BT and government go head to head over Net access

BT has told the government to back off over the unbundling of the local loop as the Chancellor weighs into the Net access row

British Telecom (quote: BT) issued a warning to the government on Wednesday, telling Chancellor Gordon Brown that he "should not get involved in telecoms".

BT's criticism of government interference follows a damning speech made by Brown on Wednesday evening about the state of the UK Internet market. In his speech, the Chancellor expressed concerns that BT's dominant position was putting British businesses at a disadvantage.

Brown committed to halving Internet access charges by 2002, and called for the timetable for local loop unbundling -- in which BT opens up its network to other operators -- to be speeded up.

The telco was quick to condemn the government for what it deems interfering. "It is not for the Treasury to get involved in telecoms," a BT spokesman said. "His [Gordon Brown's] comments have had a huge impact on our share price, and that affects people in the street and little old ladies." But Brown isn't alone in his views of BT, which has faced fierce industry criticism about its flagship Internet service Surftime. The service, which promises unmetered access across the UK, will be running this coming April.

In fact, BT seems to be alone in the view that it is moving toward unmetered access at an appropriate rate. Long time campaigners for unmetered Internet access, CUT (Campaign for Unmetered Telecommunications), is delighted that the government is finally taking a hard line on BT. "We always believed Internet access costs was a subject that demanded attention from the highest level," a CUT spokesman said. He believes it is incumbent on the government to speak out. "The Chancellor has every right to be talking about it, as it affects the whole economy. This is a much wider issue than BT's share price, and the millions wiped off BT shares yesterday is nothing compared to what BT itself is wiping off the e-economy of Britain."

While most ISPs welcomed Mr Brown's comments, Paul Myers, managing director of X-Stream, thinks the government is behind the times. He has his own message and question for the Chancellor. "Welcome to the '90s Mr Brown! You have promised no foot-dragging concerning slashing the cost of Internet access in the UK by 50 percent. Whoopee! You call a deadline of July 2001 'no foot-dragging?'"

While BT appears to be playing down demands for quicker unbundling, it seems ready to start a fresh row with Oftel over Surftime. BT blamed regulatory red tape for the slow rollout of the service. "We could have launched it in December via BT Internet, and now everyone could be enjoying unmetered telecoms," a BT spokesman said. "The only thing stopping Surftime is Oftel."

Oftel claims it hasn't even received notification of the service. "I can categorically tell you that we have received no formal notification of price or service details from BT," an Oftel spokesman said.

Unbundling, it's a hot topic. Tell us your opinions on this week's news by mailing us at the Mailroom.

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