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NextCall prepares to sue for pounds 20m after seven-month telecoms network delay

NEXTCALL, a telecoms start-up, is preparing to sue British Telecom for pounds 20m in damages, and will next week urge a House of Commons Select Committee to give Oftel, the telecoms watchdog, more power to foster competition over phone networks.

Based in Borehamwood, north London, NextCall began offering voice and Internet services to small businesses and residential customers in South- west England last January. Under calls and access regulations, BT must give alternative service providers access to the telecoms network.

"BT were messing us around," said Andrew Harrington, Nextcall's chief executive. "There is no mechanism to force BT to put in place the resources to make a service work."

NextCall claims that BT, and indeed David Edmonds, the director general of Oftel, failed to live up to regulatory provisions designed to help free up the telecoms market. The seven-month delay in obtaining access to BT's network cost NextCall millions of pounds, it is alleged.

Mr Harrington gave notice in August that NextCall would seek a judicial review for the Mr Edmonds' inaction. Since then, the director general has issued two provisional orders obligating BT to facilitate network access.

"This has resulted in an improvement," Mr Harrington said yesterday. "BT takes it seriously now, but from January to August I was friendless and I've suffered a huge financial loss."

Previously a European telecoms analyst with Salomon Smith Barney, Mr Harrington has pressed his concerns about Oftel's lack of effective clout with James Purnell, a member of the Prime Minister's policy unit who advises Tony Blair on telecoms issues. Mr Harrington fears that BT's dominance coupled with regulatory weakness threatens the Government's aim to make Britain a leader in e-commerce.

Indeed, Mr Edmonds recently admitted that it would be "daft" for him to say that Oftel had sufficient power to effectively force greater compliance with open access policies.

Network access is likely to become increasingly contentious as new operators launch high-speed digital Internet services. In mid-2001, BT is expected to offer operators access to lines to install their own high-speed digital subscriber line (DSL) equipment, following the launch in April 2000 of its own high-speed Internet access.

Oftel is in talks with BT about amending BT's licence to ensure that effective access doesn't suffer the delays experienced under the calls and access provisions.