Rivals attack BT over high-speed net access

BT, the telecoms giant that has been roundly attacked for the way it is breaking its monopoly on high speed internet access, faces fresh allegations that it is abusing its market dominance.

BT, the telecoms giant that has been roundly attacked for the way it is breaking its monopoly on high speed internet access, faces fresh allegations that it is abusing its market dominance.

The new claims, made by a group of 10 telecoms companies represented by the law firm, Olswang, centre on BT's wholesale high speed internet offering.

The telecoms regulator, Oftel, is investigating the claims, and it is due to make a ruling before Christmas.

The group, which includes Thus, Cable & Wireless, Colt, Energis and Atlantic, claims that the difference between BT's retail and wholesale offering is so small that rival operators can't compete.

"We believe that there is good evidence that competition will be damaged because fewer companies will be able to enter the market as a result of BT's dominant position," said Richard Sweet, the regulatory manager at Thus. "The price differential [between retail and wholesale] is so small that we just won't be able to compete with BT. As a result BT will have a massive head start in this market over the next 12 to 18 months."

BT, run by Sir Peter Bonfield, is the only operator capable of providing high-speed internet services - known as DSL - over the existing copper wire network. As a result, rival telecoms companies are forced to buy DSL services wholesale from BT.

BT offers DSL services directly to retail customers for a £39.99 subscription, through its OpenWorld division. It is understood that the telecoms group, through its Ignite division, sells the wholesale service at an equivalent price of £35.

However, the rival telecoms companies claim that the margin is too small and that they are not able to compete with OpenWorld.

Mr Sweet said: "On top of the wholesale cost we have to add billing, help desks, customer services, advertising and servers. When it is all added up, it is more a question of how much we would have to subsidise our service by in order to match OpenWorld."

The problem is exacerbated by the delays in opening up BT's local exchanges to give rivals access to DSL technology, in a process called local loop unbundling.

Already, BT has been attacked by its rivals, Oftel, the European Commission and the Conservative Party for dragging its heels. However, unbundling isn't expected to kick in until the middle of next year.

A BT spokesman denied the claims that it is abusing its dominant market position. "We do not discriminate between OpenWorld or any other operator when selling the service," he said. "The wholesale prices were agreed with Oftel and are some of the cheapest in the world."

The spokesman added that rival telecoms operators have access to a limited high speed internet service through cable companies.

A spokeswoman for Oftel said: "We have been ploughing through BT's business case and have been listening to the critics' comments. A final decision will be made before Christmas."

DSL will significantly speed up internet access and allow video and music to be efficiently delivered over the internet. As well as the telecoms companies gearing up to provide the service, an army of small software companies has also been formed to develop new DSL-enabled products.