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Ofcom urged to make BT more transparent

Rival operators want to use Ofcom's strategic review of the telecoms market to force changes on BT

A group of UK telecoms operators has demanded that Ofcom uses its strategic review of telecoms to bring in new measures to prevent BT abusing its powerful position.

The UK Competitive Telecommunications Association (UKCTA), which is made up of many of BT's rivals, claims that the former incumbent is still in a position to block effective competition in the marketplace. In its submission to Ofcom's Strategic Review of Telecommunications, UKCTA urges the regulator to devise a regulatory system that would prevent BT from abusing its dominance of the broadband sector.

UKCTA claims that BT's wholesale operation, which sells broadband services to over 100 Internet service providers, unfairly favours its retail operations over other rival ISPs.

"When BT Retail goes to market it can get what it wants, in terms of pricing and timing, from BT Wholesale in a manner that is very different from what competitors can get from the same level of BT Wholesale," claimed David McConnell, UKCTA chairman.

BT denies that this is the case, and insists that every customer is treated on the same basis.

"We think that is shown by the fact that the market is so competitive. BT Retail has less than 50 per cent share of the DSL retail market, and far less of the overall market when cable is included," said a BT spokesman.

Ofcom's Strategic Review of Telecommunications will run for the whole of 2004, and could lead to the regulator making some sweeping changes to the existing telecoms market. Tuesday was the deadline for submissions to this review.

UKCTA consists of AT&T, Centrica, Cable & Wireless, Colt, Energis, Easynet, Fibernet, Global Crossing, Kingston, MCI, NTL, Opal Telecom, Opera Telecom, Redstone, Telco Global, Telefonica, Thus, Tiscali and Your Communications. In its submission, UKCTA said that Ofcom must force BT to be more open about the prices that it charges the ISPs that resell its broadband products.

According to McConnell, this "transactional transparency" will bring more trust to the market. BT isn't allowed to favour its retail arm with lower prices or extra information, but UKCTA claims that these "Chinese Walls" aren't working.

"They aren't very effective, really, and I don't think that many people think they are effective," said McConnell.

BT has also published details of its submission to Ofcom, in which it paints a radically different picture of the state of the UK telecoms market.

It has urged Ofcom to reduce regulation of the retail sector, and to concentrate its efforts on breaking down the barriers encountered by new entrants to the market, rather than regulating on the basis of market share.

"Regulation has to reflect the realities of the market," said BT chief executive Ben Verwaayen in a statement.

"Convergence is coming and consumers will soon make no distinction between fixed and mobile services for their voice calls, emails, text messages or use of the Internet. Regulation of the fixed line market on its own is simply not relevant anymore."