BT avoids break-up :: UK Broadband Usergroup :: Serving the broadband community

BT avoids break-up

Posted by: eusty on Thursday, June 23, 2005 - 11:35 AM

As widely expected industry regulator Ofcom is not going to demand the break-up of BT group.

The results of the review into BT's handling of it's operations stopped short of the regulator demanding a full Enterprise Act investigation, this many feel would have meant the total break-up of BT as we know it into smaller units.
The key to the demands is 'market equivalence', rivals claim BT has an unfair advantage as it already has access to exchanges while making it very difficult for operators to install alternative equipment in them.

BT has agreed in principle to Ofcoms demands, but will officially reveal it's detailed actions to these on June 30th.

The six objectives insisted on by Ofcom are:-

to drive down the price of calls, connections and services for consumers and businesses;
to support more innovation through the growth of competitive products and services, such as faster broadband, television and voice over the internet and video-on-demand, from a range of credible companies;
to provide regulatory certainty for providers and investors so that they commit to developing, marketing and extending these products and services for UK consumers and businesses;
to re-focus regulation where it is truly needed, with swifter remedies to tackle anti-competitive behaviour and a structure which delivers equivalence to a timetable with real penalties and incentives;
to remove regulation wherever competition is effective and the effect of open markets - rather than regulatory intervention - ensures the delivery of choice, value and quality for consumers; and
ensure the necessary level of consumer protection through a combination of codes, sanctions and effective consumer information.

BT as usual put a brave face on the news stating that it is willing to co-operate with any regulations, although mot people know is is only done rrudgingly

"This has been a meticulous process during which BT has engaged in depth with Ofcom and the industry. We came up with bold proposals in February that reflected the reality of the market and we have now committed to a framework to ensure others have confidence in the settlement."
"It is time to draw a line under twenty years of micro-regulation and to welcome a new era where regulation is focused where needed and rolled back elsewhere."

Ben Verwaayen, BT chief executive

As a footnote, BT have decided today to reduce it's charges for the rental for its fully unbundled local loop product from £105 per annum to £80 with effect from August 1, 2005. Great timing by BT as usual!

The full review can be found at Ofcom.