ADSL is cheap, and it’s getting cheaper. There’s a reason for this: it’s called local loop unbundling.

Behind that rather cryptic name lie all sorts of laws and controversies. Put simply, local loop unbundling is a consequence of the dismantling of national telephone monopolies, such as Britain’s BT and America’s AT&T, forcing the owners of the wires and exchanges to allow equal, fair access to their competitors for a set price.

Previously, ADSL providers had to pay the local monopoly telecoms provider to activate and use an ADSL line. Local loop unbundling means that the independent companies can now get access to the telephone exchange to install their own equipment, avoiding having to buy and resell the monopoly’s services.

The advantages of this are easy to see. Countries with local loop unbundling have seen an explosion in broadband take-up rates, as the new companies often not only sell Internet access for a lower monthly fee but also have much lower connection fees.

Local loop unbundling has led to an explosion of investment in equipment and, at the same time, fierce competition and steep price cuts to customers in areas where the equipment has been installed, with some ISPs even starting to offer free ADSL in some areas to people who sign up for their telephone services. Even at low prices, the companies only need a few hundred customers per exchange to break even, and they can easily choose to only install their equipment in heavily-populated areas if they want to.

So how do you tell if you can get this cheap ADSL in your area? Unfortunately, it’s a matter of shopping around and entering your postal code into each ISP’s website – because each ISP has to install its own equipment into the exchange, the extent of their coverage is very variable.