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By Joey Gardiner, 31 May 2000 00:25

NEWS Industry has heralded Oftel's ruling - to force BT to offer its competitors wholesale Internet access tariff - as the most important UK Web development for years. Leading figures and commentators claim the telecoms watchdog's move could lead to significantly cheaper Internet access for consumers. Matthew Peacock, director of corporate communications at AOL, said the ruling changed the landscape of the UK's Internet industry. He said: "Consumers in this country will now have the most affordable flat rate access in the world, meaning the UK can truly be at the forefront of the European ecommerce revolution. It is up to BT now to deliver on what the regulator has ordered." On Friday Oftel ruled BT must offer an unmetered wholesale Internet tariff to other telecoms providers and ISPs, based on cost price. In practical terms, this means leasing a 64kps line to its competitors for £425 a year. The service - called FRIACO (Flat Rate Internet Access Call Origination) - is the first of its kind in the world. Oftel's ruling came in response to a complaint by MCI Worldcom, and will come into effect from 1 June. BT fought the decision, but now says it will comply with the ruling. A spokesman for Telewest said the decision raised many opportunities. He said: "As we look to the future, we are delighted to see the price of Internet access coming down and down." Daniel Bieler, Internet analyst at investment bank Nomura, said the move was the most significant step in telecoms deregulation so far. "This will intensify competition quite dramatically - it now puts BT and all of its competitors in the same position. However, consumers won't see the benefits immediately - vendors like to hang on to their profit margins for as long as they can," Bieler said. Sarah Skinner, European Internet analyst at research house Durlacher, said BT's previous offerings had been poor. "Industry has been scathing about BT's unmetered rates so far but, this is likely to be very significant."