BT angry over Oftel report

MARY FAGAN

Industrial Correspondent

A bitter row erupted yesterday between BT and the telecoms regulator Oftel after the launch of a report on competition in the industry. Don Cruickshank, director general of Oftel, accused the company of having to be "dragged" towards change rather than taking a positive view. He warned that if new proposals to increase competition fail to work, he may seek to have the company broken up.

Mr Cruickshank was launching a wide-ranging document on the industry - Effective Competition: Framework for Action.

The release of the document to a small group of journalists the day before it was published also caused controversy.

It angered BT and prompted at least one City analyst to complain to the Stock Exchange, increasingly concerned about handling of sensitive information by utility regulators. Ted Graham, a BT spokesman, said: "Cruickshank is totally unprofessional."

Mr Cruickshank said: "One of the most important parts of the document is a message to BT. The faster the move towards effective competition in most market segments, the faster BT will be released from constraints."

He hinted that until he sees a change in attitude, he will continue to advise the Government against allowing the company to deliver broadcast entertainment over the wires or use radio links in local networks. Mr Cruickshank denied any suggestion of confrontation with BT, but added: "There is a rising degree of professional tension."

Changes proposed include abolishing the cap on line rental charges but keeping overall price changes to the present limit of inflation minus 7.5 percentage points until 1997.

Mr Cruickshank said the proposals would be commercially neutral for BT. If the company fails to reach agreement with Oftel, the matter will be referred to the Monopolies and Mergers Commission. BT's shares edged down by 0.5p to 408p.

Mr Cruickshank is also seeking better powers "to stamp on anti-competitive practices" through a condition in BT's licence. This would allow Oftel to issue an order prohibiting any action deemed anti-competitive pending further investigation. The regulator at present has no such prohibition powers.

BT said it viewed the report with "caution and concern". The company said: "It concentrates on the interests of our competitors instead of the interests of our customers and shareholders. This emphasis on competition is not necessarily in the best interests of consumers."

BT also said it is surprised at attempts to prohibit alleged anti-competitive action while an investigation is carried out.

Comment, page 17

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