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
News
people'It can last and it's terrifying'
Sport
Danny Welbeck's Manchester United future is in doubt
footballGunners confirm signing from Manchester United
Sport
footballStriker has moved on loan for the remainder of the season
Sport
footballFeaturing Bart Simpson
PROMOTED VIDEO
New Articles
Olivia Colman topped the list of the 30 most influential females in broadcasting
tv
News
Kelly Brook
peopleA spokesperson said the support group was 'extremely disappointed'
News
The five geckos were launched into space to find out about the effects of weightlessness on the creatures’ sex lives
i100
Life and Style
techIf those brochure kitchens look a little too perfect to be true, well, that’s probably because they are
Sport
Andy Murray celebrates a shot while playing Jo-Wilfried Tsonga
TennisWin sets up blockbuster US Open quarter-final against Djokovic
Arts and Entertainment
Hare’s a riddle: Kit Williams with the treasure linked to Masquerade
booksRiddling trilogy could net you $3m
Arts and Entertainment
Alex Kapranos of Franz Ferdinand performs live
music Pro-independence show to take place four days before vote
News
ebooksAn unforgettable anthology of contemporary reportage
News
news Video - hailed as 'most original' since Benedict Cumberbatch's
News
i100
Life and Style
The longer David Sedaris had his Fitbit, the further afield his walks took him through the West Sussex countryside
lifeDavid Sedaris: What I learnt from my fitness tracker about the world
Arts and Entertainment
Word master: Self holds up a copy of his novel ‘Umbrella’
booksUnlike 'talented mediocrity' George Orwell, you must approach this writer dictionary in hand
News
i100
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

SQL Implementation Consultant (VB,C#, SQL, Java, Eclipse, integ

£40000 - £50000 per annum + benefits+bonus+package: Harrington Starr: SQL Impl...

Head of IT (Windows, Server, VMware, SAN, Fidessa, Equities)

£85000 per annum: Harrington Starr: Head of IT (Windows, Server, VMware, SAN, ...

Technical Software Consultant (Excel, VBA, SQL, JAVA, Oracle)

£40000 - £50000 per annum: Harrington Starr: You will not be expected to hav...

SQL DBA/Developer

£500 per day: Harrington Starr: SQL DBA/Developer SQL, C#, VBA, Data Warehousi...

Day In a Page

'I’ll tell you what I would not serve - lamb and potatoes': US ambassador hits out at stodgy British food served at diplomatic dinners

'I’ll tell you what I would not serve - lamb and potatoes'

US ambassador hits out at stodgy British food
Radio Times female powerlist: A 'revolution' in TV gender roles

A 'revolution' in TV gender roles

Inside the Radio Times female powerlist
Endgame: James Frey's literary treasure hunt

James Frey's literary treasure hunt

Riddling trilogy could net you $3m
Fitbit: Because the tingle feels so good

Fitbit: Because the tingle feels so good

What David Sedaris learnt about the world from his fitness tracker
Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Saudis risk new Muslim division with proposal to move Mohamed’s tomb

Second-holiest site in Islam attracts millions of pilgrims each year
Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering