BT's rivals hope for progress on link-up charges: Mary Fagan reports on industry expectations for an Oftel consultation document

BT'S expanding group of competitors in the provision of telecommunications services are hoping for a boost from Oftel, the industry watchdog, with the publication tomorrow of a consultation document on how much telephone companies should be charged to use BT's wires.

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.

Start your day with The Independent, sign up for daily news emails
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

Recruitment Genius: Software Development Manager

£40000 - £50000 per annum: Recruitment Genius: This is an exciting opportunity...

Ashdown Group: Product Manager - (Product Marketing, Financial Services)

£30000 - £35000 per annum + Benefits: Ashdown Group: Marketing Manager - Marke...

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

Paul Scholes column

The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee