By Ron Coates, 15 April 2004 17:00
NEWS All-optic broadband supplier Vtesse has reported BT to the EC as receiving an 'illegal subsidy', as the rates on its network are calculated in a different way to those of its competitors.
Aidan Paul, Vtesse's CEO, said: "It's unfair. They use one valuation for charging out their lines and another when it comes to paying their rates. And what the Valuation Office does is illegal under EU law and under British law we've complained for a long time and nothing's happened."
Vtesse complains that BT paid rates on its telecoms network of around £250m last year and that, if it had to pay rates on the same terms as its competitors, the bill should be around £1.3bn.
The BT rates formula was established nine years ago in an out-of-court settlement with the Valuation Office Agency, an offshoot of the Treasury. The agency has admitted that the BT formula is different from the rental-based formula applied to other carriers.
A BT spokesman said that the company was unaware of any EC investigation and that its arrangements on rates were "completely above board".
An EC spokesman said that the complaint had been received and, according to procedure, had been sent to the UK government for comment. The Office of the Deputy Prime Minister, responsible for business rates matters, is considering its response.
Vtesse is also pursuing a case on its rates valuation through the a legal appeals procedure. Paul expects the case to go to tribunal and on to the High Court. "They're stalling everyone's known about this for years. The rating office admits that it makes it up as it goes along," he said.
The company had a complaint against BT for 'predatory pricing' on its Wavestream Metro and Connect National products dismissed by now-defunct regulator Oftel late last year.
Comments
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1. anonymous
The quickest way to get this turned into a level playing field is for BT's competitors to pay rates calculated the same way as BT?
2. anonymous
Go on - bash BT again. People cannot accept successful companies so will do anything to bash the. I'm sure all the complainants would, if in the position BT is in, do everything they could to retain market share.
3. Ian Manzie
As a Brit living and working in both France and Britain I make 2 observations:
1. The situation in France seems to be far worse with many of the large companies in state control and favoured!
2. Small players in the UK seem to spend time and resources fighting and moaning about companies like BT rather than getting on and offering a service. BT does need a level of 'assistance' to maintain its left profitable parts and its universal service obligations
4. royston
why is it a "flank attack" looks direct on the nose to me. if anything its bt thats pulled the flanker.and how come the government is slower than bt for once. its the government that should be critisised heavily for aloweing this in the first place.mind you from a home users point of view bt/government are the same thing bt has the power to pull the wool over the governments eyes for a long time so this is nothing new.microsoft get fined for unfair competition all over the world and bt is the uk,s microsoft in comparison.bet bt win this one with a little help from the government. the uk does this with a lot of issues not just in telephony. anything for more cash in the coffers.
5. Anony Mouse
Wot, us 'bash BT'?! Pulease! I'm all for success - personal and corporate. However, I'm dead against the £1millon/minute profiteering that BT is engaged in, while still getting gov't subsidies at the taxpayers expense and protection from competition by the BT lapdog we laughingly call Ofcom.