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BT to fight Internet access price cuts

A proposed 7 percent cut in the price of a crucial BT product will be fought by the telco, which believes that Oftel is behind the times
Written by Graeme Wearden, Contributor

Attempts by Oftel to push down the wholesale cost of unmetered Internet access will be opposed by BT, which has accused the regulator of relying on out-of-date information.

Oftel announced on Tuesday morning that it is proposing a 7 percent cut in the cost of what is called DLE Friaco. This product is sold by BT to rival telcos such as Energis and Worldcom. They, in turn, use it to connect Internet Service Providers selling unmetered Internet packages.

Oftel initially decided the cost of DLE Friaco in mid-2000, when the product first launched. The regulator has now taken a second look at the pricing structure in light of 18 months of data. "We've collected information from BT and operators, and have concluded that the price should come down by 7 percent," an Oftel spokesman told ZDNet UK.

Such a reduction would be good news for consumers. "We'd expect most, if not all, of this reduction to be passed on to end users," added the Oftel spokesman. David Edmonds, Oftel's director general of communications, made similar comments in a statement.

Unmetered Internet packages typically cost up to £15 per month in the UK. A 7 percent price cut, if fully passed on to the consumer, could see this drop by around £1 a month.

BT, however, looks set to fight the 7 percent figure. "The data that Oftel has used in its calculations is from late autumn last year, and we believe this information is quite out of date," a BT spokesman said.

"BT will provide more up-to-date information as part of the consultation process, and these figures will show that a cut of something less than 7 percent cut is actually needed," he added.

Oftel's proposal comes less than a fortnight after BT announced it was planning a significant change in its broadband strategy. This is expected to include cuts in the cost of its wholesale high-speed Internet product. Further details on the broadband strategy had been expected this week, but sources within BT indicate that an announcement is due sometime next week.

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