BT rivals win fair price access to broadband

Oftel yesterday dealt its second blow to BT in as many days and ordered the dominant fixed-line telecoms group to connect rivals to its broadband network at a fair price.

The telecoms regulator did not go as far as setting what it termed the "non-discriminatory" price that BT must charge. The ruling, however, should end a year-long dispute between BT and alternative high-speed network operators Thus and Energis that had complained about the existing regime.

The news failed to support shares in Thus – down 0.5p to 11.75p – and Energis, which closed 18.5 per cent lower at 1.06p. Shares in BT dropped by 2.25p to 247.75p..

Under the current rules, network operators such as Energis and Thus who sell broadband access to the internet must buy wholesale products at prices set by BT unless they install their own high-speed digital subscriber line (DSL) equipment at BT exchanges.

Oftel said the introduction of fairer pricing would help speed the relatively slow take up of broadband in Britain. It should allow for a wider range of services as the UK tries to catch up with the levels of penetration enjoyed by most of the developed world.

David Edmonds, Oftel's director general, said: "Progress in rolling out broadband continues; 20,000 new customers are signing up each week, and prices are as cheap as in France, Germany or the USA. By the end of June, we estimate that around 700,000 customers will have fast access to the internet."

He said moving BT to charging a fairer price for access to its DSL network would further promote the provision of broadband services in the UK. "It will enable operators to offer consumers a wider range of products," he said. "Prices for these new services will be set by Oftel at a level that encourages competition between different providers of broadband services, and ensures that other operators still have an incentive to invest in alternative broadband delivery mechanisms."

The ruling came a day after Oftel unveiled a package of new measures that opened the door to BT rivals in residential voice services. Consumers will be able, for the first time, to pay for both line rental and calls on one bill even if their service comes from an operator other than BT. Currently consumers who choose to pay for their calls through a rival operator receive two bills as they still have to pay BT for line rental.