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Decision due on 2002 BT broadband complaint

Ofcom is still pondering whether BT's broadband pricing since 2002 has been unfair, but a final ruling may be close
Written by Graeme Wearden, Contributor

A complaint filed against BT back in the days when broadband was an expensive and scarce resource could finally be resolved within the next few weeks.

According to The Times on Monday, Ofcom is likely to rule within weeks whether BT's broadband pricing has been anti-competitive.

If found guilty, BT could be fined up to 10 percent of its turnover, although it is unlikely that hefty financial penalties would be imposed.

The complaint was originally brought back in April 2002 by Freeserve, after BT cut the cost of its wholesale ADSL products, which are resold to consumers by ISPs. Freeserve claimed that BT was selling these products to its Openworld retail arm at unfairly low prices, which helped them to undercut rivals in the marketplace. Such a "margin squeeze" would be illegal.

Freeserve's original complaint was twice rejected by Oftel, the telecoms regulator at the time.

But Freeserve, which has subsequently been rebranded first as Wanadoo and then Orange, appealed at the end of 2003, claiming that Ofcom had interpreted the law incorrectly.

Ofcom — which superseded Oftel — has been mulling the issue over ever since. In September 2004 it issued a provisional ruling that BT had infringed competition law, which BT contested.

Ofcom confirmed on Monday that the case, which now covers BT's pricing since June 2002, was still live, but declined to say when a final ruling might be made. "We're considering all the evidence before making a decision," said a spokesman.

BT was more forthcoming. "We strongly believe that there is no case to answer," said a BT spokesman.

A striking feature of the case is that since it was first brought, most of the key players have been rebranded or replaced, underlining the longevity of the proceedings. The broadband market has also changed radically since 2002 — with companies such as Orange and Carphone Warehouse now offering "free" broadband.

Details of the ongoing investigation can be seen here.

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