Regulator satisfied with BT's price cuts

Oftel has closed its investigation into the amount BT charges for wholesale high-speed internet services. The telecoms regulator said it had looked carefully at BT's new prices and decided the cuts had been achieved through genuine cost savings and did not constitute predatory pricing.

BT announced last month it would cut the amount it charges internet service providers (ISPs) such as Freeserve to use its broadband network.

Broadband is high-speed, always-on internet access, which does away with the need to wait to dial up for a connection or endure long download times. The move should feed down to lower prices for customers as ISPs reduce their charges.

David Edmonds, Oftel's director-general, said: "Oftel has looked very carefully at BT's new prices following a complaint from an operator that the prices of BT's wholesale broadband products were anti-competitive.

"Oftel has found that BT's price reductions reflect the significant cut in network and provision costs that BT has managed to achieve in order to bring wholesale broadband internet prices down.

"BT can pass these cost savings on to ISPs, who in turn can reduce their own retail prices for broadband internet access to customers."

He said the closure of the investigation meant ISPs – many of which had been concerned that Oftel would find BT's prices anti-competitive – could now confirm their price reductions to their customers.