What is local loop unbundling?

When researching broadband internet service providers (ISPs) you might have come across something called LLU or LLU pricing and often it’s this kind of jargon which puts the consumer off. But, like most jargon, in reality it’s just a complicated name for something which is actually quite simple.

• LLU stands for "Local Loop Unbundling". "Local loop" is another term for the actual cable through which you receive your broadband, and telephone calls, based on the standard ADSL connection.

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• The vast majority of local loops are owned by BT, the UK’s major telephone exchange. This is where the "unbundling" comes in; the term refers to the process which allows ISPs other than BT to use the local loops to provide you with your broadband connection.

• In most cases it is just the broadband element of the connection which is unbundled which is why you can receive broadband from one ISP while retaining a BT line for making telephone calls.

• This is how you can receive ADSL broadband from Plusnet, for example, while your next door neighbour has a contract with AOL. Basically it involves ISPs renting the telephone lines from BT. It is this financial agreement between the ISPs and BT that means that additional costs may be incurred, which in turn might be transferred on to you.

• Since the process began, hundreds of thousands of local loops have been unbundled from BT, freeing them up for use by major ISPs.

The benefits of unbundling

• TalkTalk, Be and other suppliers can install their own particular brand or style of broadband, with differing speeds and download limits to those offered by BT. For example, because TalkTalk and Be are not just re-branding what is available from BT, they can design their own broadband to suit their customers meaning potentially faster and possibly cheaper deals for consumers.

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