This follows proposals by Oftel, the industry regulator, to make the company produce separate accounts for different parts of its business and to ensure rivals that need to interconnect to the network are charged no more than BT itself.
Under the present system rivals, including Mercury and the cable television companies, negotiate in secret with BT and resort to Oftel only if no deal can be reached. They argue that the system is lengthy, time-consuming and that there is no guarantee of being charged a fair price by BT.
The debate over interconnection and separate accounts coincides with the final stages of the Government's pounds 5bn sale of BT shares. The company said that its full response to Oftel's proposals would be published in mid- July, which could clash directly with the close of the share sale.
BT has so far resisted separate accounting and has not yet addressed the issue of how costs should be allocated to different parts of its business. It is also concerned about 'transfer pricing' - the calculation of how much it should charge its retailing service for the use of its own wires.
Under the plans announced yesterday, BT would in future agree with Oftel what it can charge rivals for the use of different components of the network in cases where they have no alternative but to use BT. The company will then publish a schedule of the agreed prices. BT would also agree with the regulator an inflation-linked formula to control the prices over a period of years.
Where there is an alternative to using BT as a carrier for calls, which there is in long-distance and international networks, BT says that prices should not be regulated. The company also says other network operators should also have to publish how much they charge other companies for using their wires.
Oftel wants to retain the right to arbitrate on published prices. If BT and Oftel cannot agree on interconnection prices and accounting separation the company will be referred to the Monopolies and Mergers Commission.
Money, page 20Reuse content