Oftel pulls the plug on Internet plans

British Telecom's interim proposals to wire up schools to the information superhighway over the coming weeks were yesterday overturned by the industry watchdog, Oftel, over fears that they were anti-competitive, writes Cathy Newman.

Don Cruickshank, Oftel's director-general, said yesterday that he had rejected BT's immediate plans as the telecoms giant had pledged only to use its own network. Mr Cruickshank said such a "BT-specific deal" - which would mean schools would not be able to access services offered by around 90 per cent of Internet service providers - was "just not on".

He said he would be writing to BT to lay out his objections. Mr Cruickshank added: "An awful lot of companies out there want to make a contribution here. BT must provide open access to other providers."

He also hit out at BT's delay in coming forward with proposals, when the cable companies had already begun to offer schools free Internet connection and limited usage for pounds 1 per pupil each year. "I wrote to Sir Peter Bonfield [BT's chief executive] in December, January, February and March asking for the proposals." Mr Cruickshank indicated that the delay made it unlikely that schools would have the technology in place in time for the start of the new school year in September.

A spokeswoman for BT said the company was "very disappointed" that its interim plans had not met with Oftel's approval. She added that BT's long- term proposals - which would give all providers open access - would not be ready until after an industry consultation. These proposals would offer packages of Internet and e-mail access at various prices which would compete with cable companies, BT said.

The Government had originally proposed that BT would get an early end to the ban on broadcasting entertainment down its phone network in return for wiring schools up to the superhighway. However, Oftel recently said that BT should connect schools to the Internet regardless of whether it was permitted to become a broadcaster.