Oftel changes role, will keep pressure on BT

Charged with opening up the BT-bound telecoms industry, the watchdog says it will reduce regulation except in key areas

Telecoms watchdog Oftel published its new approach to regulation Tuesday, promising to maintain pressure on BT in the domestic telephone and Internet arenas, but generally proposing a more hands-off approach.

Debate over Oftel's role has been raging in recent months as Internet and telecoms converge. With government keen to wire the nation and e-commerce a fast-growing industry, cheap Net access has become a high priority for the government and telecoms industry alike. Commentators have criticised Oftel for being out of touch and failing to put sufficient pressure on BT to reduce charges.

Director general of Oftel David Edmonds described today's announcement as "the most significant change in Oftel's approach to regulation since 1984".

E-minister Patricia Hewitt welcomes Oftel's change in strategy. "Oftel's announcement today for a light regulatory touch will help businesses and consumers to get the best possible deal in this rapidly developing market," she said.

Critics claim that Oftel should be increasing, not reducing, its power, but the organisation says it has been effective at introducing greater telecoms competition. "When Oftel was formed in 1984, BT ran everything. Now there are many more operators out there. Our new role is making sure that competition is working effectively rather than using regulation as a substitute for competition," the spokesman said.

But a DTI spokesman downplayed Oftel's role, claiming that it was government intervention rather than interference from the watchdog that forced BT to reduce its Internet charges. "It was pressure from government that speeded up BT's announcement," he told ZDNet News.

Oftel denies that reducing its regulatory powers will weaken its role even further, claiming that influencing particular services or prices has never been part of its remit. "We never had any powers to tell BT they have to introduce a product at a certain price," the spokesman claims.

Still, Oftel does not consider its job finished. While the business market is benefiting from increased competition and new operators, the spokesman admitted that BT still controls over 85 percent of the domestic market. "We accept that BT still has a dominant position in that market and we acknowledge there is still a need for regulation there."

In terms of Internet access, Oftel intends to keep a close eye on local loop unbundling -- the process under which BT must open up its exchanges to other operators by July 2001. "We want other operators involved. Here regulation is still needed to increase competition," the spokesman said.

So how does Oftel intend to get the best voice and data deals for consumers under its new strategy? Highlighting local loop unbundling and the Calls and Access scheme -- where other operators like Localtel take over customer service from BT and offer calls at reduced rates -- the Oftel spokesman offered one more hope for UK consumers. "More and more people are using mobile phones -- and the prices are coming down," he said.

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