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Oftel takes another look at the Net

Watchdog gears up to reassess telecoms in the Internet era -- meanwhile, its own role could be changed
Written by Jane Wakefield, Contributor

Oftel has put Internet access costs at the top of the agenda, according to its roadmap for the coming year, which is published this week. This has left commentators asking if the watchdog has finally decided to take notice of the Internet revolution.

First on its to-do list is a major review of BT's (quote: BT) prices, the proposals for which are due in the next few weeks. BT currently has to cut prices at a rate of four and a half percent below inflation. This is due to expire next year.

Second, Oftel will undertake a review of Internet access -- in terms of prices, competition and framework -- in July. The watchdog claims that the raft of unmetered access tariffs expected in the next few months will help get more people online. "Unmetered access is opening out the market. It is moving in the right direction, but it needs to go a lot farther," an Oftel spokesman said.

The Campaign for Unmetered Telecommunications (CUT) believes Oftel is beginning to wake up to the Internet revolution. "Internet access is definitely high on its agenda now. Having seen Oftel a year ago, this is a marked turnaround," said a CUT spokesman.

The spokesman also offered some words of advice for the watchdog: "Concentrate on the local loop," he said. Local loop unbundling -- which will see other operators taking over substantial parts of BT's network -- is widely seen as the greatest hope for opening the Internet market and bringing consumers affordable prices. Itps not due to happen until July 2001, but both the government and Oftel have made it clear they want this timetable brought forward.

According to an Oftel spokesman, the regulator is currently waiting for detailed reports from BT on the issues surrounding unbundling. Independent consultants will be brought in to assess a realistic date for local loop unbundling.

Oftel announced earlier this month that it will relax regulation in areas it considers competitive enough, such as the international calls market. Some commentators see this as an indication that Oftel is about to get tougher on BT. The government has recently granted the regulator new powers to investigate anti-competitive behaviour.

Oftel's role may be threatened by the government white paper on the reform of telecommunication regulation, due in the autumn. "Regulating Communications: The Way Ahead" will reassess Oftel's current position. "As telecoms and broadcasting converge, the government needs to reassess how to regulate it," a DTI spokesman said. "They will consider if Oftel's role is still valid."

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