The telecoms industry regulator, Oftel, yesterday stepped up pressure on BT to open its networks to rivals by ordering it to connect Energis and Thus to its wires so they can provide high-speed internet services.

The move is seen as a means of overcoming the impasse in opening BT's local exchanges -"unbundling the local loop" - to rival operators planning to offer broadband services via digital subscriber lines (DSL).

Oftel's proposal is for BT's rivals to bypass the local loop and provide DSL services direct. It could enable Energis and Thus to connect business subscribers to DSL services much earlier than by using local loop. Other operators are expected to follow suit.

Richard Sweet, Thus's regulatory manager, said it could take until 2002 for BT's competitors to offer high-speed internet services via the loop, while they could gain access to the copper wires as early as next spring under yesterday's Oftel proposal.

The first of BT's local exchanges are due to be open to rivals from July next year.

Thus, majority owned by ScottishPower, and Energis had complained to the regulator in the autumn after failing to conclude a deal with BT to buy wholesale DSL services, enabling them to convert copper wires into internet connections. Oftel sided with them, as it had over complaints about unbundling the local loop.

In its draft proposal Oftel set a deadline for BT to conclude interconnection agreements with its two rivals for DSL services. These agreements would enable them to take their DSL services off BT's network at specified points and on to their own networks.

With a month set for consultations and a further month for negotiations,Thus and Energis expect a deal to be struck by the end of February with, connections possibly available in early May.

Still viewed within the City as being too lenient towards BT, David Edmonds, Oftel's director general, said: "I want operators to have a range of options for providing services, including using BT's services, unbundled local loops or using their own and BT's network."

Thus has begun using BT's wholesale product, IPStream, to offer high-speed services to its Demon customers but the new arrangement, Mr Sweet said, would enable it to carry the traffic back across its own network rather than relying on BT's.

"There are potential benefits provided we can negotiate a sensible price," he said.

It should enable Thus to guarantee a level of service quality not now available. "We would very much want to offer a business such services but they naturally want it available 98% of the time and we can't do that. This will improve matters even though it won't overcome the service level issue entirely."

Mr Sweet said around half the UK's population were within reach of high-speed services but levels of access depend on the length of copper wire and its quality.

Oftel said its proposal applied only to Energis and Thus but Mr Sweet insisted it would benefit the whole industry.2929