NEWS Ofcom has announced a Competition Act investigation into BT's new charges for line rentals and calls.
The watchdog acted after complaints by 13 stakeholders including other operators. The other operators are concerned that the increase in charges for line rental will squeeze their margins and make them less competitive.
Ofcom said it is considering "as a matter of urgency" the case for seeking interim measures under the Competition Act. It promised to rule within four weeks as to whether BT had broken the rules aimed at stopping it abusing its dominant position in the fixed-line phone market.
Pierre Danon, CEO of BT Retail, said in a statement: "We are extremely confident that our new customer propositions are wholly in line with our legal and regulatory obligations."
He also promised to co-operate with the investigation.
The regulator pointed out that almost three million households have switched to CPS (carrier pre-select) services, under which they pay BT line rental but pay another company for their calls.
The new BT tariff moves all household accounts to its cheaper call rates, but boosts line rentals by £1 a month.
Comments
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1. anonymous
If I have ADSL, can I have the option of paying a smaller line rental if I dont want to do local calls on the line?
2. Graham
No, because the cost of keeping the copper working doesn't decrease just because you don't use it for voice calls.
3. Troy
Poor BT, it's in a no-win situation. If it keeps it's prices high it's accused of charging too much. If BT drops its prices it is accused of anti-competitive practices.
4. anonymous
BT's action looks to me like a direct exploitation of its de facto monopoly on the local loop. It's raising the fixed cost that everyone has to pay to have a landline at all, even if they prefer to make calls via other phone companies, and lowering the variable charge where it has competition.
5. Amir
"Poor BT, it's in a no-win situation. If it keeps it's prices high it's accused of charging too much. If BT drops its prices it is accused of anti-competitive practices."
Exactly its about time OFCOM which is proving as useless as OFTEL. Should seperate the local loop from BT. The local loop is a monopoly and a new company not controlling voice calls would want as much traffic as possible. The WLR product would be sold to all customers including BT itself. Because the company would be a monopoly the price should be fixed by OFCOM. Once this happens BT would not be accused of being anti-competitive. It's funny vertical integration needs to come about on the railways as the track is an important part of the the TOC. But the government won't do it. With BT vertical fragmentation is exactly what needs to happen. But yet BT is as vertical integrated as you can get. Isn't this illegal under the EU.
But like anything in this country just leave it as it is. So we can all poke our noses in and make maximum money. Thats the cronies at OFCOM and Notwork Rail etc... If the market was truly working then all the lawyers and consultance would lose their jobs. Nothing will change it never does. Just the government does a review of the railway OFCOM is doing a review of telecoms. But I bet it will not seperate the local loop from BT instead it will enforce even more restrictive practises worse than now. So we end up wuith BT this BT the other blah blah blah.