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Oftel set to ease BT price curbs

The telecoms industry regulator Don Cruickshank will today announce an easing of price controls over BT but the two sides may still be on a collision course over his plans to clamp down on anti-competitive behaviour.

Mr Cruickshank is expected to propose abolishing controls on the prices charged to large business customers and relax the limits on how much domestic bills can be increased by.

But he is likely to insist that the new price control formula is "indivisible" from general powers he is seeking to curb any anti-competitive behaviour by BT as the market is deregulated.

BT will be referred automatically to the Monopolies and Mergers Commission if it refuses to agree to a new anti-competitive clause being written into its licence.

BT is presently not allowed to raise charges by more than inflation less 7.5 percentage points. In March, Mr Cruickshank proposed price rises should be capped at RPI less 5-9 per cent for the four years from July 1997. At the top end of the range that would have cut the average domestic bill by pounds 50 a year.

He is thought to have been persuaded by industry-wide representations that to set the price cap so tightly would prevent rival operators entering the market, thereby stifling competition.