View from City Road: BT hopes for a break in the logjam

AT&T's attempt to break into the UK telecoms market may look like bad news for BT. The US giant would be a serious rival. It has a well known name, and would target just the lucrative business customers that BT spends so much time wooing back from its main rival, Mercury.

But BT insiders are surprisingly not worried, and hope that the transatlantic regulatory logjam will now be broken.

BT's application for an international licence has been blocked by the Federal Communications Commission while AT&T is blocked from the UK by the DTI. .

The DTI may feel justified in sticking to its guns and refusing to allow full UK-to-US telephone competition, but it should ask itself whether this is doing BT or its customers any favours. Someone somewhere needs to break the stalemate.

The other consideration is the development of more competition in Britain. AT&T, if thwarted in its desire for an international UK licence, may not be keen to forge ahead with a UK domestic service. That may of course be a good thing for BT and Mercury, but it is hardly in the interests of consumers or in the spirit of competition beloved of this government.

The DTI says that all licence applications are viewed 'positively', but that would certainly ring hollow in the ears of United States Sprint, which has been waiting to become a telephone operator in Britain for well over a year.