Vallance warns against wider powers for Oftel

MARY FAGAN

Industrial Correspondent

Sir Iain Vallance, BT's chairman, yesterday threw down the gauntlet to the authorities by delivering a powerful warning that he may not accept sweeping new anti-competitive powers being sought by Oftel, the industry regulator.

BT must accept the proposals by Don Cruickshank, director general of Oftel, or find itself in the hands of the Monopolies and Mergers Commission.

Speaking at a meeting of the Policy Studies Institute, Sir Iain said that Oftel's proposals would "stifle innovation, reduce BT's efficiency and add to consumers' costs". He added: "I am answerable to shareholders and customers. How can I be expected to go along with this?"

Sir Iain accused Mr Cruickshank of having "ambitions to become an untrammelled competition authority as well as a regulator", and of also wishing to be manager. He said that the watchdog had become increasingly preoccupied with driving down BT's market share at the expense of his other responsibilities.

Sir Iain, whose speech came within hours of Oftel's first public hearing on the issue, added: "It is my belief that the director general's current proposals presage a highly dangerous new form of regulation, with broad and undefined discretionary, or absolute, powers vested in a single individual."

Sir Iain, who argues that investors need more regulatory stability, added: "By entering the ring on the side of BT's competitors the referee is stepping outside his legitimate role and distorting competition in the marketplace."

The changes sought by Mr Cruickshank involve the creation of a single general condition in BT's licence and those of its rivals, which would enable him to deem what is anti-competitive behaviour and order it to stop while an investigation takes place.

At present a complex series of individual licence conditions relates to competition and he has no ability to stop alleged anti-competitive behaviour until the case is proven.

Speaking at his morning meeting, Mr Cruickshank said: "Too often in the past, regulation has been after the event. There is a tendency to try things until the regulator intervenes - to do something until stopped." His proposal would also allow damaged parties to bring legal action earlier if they have been proved hurt.

Mr Cruickshank added: "The telecommunications market is different from that in other goods and services in that it is still heavily dominated by one vertically integrated company."

Wayne Gowan, chairman of the Cable Communications Association, argued that the Oftel proposals did not go far enough. Professor John Kay, of the London Business School, said that in embracing a general anti-competitive approach, Oftel would be taking "absolutely the right way" ahead.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Executive - OTE £40,000

£15000 - £18000 per annum: Recruitment Genius: This is a great opportunity for...

Austen Lloyd: Law Costs HOD - Southampton

£50000 - £60000 per annum + Excellent Salary: Austen Lloyd: An outstanding new...

SThree: Recruitment Resourcer

£20000 - £21000 per annum + uncapped commission: SThree: As a graduate you are...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Day In a Page

Syrian conflict is the world's first 'climate change war', say scientists, but it won't be the last one

Climate change key in Syrian conflict

And it will trigger more war in future
How I outwitted the Gestapo

How I outwitted the Gestapo

My life as a Jew in wartime Berlin
The nation's favourite animal revealed

The nation's favourite animal revealed

Women like cuddly creatures whilst men like creepy-crawlies
Is this the way to get young people to vote?

Getting young people to vote

From #VOTESELFISH to Bite the Ballot
Poldark star Heida Reed: 'I don't think a single bodice gets ripped'

Poldark star Heida Reed

'I don't think a single bodice gets ripped'
The difference between America and Israel? There isn’t one

The difference between America and Israel? There isn’t one

Netanyahu knows he can get away with anything in America, says Robert Fisk
Families clubbing together to build their own affordable accommodation

Do It Yourself approach to securing a new house

Community land trusts marking a new trend for taking the initiative away from developers
Head of WWF UK: We didn’t send Cameron to the Arctic to see green ideas freeze

David Nussbaum: We didn’t send Cameron to the Arctic to see green ideas freeze

The head of WWF UK remains sanguine despite the Government’s failure to live up to its pledges on the environment
Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Author Kazuo Ishiguro on being inspired by shoot-outs and samurai

Set in a mythologised 5th-century Britain, ‘The Buried Giant’ is a strange beast
With money, corruption and drugs, this monk fears Buddhism in Thailand is a ‘poisoned fruit’

Money, corruption and drugs

The monk who fears Buddhism in Thailand is a ‘poisoned fruit’
America's first slavery museum established at Django Unchained plantation - 150 years after slavery outlawed

150 years after it was outlawed...

... America's first slavery museum is established in Louisiana
Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

Kelly Clarkson: How I snubbed Simon Cowell and become a Grammy-winning superstar

The first 'American Idol' winner on how she manages to remain her own woman – Jane Austen fascination and all
Tony Oursler on exploring our uneasy relationship with technology with his new show

You won't believe your eyes

Tony Oursler's new show explores our uneasy relationship with technology. He's one of a growing number of artists with that preoccupation
Ian Herbert: Peter Moores must go. He should never have been brought back to fail again

Moores must go. He should never have been brought back to fail again

The England coach leaves players to find solutions - which makes you wonder where he adds value, says Ian Herbert
War with Isis: Fears that the looming battle for Mosul will unleash 'a million refugees'

The battle for Mosul will unleash 'a million refugees'

Aid agencies prepare for vast exodus following planned Iraqi offensive against the Isis-held city, reports Patrick Cockburn