Oftel tells BT to cut internet access charges for rivals

The telecoms watchdog Oftel yesterday paved the way for a cut in the price of high-speed internet access for business customers by proposing BT slashes its prices.

The regulator is proposing BT cuts the connection charges for so-called partial private circuits (PPCs), which enable rival telecoms operators to offer services to their customers over the BT network, by 50 per cent. Rental charges, it is suggesting, should be cut by 30 per cent.

David Edmonds, the director-general of telecommunications, said the proposals would allow "real price competition in broadband services for businesses" and urged BT's rivals to pass on price cuts to their business customers.

The planned cuts, which are the result of an Oftel inquiry into the leased line market, will be backdated to 1 August 2001, when the products were first introduced by BT.

A spokesman for BT said the company was "a bit disappointed" by the move but noted that it was "no great surprise". BT has until early October to respond and a final Oftel ruling is slated for November.

"The proposals are the result of a detailed investigation of the leased line market which found that BT's wholesale charges for leased line services are too high and that these prices should be reduced to reflect costs," Mr Edmonds said.

It is thought the move could cut BT's sales by around £20m to £30m a year. The product currently generates around £100m of sales a year for BT.

Its rivals welcomed the plans. "These latest proposals provide yet more evidence to support our view that BT has continued to use its monopoly position to distort the market to the detriment of end users and other operators," the chief operating officer of the telecoms group Thus, Phil Male said.

Oftel also yesterday proposed improvements to BT's service-level agreements for the provision of PPCs.