Oftel dismisses select committee plan for forced break-up of BT

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The Independent Online

The current structure of the telecoms giant BT looked set to remain in place yesterday after the telecoms watchdog Oftel said it could not order a break-up and that the issue was not on its radar screens in any case.

The current structure of the telecoms giant BT looked set to remain in place yesterday after the telecoms watchdog Oftel said it could not order a break-up and that the issue was not on its radar screens in any case.

"In no sense is Oftel pulling back from proportionate and focused regulation but it is important for competition, BT and the markets to understand that the forced break-up of BT is not on Oftel's agenda," the regulator said.

The statement came in response to a parliamentary report, published in May, which had urged Oftel to consider whether BT should be broken up to encourage the take-up of broadband internet access among consumers.

It also came as Ben Verwaayen, BT's chief executive, told the company's annual general meeting in Edinburgh that orders for broadband were now running at about 12,000 a week and that there were now 280,000 end users connected.

While Oftel said it believed it had sufficient powers to deal with any anti-competitive behaviour in the broadband market, it noted that recent data suggested the UK had one of Europe's "most competitive marketplaces in broadband".

If take-up continued at the present rate of more than 20,000 customers a week, it said, then the UK would have 750,000 broadband users by the end of July, making it "one of the fastest ever" adoption rates of a new technology in the UK.

"Because Oftel has sufficient regulatory powers to develop a competitive broadband market, the option of breaking up BT is therefore not on its current agenda," it said.

Furthermore, it pointed out that the corporate structure of the company was a matter for the BT board and its shareholders and that neither it, nor the Secretary of State for Trade and Industry, had the right to order a break-up. "There is a power for the Secretary of State to make a reference to the Competition Commission if it is considered that there is a scale or complex monopoly. The Government response states that no such reference is currently proposed," Oftel said.

The select committee report had said Oftel should consider a proposal that BT's network business be spun off.

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