Oftel seeks ways to curb BT price cuts

Oftel, the telecommunications regulator, is seeking wide new powers to prevent BT from behaving in anti-competitive ways and in particular from cutting prices in ways that could push rivals out of the marketplace. The regulator is concerned that BT couldin future use cross-subsidy to price some services below cost.

Don Cruickshank, director-general of Oftel, also said he wanted more powers to obtain information on BT's individual businesses, in order to ensure that cross-subsidy cannot be hidden. He said that if necessary, this could mean forcing BT to split into separate businesses rather than just publishing separate accounts.

Speaking at a London conference, Mr Cruickshank said: "I would not be performing my role effectively if I allowed a situation to develop where anti-competitive behaviour by BT is either not discoverable or that I do not have adequate means to stop it promptly."

The wider powers proposed by Mr Cruickshank would mean a change to BT's licence, to which the company must agree or face a reference to the Monopolies Commission.

Oftel said that the changes, part of a comprehensive consultation on the future of the industry, would not take effect until after July 1997, the expiry date for BT's current price cap.

Mr Cruickshank also promised more "scrutiny and challenge" in assessing pricing and related behaviour, adding: "We can use more effectively the powers under the Competition Act and Fair Trading Act. Indeed, I expect that you will see the first use of these powers by the director general of telecommunications in the very near future."

Mr Cruickshank's statement shocked BT, which has already agreed that it will publish separate accounts to increase transparency. Accounting separation is regarded by Oftel as a key part of ensuring that other companies, including Mercury and cable television firms, can interconnect on fair terms to BT's wires to deliver service to customers.

BT said: "The full range of unfettered discretionary powers now being sought by Oftel ... go substantially further than is required to achieve accounting separation.

"They are much more extensive than anything to which BT has previously consented, in agreeing amendments to its licence. Wide discretionary powers, by their nature, introduce uncertainty and unpredictablity into the regulatory regime. This is not in the interest of customers, shareholders or competitors."

BT also came under fire from the regulator for failing to take part openly in its consultation on accounting separation, preferring to discuss the issues with Oftel in private. Mr Cruickshank said: "The result has been a lack of transparency, a lack of understanding by the rest of the industry of what BT's position is, and frankly the suspicion of Oftel/BT in a closed room."

A model of a Neanderthal man on display at the National Museum of Prehistory in Dordogne, France
Richard Dawkins dedicated his book 'The Greatest Show on Earth' to Josh Timonen
newsThat's Richard Dawkins on babies with Down Syndrome
Arts and Entertainment
Eye of the beholder? 'Concrete lasagne' Preston bus station
architectureWhich monstrosities should be nominated for the Dead Prize?
ebooksAn evocation of the conflict through the eyes of those who lived through it
Dinosaurs Unleashed at the Eden Project
Arts and Entertainment
Life and Style
This month marks the 20th anniversary of the first online sale
techDespite a host of other online auction sites and fierce competition from Amazon, eBay is still the most popular e-commerce site in the UK
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Quantitative Analyst (Financial Services, Graduate, SQL, VBA)

£45000 per annum: Harrington Starr: Quantitative Analyst (Financial Services, ...

Application Support Engineer (C++, .NET, VB, Perl, Bash, SQL)

Negotiable: Harrington Starr: Application Support Engineer (C++, .NET, VB, Per...

AIFMD Business Analyst / Consultant - Investment Management

£450 - £600 per day: Harrington Starr: AIFMD Business Analyst / Consultant - I...

Business Analyst Solvency II SME (Pillar 1, 2 & 3) Insurance

£450 - £600 per day: Harrington Starr: Business Analyst Solvency II SME (Pilla...

Day In a Page

Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape
eBay's enduring appeal: Online auction site is still the UK's most popular e-commerce retailer

eBay's enduring appeal

The online auction site is still the UK's most popular e-commerce site
Culture Minister Ed Vaizey: ‘lack of ethnic minority and black faces on TV is weird’

'Lack of ethnic minority and black faces on TV is weird'

Culture Minister Ed Vaizey calls for immediate action to address the problem
Artist Olafur Eliasson's latest large-scale works are inspired by the paintings of JMW Turner

Magic circles: Artist Olafur Eliasson

Eliasson's works will go alongside a new exhibition of JMW Turner at Tate Britain. He tells Jay Merrick why the paintings of his hero are ripe for reinvention
Josephine Dickinson: 'A cochlear implant helped me to discover a new world of sound'

Josephine Dickinson: 'How I discovered a new world of sound'

After going deaf as a child, musician and poet Josephine Dickinson made do with a hearing aid for five decades. Then she had a cochlear implant - and everything changed
Greggs Google fail: Was the bakery's response to its logo mishap a stroke of marketing genius?

Greggs gives lesson in crisis management

After a mishap with their logo, high street staple Greggs went viral this week. But, as Simon Usborne discovers, their social media response was anything but half baked
Matthew McConaughey has been singing the praises of bumbags (shame he doesn't know how to wear one)

Matthew McConaughey sings the praises of bumbags

Shame he doesn't know how to wear one. Harriet Walker explains the dos and don'ts of fanny packs
7 best quadcopters and drones

Flying fun: 7 best quadcopters and drones

From state of the art devices with stabilised cameras to mini gadgets that can soar around the home, we take some flying objects for a spin
Joey Barton: ‘I’ve been guilty of getting a bit irate’

Joey Barton: ‘I’ve been guilty of getting a bit irate’

The midfielder returned to the Premier League after two years last weekend. The controversial character had much to discuss after his first game back
Andy Murray: I quit while I’m ahead too often

Andy Murray: I quit while I’m ahead too often

British No 1 knows his consistency as well as his fitness needs working on as he prepares for the US Open after a ‘very, very up and down’ year
Ferguson: In the heartlands of America, a descent into madness

A descent into madness in America's heartlands

David Usborne arrived in Ferguson, Missouri to be greeted by a scene more redolent of Gaza and Afghanistan
BBC’s filming of raid at Sir Cliff’s home ‘may be result of corruption’

BBC faces corruption allegation over its Sir Cliff police raid coverage

Reporter’s relationship with police under scrutiny as DG is summoned by MPs to explain extensive live broadcast of swoop on singer’s home