricing structure, the industry participation in the adjudicator scheme and BT's fresh approach have the potential to add up to a faster broadband roll-out for Britain."