Lang acts over BT-Oftel row

Ian Lang, President of the Board of Trade, is seeking an end to the increasingly bitter impasse between BT and the telecoms regulator, Oftel, over changes to BT's licence conditions.

The Department of Trade and Industry has offered to mediate over Oftel's demand for wide anti-competition powers, promising BT the right to appeal the regulator's decisions, through amendments to BT's licence under the Telecommunications Act or by statutory means.

Mr Lang is believed to be offering BT an accelerated court process or the right of a direct appeal to the Secretary of State. In exchange, BT would accept Oftel's demand for wide-ranging competition powers.

BT, in its formal response to Oftel's pricing and "fair competition" proposals, said it "welcomed the commitment" to liberalise pricing, although it still had technical reservations about the value of X in Oftel's calculation of mandated price decreases.

Of Oftel's demand for greater competition powers, BT said any regime must be "fair and reasonable and include the natural justice of a right of appeal". BT sources indicated that the dominant operator welcomed the DTI's intervention on the issue, which is aimed at avoiding a reference to the Monopolies and Mergers Commission.

The issue of competition policy continued to rumble in the telecoms market yesterday, as BT remained under pressure from cable operators over its alleged "dirty tricks" campaign. BT formally responded to those charges yesterday, telling both Oftel and the Cable Communications Association that a computer glitch was behind hundreds of tele-marketing calls to ex-directory cable customers around the UK.

Under its licence conditions and data protection laws, any misuse of confidential phone records by direct marketing staff would be in breach of the rules. Several cable operators complained last week that their customers had been rung by BT staff, asking them to reconsider their decision to abandon BT. The operators also suggested that BT was dealing in misinformation.

"This is evidence that BT needs to be strictly regulated by competition rules," one cable operator said.

Oftel said yesterday it would review BT's formal explanation, and would make a statement later this week. The CCA had no official comment yesterday. Bob Frost, its chief executive, said: "We will take some time to evaluate BT's review before responding."

But several cable operators expressed reservations about BT's explanation. "Even if it is just a cock-up, there is no question in my mind that BT is guilty of over-zealous marketing," one cable source said.

"BT is attacking this market like it is a war, and its staff is responding to that. It is no wonder there are excesses."

BT has been desperate to win back customers lost to the cable industry's aggressive pricing policies. BT has hit back with promises of lower long- distance charges and special discounts.