LLU stands for local loop unbundling and applies to ADSL (BT line) internet connections. A 'local loop' is another term for the actual cable through which you receive your broadband and telephone calls.
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 a process which allows other ISPs to provide a broadband connection using their own software on BT's infrastructure.
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 also how you can receive ADSL broadband from Plusnet, for example, while your next door neighbour has a contract with TalkTalk.
Since the process began, hundreds of thousands of local loops have been unbundled from BT, freeing them up for use by major ISPs. Even though the provider rents the infrastructure from BT, the consumer will still have to pay a monthly line rental to BT, though.
Benefits of unbundling
TalkTalk, Plusnet 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 Plusnet aren't just rebranding what's available from BT, they can design their own broadband to suit their customers. This often results in faster and cheaper deals and more competition — which greatly benefits consumers.
Compare broadband packages from the top providers on uSwitch broadband.