BT gets off lightly

Oftel is to curb BT's prices to encourage competition and is threatening further action despite its declared aim of softer regulation.

The Communications Managers Association welcomed the move saying it recognised the lack of competition affecting the majority of the UK. Speaking to silicon.com, David Harrington, director general of the CMA, said: "It's OK if you're in London, but if you've got a countrywide net - there's only one supplier. This is particularly true north of the border." BT said that it was disappointed the regulator hadn't accepted its view of the extent that competition had entered the market. However, the City breathed a sigh of relief, as it had expected Oftel to come down much harder on the troubled UK incumbent telco. And the five telcos, which had formally complained to Oftel over BT's slow unbundling of the local loop are reserving their formal response for Oftel. Colt Telecoms, however, said it welcomed the price curbs on interconnection at the 'headline level' but would be going over the fine details. Oftel announced it would extend the current regime limiting BT retail price rises to RPI - 4.5 per cent and said this would save a total of £270m for household users. David Edmonds, director-general of Oftel, said: "Oftel proposes to introduce tough price controls on interconnection charges, of up to RPI minus 11.5 per cent until 2005, which should result in other operators offering lower prices if they pass on the savings to customers."