Internet service Providers (ISPs) have given a cautious welcome to Ofcom's announcement of price cuts to encourage take up of Local Loop Unbundling (LLU).

This means most consumers are initially unlikely to see much change in the price of broadband even though Ofcom has slashed the price BT can charge competitors for using its local exchanges.

LLU is where other telecoms providers and ISPs put their own equipment in BT's local exchanges to provide internet and voice services to their customers. LLU is already commonplace in many European countries and seen as a means of bringing higher internet speeds and lower priced services.

BT's competitors have long called for the telecoms giant to reduce the prices it charges saying they harm competition and kept broadband prices high.One of the major stumbling blocks to implementing LLU has been the cost of transferring a customer from BT lines to a rival's.

Ofcom has now cut this transfer cost by 60 per cent. The rate for a new customer is to fall by 36 per cent.

But this price cut only applies to full LLU where the operator has installed, owns and controls the lines right through to the customers' homes. This requires a massive investment in equipment and laying lines, so many ISPs are likely to turn to shared LLU. This is a compromise where they do put in equipment in the exchanges but continue to use BT's copper lines to people's homes.

But although most ISPs have welcomed the price cuts, they have reservations and said that the processes for transferring people to shared LLU are not robust enough yet. In a statement ISP Wanadoo said without these, the introduction of competition and new products to the Broadband market will be delayed or frustrated.

ISP Tiscali echoed this view.

"LLU is a significant investment for ISPs so switching a customer to LLU has to be a seamless process so there is no disruptive loss of service. But the processes to do this are not in place and haven't even been defined yet. Customers would not be happy if they lost services for days, possibly weeks.

"While we do plan to LLU, at the moment for Tiscali it is a case of watch this space," a company representative said.