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
  • Get to the point
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

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Guru Careers: Pricing Analyst

£30 - 35k (DOE): Guru Careers: We are seeking a Pricing Analyst with experienc...

Ashdown Group: Treasury Assistant - Accounts Assistant - London, Old Street

£24000 - £26000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Sales Team Leader - Wakefield, West Yorkshire

£21000 - £24000 per annum: Ashdown Group: The Ashdown Group has been engaged b...

Day In a Page

Revealed: Why Mohammed Emwazi chose the 'safe option' of fighting for Isis, rather than following his friends to al-Shabaab in Somalia

Why Mohammed Emwazi chose Isis

His friends were betrayed and killed by al-Shabaab
'The solution can never be to impassively watch on while desperate people drown'
An open letter to David Cameron: Building fortress Europe has had deadly results

Open letter to David Cameron

Building the walls of fortress Europe has had deadly results
Tory candidates' tweets not as 'spontaneous' as they seem - you don't say!

You don't say!

Tory candidates' election tweets not as 'spontaneous' as they appear
Mubi: Netflix for people who want to stop just watching trash

So what is Mubi?

Netflix for people who want to stop just watching trash all the time
The impossible job: how to follow Kevin Spacey?

The hardest job in theatre?

How to follow Kevin Spacey
Armenian genocide: To continue to deny the truth of this mass human cruelty is close to a criminal lie

Armenian genocide and the 'good Turks'

To continue to deny the truth of this mass human cruelty is close to a criminal lie
Lou Reed: The truth about the singer's upbringing beyond the biographers' and memoirists' myths

'Lou needed care, but what he got was ECT'

The truth about the singer's upbringing beyond
Migrant boat disaster: This human tragedy has been brewing for four years and EU states can't say they were not warned

This human tragedy has been brewing for years

EU states can't say they were not warned
Women's sportswear: From tackling a marathon to a jog in the park, the right kit can help

Women's sportswear

From tackling a marathon to a jog in the park, the right kit can help
Hillary Clinton's outfits will be as important as her policies in her presidential bid

Clinton's clothes

Like it or not, her outfits will be as important as her policies
NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders