Oftel to probe BT flat rate internet service

Telecoms regulator Oftel late yesterday launched its first formal competition inquiry against BT to stop it dominating the ISP market.

Oftel is concerned BT may be abusing its dominant position by scrapping pay-per-second access rates in a set of packages announced at the beginning of the month. BT was offering free off-peak phone calls and internet access for a monthly fee. The regulator is concerned that BT could use its dominance of the domestic phone market to win a dominant position in the ISP market and fears that a cross-subsidy from the profitable voice business could stifle competition. BT announced the new charges as "the most radical pricing overhaul yet" and is determined to go ahead. An inquiry could take months and the telco believes it has overwhelming consumer support. It has received 400,000 enquiries about the new pricing. The packages under investigation are BT's 'Talk & Surf Together' which allows free off-peak local phone calls and internet access for £19.99 per month and BT's 'Surf Together' which offers line rental and free internet access for £14.99. Talk & Surf is £2 more than announced because BT believed that it would attract regulatory attention for predatory pricing. Since the roasting of Oftel director general David Edmonds received from a Commons Select Committee two weeks ago, Oftel has issued a string of proposed regulations on local loop unbundling.