Ofcom to tackle BT bias

The regulator's strategic review could result in better service for non-BT broadband customers

Martin Courtney, IT Week 22 Nov 2004

Despite years of efforts to foster fair competition in UK broadband provision, telecoms regulator Ofcom last week ruled that BT's retail arm still enjoys unfair advantages. The watchdog outlined tough new measures that would require BT "to allow its competitors to gain genuinely equal access to its networks".

However, Ofcom appeared to reject full deregulation or an investigation of BT under the Competition Commission in its report on phase two of the Strategic Telecommunications Review.

The watchdog indicated it may review regulation of the fixed-line voice and leased line markets, which could make it easier for rival carriers and service providers to offer a range of better value, converged voice and data packages to large corporate customers.

Ofcom's intention is to force BT to give rivals access to its local loop network on a basis "truly equivalent" to that enjoyed by BT's own retail operation. The move should result in rival carriers being able to offer customers the same levels of service and quality available to BT's broadband subscribers, thus addressing a long-standing source of contention.

"It is often perceived that BT's competitors are better on price but poorer on service," said Serafine Abate of analyst Ovum. "The equivalence proposal should make sure that if BT provides a 24-hour fix to its own customers, it should do the same for those of alternative operators."

Richard Sweet of carrier Thus said rivals would only be able to compete with BT in the broadband market when they can offer parity in terms of service.

Ovum's Abate said, "There has been an attempt to get prices the same, but the terms and conditions and service level agreements are often not identical. The idea of equivalence is to make them all the same."

Ovum believes that the report finally buries the idea that BT should be split up, but others said Ofcom would retain the option. Thus's Sweet said, "Ofcom is retaining the nuclear option of referral under the Enterprise Act and potential breakup of BT to keep some leverage over it [BT]."

Ofcom has also published consumer research that suggests few broadband subscribers switch suppliers, a trend it hopes to change by simplifying the migration process. It also wants improvements in the accuracy and availability of information to help users select providers.

Ofcom is set to confirm its intentions in February, publish proposals in spring and oversee implementation later next year. BT chief executive Ben Verwaayen said regulatory certainty would encourage investment and innovation. "We will engage constructively with Ofcom and the industry during the final phase of the strategic review."

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