BT goes to court over watchdog's new powers

British Telecom yesterday began its long-awaited High Court challenge against controversial moves by Don Cruickshank, the industry regulator, to take on wide-ranging powers to ban anti-competitive behaviour.

However, as the judicial review got under way it emerged that Mr Cruickshank could reopen a tough four-year price regime for BT's residential customers, which he has tied to the new fair trading powers, if the company won the court case.

An Oftel spokesman confirmed that the regulator could look again at the price formula, which cuts domestic phone bills by 4.5 per cent a year from next August until July 2001. It also excludes almost all business customers for the first time on the grounds that competition in the business phone market is already well established.

In court Roger Henderson QC, representing BT, attacked the new licence conditions which he claimed would give Mr Cruickshank much wider powers than those envisaged by Parliament when it passed the law which defined the role of Oftel, the watchdog, at privatisation in 1984.

The outcome of the judicial review is also likely to influence the future direction of the UK regulatory system and has implications for the Government's broader competition policy. The proposals draw heavily from European competition law, which the Government has recently delayed introducing into the UK.

The new powers, which come into effect from 31 December, enable Mr Cruickshank to move much more quickly on any action by BT or other telecoms companies which he decided was anti-competitive. They would replace the current system based on many individual licence conditions designed to stamp out specific actions such as the requirement to provide itemised billing for customers or a system for making calls to the emergency services.

BT accepted the measures in the summer at the eleventh hour, narrowly averting a full-blown investigation by the Monopolies and Mergers Commission, in one of the most bitter disputes ever between the company and its regulator.

Approval by BT came after Sir Peter Bonfield, chief executive, secured what he claimed was a key concession, where Mr Cruickshank agreed to appoint an advisory body to vet his decisions.

However, the group of four experts, which will be chaired by Jeremy Lever QC, a former leading competition lawyer, has no power to enforce any of its recommendations. In court yesterday BT labelled the advisory group a "shadow of the Monopolies and Mergers Commission" with no power to making binding rulings. Describing the advisory board as a "neutered body", Mr Henderson argued that "checks and balances are not what they appear".

Though BT has accepted the new powers and the package of price controls, the company claimed it had a duty to mount the legal challenge to protect its shareholders. The action is supported by Vodafone, Britain's leading mobile phone operator, which believes the changes concentrate too much power in the hands of one person.

The main thrust of BT's attack was on the scale and subjective nature of Mr Cruickshank's new powers, which the company claimed would elevate him above the existing overall competition watchdog, the Office of Fair Trading. Indulging in liberal cricketing metaphors, Mr Henderson said: "Effectively we're getting a second wicket keeper."

He said Oftel would regard BT "as in a dominant position across the board" because of its near monopoly of local domestic services. The burden would constantly be on BT to prove its strategy was not designed to thwart competition.

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Austen Lloyd: Law Costs HOD - Southampton

£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...

SThree: Recruitment Resourcer

£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn