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
ebooksAn introduction to the ground rules of British democracy
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: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...

Reach Volunteering: Trustees with Finance, Fundraising and IT skills

Voluntary and unpaid, reasonable expenses reimbursable: Reach Volunteering: St...

Day In a Page

Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
Transfer window: Ten things we learnt

Ten things we learnt from the transfer window

Record-breaking spending shows FFP restraint no longer applies
Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent