BT to call for broadband regulation changes

Britain's dominant telco is contemplating building a '21st century network' - but wants regulations loosened first

BT is set to urge the UK government to relax the regulations that govern Britain's telecommunications market, in a move that the telco says would allow it to implement a major upgrade to its nationwide network.

Chief executive Ben Verwaayen is expected to tell MPs on Tuesday that lighter regulation would encourage BT's shareholders to support the creation of a "21st Century Network" that would mean better and faster services for businesses and consumers.

Following the deregulation of the UK telecoms market, a number of restrictions were placed on BT in an attempt to create effective competition. These force the telco to offer a wholesale version of its retail products -- allowing other companies to compete at the retail level -- and prevent BT from selling its own retail products at a loss, which would be anti-competitive.

These restrictions have helped to create a relatively open and competitive broadband market in the UK, in which around 150 Internet service providers compete with BT to sell ADSL to homes and businesses.

At the wholesale level, BT has virtually all the market for ADSL, but the telco is keen to point out that the cable market -- dominated by NTL and Telewest -- is just as large.

It's likely that some of BT's rivals would fight any attempts to loosen regulation, especially as some of them have just teamed up to push for tighter controls on its wholesale-broadband prices. But BT believes that the creation of Ofcom, the super-regulator for the broadcasting and telecommunications industries, gives an opportunity for more light-touch regulation.

Verwaayen will make his case on Tuesday to the Trade and Industry select committee, which has organised an inquiry into the "development of broadband in the UK".

He is also expected to tell MPs that Broadband Britain is a success story, with the UK now boasting the second-largest broadband market in Europe.

The select committee is taking evidence from a number of telcos, as well as Oftel and the Department of Trade and Industry.