Brussels set to clear BT merger

The European Commission is today expected to clear British Telecom's planned pounds 13bn merger with MCI of the US, subject to agreeing limited undertakings from the group. The EC is thought likely to ask BT to reinforce the transparency of pricing for rival operators using its transatlantic phone cables and ask the two companies to divest MCI's audio-conferencing business in the UK. BT and MCI are still waiting for the US regulator, the Federal Communications Commission, to pass judgement on the deal.

Separately, British Telecom faced another dispute with the telephones watchdog, Oftel, yesterday over the prices other operators charge to run calls over its network. Don Cruickshank, the regulator, published price controls which would cut these wholesale charges by 10 per cent to 20 per cent from October and between 6 and 12 per cent each year until 2001.

Oftel estimated the reduction in the autumn would hit BT's revenues by around pounds 30m. Network charges, paid by other phone companies, account for about pounds 1bn of BT's pounds 12bn annual operating costs. Mr Cruickshank insisted the price controls, to be confirmed in July, were no tougher than the existing regime. BT said if the controls were at the top of the range they could threaten investment in the network.