Consumers suffering from fixed-line 'monopoly'

BT and Oftel come in for a roasting from government

A report from the Public Accounts Committee published today has slammed BT and former regulator Oftel, saying the 'quasi-monopoly' of the telco is bad news for the fixed-line market – and especially for consumers.

Despite Oftel's attempts to open up the fixed-line domain, BT still has 75 per cent of the market. The PAC thinks that more consumers should be switching to other suppliers to save themselves money and it's down to the telecoms watchdog Ofcom to tell them how.

The recent advertising blitz between BT and competitors, each pushing various packages and discounts, has left consumers bemused and unable to find out which tariff works best for them, the report, The Office of Telecommunications - Helping Consumers Benefit from Competition in the Telecommunications Market, concludes. "Whether consumers can make informed choices depends on whether they can make meaningful comparisons between companies," it says.

Confusing phone bills don’t help either, the PAC said, meaning that consumers don't have the right information to hand to allow them to choose the phone company that best suits their needs. It also levels blame at Oftel, saying the former regulator was "remote" from consumers and didn't offer enough guidance.

"Its guidance did not give practical examples of how consumers might make choices and its external publicity budget in 2002-03 of £45,000 was only 0.2 per cent of its overall budget of £19.5m. It nevertheless told us that if consumers continued not to switch to the most beneficial options, it would have to question human nature in the face of overwhelming information," the report says.

It also concludes that the pressure is now on Ofcom to do a better job and that it should be actively encouraging consumers to switch supplier.

Unsurprisingly, BT is less than impressed and a statement from the telco says that it "utterly refutes" the idea the regulator should encourage a switch: "[Ofcom's] key role is to ensure that consumers have a wide choice of supplier and that there are no barriers to entry. This situation already exists in the UK."

BT also dodges blame on the question of a confusing marketplace, accusing competitors of muddying the waters: "Consumers can be confused by some of our competitors comparing their 'best' prices with our "standard" ones - rather than our most popular packages - but BT is not to blame for this."

It's not all bad news for the telco, however. The PAC believes that the company's Light User scheme could be a good option for many people currently not taking advantage of the tariff to cut their bills and is pushing for an Ofcom study into why more eligible consumers haven't signed up.