ISPs cheer Oftel for tackling leased line prices

NEWS UK telecoms watchdog Oftel has condemned BT for abusing its dominant position to keep wholesale leased line prices artificially high, a decision applauded by internet service providers and end users alike. Anne Lambert, director of operations at Oftel, told silicon.com: "UK leased line prices are much higher than in the US and some European countries. In order to compete effectively we need to look at BT's pricing structure and bring the competition to a healthy level." She continued: "Our investigation shows the main problem is in the wholesale market and we need to propose regulation to address this. The most likely solution will be some sort of pricing control." The conclusion comes after a nine-month investigation into BT's leased line market and precedes a consultation period, which will finish by the end of November. Claire Gilbert, chairman of the Internet Service Providers Association (Ispa), praised Oftel's decision, saying regulation is long overdue: "We have been asking for regulation [on leased line pricing] for at least five years because it is vital for the ISP market to thrive." Laurence Blackall, Ispa member and president of Concentric Network, added: "Until now Oftel has not been taking complaints about BT's pricing and delivery of leased lines seriously. All ISPs are enormously dependent on BT, but with no adequate regulation we are waiting for Oftel to make BT behave." Derek Nicholas, member of the competition and market special interest group at the Telecommunications Managers' Association (TMA), also welcomed the news: "Oftel has finally discovered there are problems in this market. This is a first step to trying to understand those problems and to take some action in order to open it up for healthy competition." "Distortion in the market is not only in the wholesale arena, but also in retail sale prices. When the leased line is bought directly from BT there is a need for a pricing correction too," he added. BT was unavailable for comment.