Oftel powers over BT on increase

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The Independent Online
Oftel, the telecommunications regulator, is expected to take on stronger powers to prevent anti-competitive behaviour by BT following a wide-ranging consultation on the future of the industry.

The powers will stop short of the ability to impose fines on BT, a solution favoured by the company's rivals, because this is precluded under UK competition law.

Perceived deficiencies in competition law have emerged in the consultation as one of the biggest issues facing the telecommunications industry.

It will be highlighted in Oftel's report on the future of the sector, to be publshed in July, and will increase pressure on the Government to legislate to bring Britain more in line with other countries around the world.

Under the present system, Oftel can investigate alleged anti-competitive behaviour by BT and then make an order prohibiting such actions again.

This can take months, and only if an order is breached can aggrieved parties seek redress through the courts.

Oftel is expected to seek amendments to BT's licence to allow much swifter action. Should BT fail to agree, the matter would be referred to the Monopolies and Mergers Commission. The changes would be expected to go hand in hand with relaxation of specific restrictions on BT, including a price cap that keeps changes in line rentals to inflation plus two percentage points.

Oftel's concern coincides with an inquiry by the Trade and Industry Select Committee into competition policy in the UK. The committee's report, due in mid-May, is expected to call for an overhaul of competition law.

In evidence to the Committee, Sir Bryan Carsberg, Director General of Fair Trading, launched a savage attack on the present system, calling for legal prohibition of anti-competitive practices and onerous financial penalties for firms that breach the rules, including utilities.

He also shocked the committee by saying Britain should have a single competition authority, scrapping the present system using the Office of Fair Trading and Monopolies and Mergers Commission, followed by a final decision by the Department of Trade and Industry.

The pressure for change comes as the Government prepares to announce a successor to Sir Bryan, who leaves the OFT on 19 May - more than two years before his five-year term was due to expire.