AOL is investing millions in local-loop unbundling (LLU), a move designed to help it compete in a higher speed, service-orientated broadband market. The company will be spending £50m on the first phase of its LLU programme, which will allow AOL to take direct control of a customer's telephone line and sell their own services.

The investment will be made in 'Local Loop Unbundling' (LLU), which is the process that allows telecoms and Internet companies to replace BT as the provider of services over the telephone line from the local exchange to the phone socket in the home, known as the 'local loop'. This will enable AOL to deliver Internet, telephony and other broadband related services, such as Video on demand, television over broadband and advanced gaming services, directly to these consumers.