BT's rivals hope for progress on link-up charges: Mary Fagan reports on industry expectations for an Oftel consultation document
Monday 07 June 1993
The consultation document on the issue of interconnection charges will be accompanied by Oftel's thoughts on the controversial question of accounting separation at BT.
BT strongly resists the idea of separating and clarifying the costs of running different parts of its business, fearing this would be a precursor to a potential break-up of the company. However, it is regarded as vital in the industry if new telephone network operators are to succeed.
Cable television companies and new entrants such as Energis, the telecommunications arm of the National Grid Company, argue that they will not obtain fair play when using BT's network until the costs of each part of BT's operations are made clear and there is transparency in interconnection charges. Oftel is also expected to rule soon on a new interconnection agreement between BT and Mercury Communications. Any new deal is expected to be considerably cheaper for Mercury. Mercury also believes that BT owes it up to pounds 50m in back payments, as the new agreement is supposed to be backdated to August last year.
Until now the terms for interconnecting to BT's network to complete calls have been negotiated between BT and the operator concerned. Oftel is called in when talks collapse, and the process can take many months.
New telecommunications companies have been waiting for months for some sign of a resolution. However the problem has been exacerbated by BT's resistance and by changes at Oftel. Since April, the watchdog has had a new director-general, Don Cruickshank, a former Virgin executive.
David Dey, the chief executive of Energis, hopes that Mr Cruickshank will take a radical new approach to regulation. He says that Oftel must publish without delay a schedule of interconnection tariffs so that each telephone operator knows exactly what it is faced with when it makes business plans.
Energis, whose basic network will be founded on the nation's electricity system, expects to be one of BT's biggest interconnect customers. It hopes to be able to serve 70 per cent of the population within a year.
However, according to Mr Dey, himself a former senior executive with BT: 'We do not want a war with BT but we are running into obfuscation. We do not intend to allow Oftel to spend 12 months looking into it.' The implied threat is that Energis could take the matter to the Monopolies and Mergers Commission.
The Oftel consultation documents come at a sensitive time, as the Government is weeks away from the pounds 5bn sale of more shares in BT. A key issue for BT is the expansion of cable television companies into telephony, as they will be the most serious threat to BT's local services. The companies depend on BT or Mercury to deliver their calls beyond their franchise areas. A favourable move from Oftel on interconnection charges could give them a substantial boost.
- 1 Mario Balotelli: Staff at arson-hit Manchester Dogs' Home convinced Liverpool striker is behind five-figure donation
- 2 There is literally not a single woman in this iPhone 6 queue
- 3 Scottish independence: Tory revolt against 'devo max' grows as Rail Minister Claire Perry joins
- 4 Hitler’s former food taster reveals the horrors of the Wolf’s Lair
- 5 Scottish independence referendum: JK Rowling, Russell Brand, Nigel Farage and more react to the 'No' vote
Scottish independence referendum: Frankie Boyle reacts to nation's 'No' vote - 'To be fair, I've always hated Scotland'
Scottish independence referendum results: David Cameron pledges plans for 'English votes for English laws' by January
Scottish independence live: Scotland gives a clear 'No' in historic referendum - as it happened
Scottish referendum results: David Cameron set to unveil major devolution of powers to England
Hitler’s former food taster reveals the horrors of the Wolf’s Lair
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Scottish independence referendum: A nation divided against itself
Scottish independence: David Cameron is becoming the 'George Bush of Britain'
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: The Queen breaks silence on referendum debate – as think tank warns of £14bn black hole if Scotland votes Yes
Archbishop of Canterbury admits doubts about existence of God
iJobs Money & Business
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...
Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...
£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...