Home & Office

Freeserve won't let broadband complaint die

The seemingly never-ending battle over Freeserve's claim that BT's broadband has been anti-competitively priced isn't quite over, despite Oftel twice rejecting the charge
Written by Graeme Wearden, Contributor
The fight between Freeserve and the UK's telecoms regulators over BT's allegedly predatory pricing is set to enter its third year, with the Internet service provider determined to take its battle as far as possible.

Freeserve announced on Monday that it plans to bring the Competition Act Tribunal (CAT) into the dispute. It wants the tribunal to overturn the decision taken last month by Oftel that BT has not made anti-competitive cuts to the cost of BT Openworld's broadband services.

"We believe that Oftel's decision and methodologies employed are flawed in a number of material respects. We stand by our allegations that BTs pricing policies are having a material adverse effect on competition in the UK," explained a Freeserve spokeswoman.

"As a result, we will be appealing this decision to the Competition Appeal Tribunal and have every expectation that we will succeed in demonstrating that BTOpenworld has been engaged in predatory pricing over a significant period of time," she added.

This row began shortly after BT made significant reductions to the cost of its wholesale broadband services. Freeserve then made a series of allegations against BT, including the charge that Openworld was selling its broadband at a loss -- something BT is not permitted to do because it would hamper broadband competition.

These charges were rejected by Oftel in May 2002, at which point Freeserve appealed to the Competition Commission Appeal Tribunal (which is now the CAT). This resulted in Oftel being instructed to re-examine Freeserve's allegation of predatory pricing -- which led to a further verdict of "not guilty" being delivered on BT.

BT, which has always denied the allegations, is unimpressed that this dispute still hasn't been resolved.

"Freeserve's tactic of serial complaining is using up valuable resources from all sides; resources that would be better deployed serving UK customers," said a BT spokesman.

Since April 2002, the UK broadband market has seen massive growth -- largely thanks to the ADSL wholesale price cuts of April 2002. Even if Freeserve does eventually persuade someone in authority that it has a good case, it's unlikely that adequate reparations could be made.

"Frankly, Freeserve are bad losers," claimed one BT insider close to the issue.

Freeserve, though, insists that its fight is a good one.

"Given the importance of achieving sustainable competition in the broadband market, we believe it in the interests of all parties involved that clarity and certainty are brought to this area as soon as possible, and will be looking to get the appeal filed with the CAT at the earliest opportunity," the ISP insisted on Monday.

Freeserve also says that Oftel is to blame for the fact that the issue hasn't yet been resolved.

"It is unfortunate that this case has dragged on so much, but if Oftel had adequately explained their reasons back in May 2002, we could have spotted the fundemental flaws in their application of competition law back then. However, this is the first time Oftel has actually shared its in-depth methodology with Freeserve," the Freeserve spokeswoman said.

Editorial standards