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Internet access prices unlikely to fall, despite Oftel action

Operators, not consumers, will see savings
Written by Jo Best, Contributor and  Graeme Wearden, Contributor

Operators, not consumers, will see savings

BT has fallen foul of watchdog Oftel once again, with the telco ordered on Monday to cut its wholesale unmetered internet charges by 17 per cent. The ruling, which will be back-dated to take effect from June 2002, will see millions wiped off BT's balance sheet. While Oftel director general David Edmonds hopes the price cuts will be passed on to consumers, the word from the telecoms industry is that this is improbable. "It's far more likely that ISPs will invest any saving to bolster their service and add additional content," said Jonathan Lambeth, head of corporate media relations at AOL UK. "I'm confident that AOL UK will pass on any benefits to consumers - it's much better to do it in terms of better content and better customer service." Large telcos such as Cable & Wireless and Energis buy BT's wholesale unmetered internet access product and resell it. Some sources in the industry are already indicating that these operators will absorb the savings rather than lower prices. Even if the whole saving is passed on to end users in the shape of lower prices, it's likely to be a reduction of less than 50p per customer per month. Both BT Openworld and Freeserve declined to say whether they are planning to cut their prices. For its part, Energis says it "will be reviewing cost saving implications with our customers on an individual basis", but declined to speculate further on whether retail prices might fall. Oftel's investigation stemmed originally from a complaint from Cable & Wireless, later backed by Energis, after BT continued to charge for call routing and management measures that had been needed when the unmetered access service was set up but had since become obsolete.
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