Oftel in favour of BT reference

OFTEL, the telecommunications industry watchdog, would welcome a reference of BT to the Monopolies and Mergers Commission on the ability of other telephone companies to gain access to BT's network.

This issue falls outside the tough new price control package, based on limiting price increases to inflation minus 7.5 percentage points, that BT is expected to agree this week.

But other important bones of contention between Oftel and BT are still outstanding. Of particular interest is the ease with which other telephone companies can connect their calls to BT's network and the price BT should be able to charge for the service.

Over the next few months Oftel will investigate complaints from other telecommunications operators which say that BT's network configuration makes it awkward for them to use.

At the same time the watchdog is to decide exactly how BT must separate its local and national operations in accounting terms.

By making BT's accounting more 'transparent' the aim is to make it as fair as possible for other companies to use the BT network to deliver their calls.

Plans for this increased accounting disclosure, which has particularly angered BT, were announced in June in conjunction with the 'RPI minus 7.5' cap.

Bill Wigglesworth, director-general of Oftel, believes that, as the regulator's decisions affect BT's ability to compete, a reference would clear the air. BT has clashed repeatedly with Oftel in recent months and is expected to do so again over the problems concerning interconnection.

Mercury, the Cable & Wireless subsidiary and BT's main rival, applied to Oftel last month for better terms in its interconnect agreement with BT. Previous deals between the companies have been hard fought and required intervention by the regulator.

The prospect of an MMC reference of BT has been given more weight by the recent decision by British Gas to ask for a reference by the Secretary of State for Trade and Industry.

The company decided that an MMC investigation was worth the risk after lengthy and fractious negotiations with its regulator.

In a similar case to BT's, these talks were concerned with how competing companies should be allowed to use British Gas's pipes and how much it could charge.