Wholesale price cut for unmetered Net access

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Unmetered internet access could become cheaper for millions of homes in the UK under price cuts proposed yesterday by Oftel, the telecoms regulator.

Oftel wants BT to slash the amount it charges other telecoms firms to connect Internet service providers such as Freeserve and AOL to the network by 7 per cent. The cut was smaller than the industry had expected.

"Operators should ultimately be able to pass some or all of this saving on to their customers," said Oftel's David Edmonds, the director general of telecommunications.

Currently four million homes in the UK pay a flat monthly rate, often £14.99, to surf the web for as long as they want. About 11 million homes are online.

Oftel is pushing for the price cut after studying BT's cost base for the past year-and-a-half.

Mr Edmonds said: "Cuts in BT's charges will mean UK consumers will continue to enjoy some of the cheapest prices in Europe for Internet access."

Consultation on the planned changes will close on 19 March and Oftel intends to take a final decision in the spring.

The proposals cover only narrowband services. BT is already planning to bring down the cost of broadband access under its new chief executive Ben Verwaayen.

A spokesman for the telecoms giant said Oftel had based its proposed cut on "outdated" figures. He added: "The 7 per cent reduction is more than it needs to be."

Shares in BT slipped 0.5p to 242.25p.