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31|03|04

Ofcom launches Competition Act investigation into new BT retail tariff packages for line rental and calls

Ofcom today announced it had opened an own-initiative investigation under Chapter II of the Competition Act into BT's new residential retail tariff packages for line rental and calls, the first of which BT intends to introduce on 1 April 2004.

The investigation will examine whether the introduction of BT's new retail tariff packages constitutes an abuse of a dominant position under the Competition Act 1998.

Ofcom has received representations from 13 stakeholders including other operators who compete with BT in the provision of voice calls in the residential market by offering consumers a Carrier Pre-Select (CPS) service. These CPS operators need to route calls over BT's network using a wholesale service provided by BT. To date almost three million UK households have switched from BT to the services provided by CPS operators.

The CPS operators have raised concerns that BT's retail tariff packages for line rental and calls, when combined with the wholesale price that they must pay BT for call conveyance, will distort competition in the provision of residential calls.

Under section 25 of the Competition Act, Ofcom may conduct an investigation if there are reasonable grounds for suspecting that the Chapter II prohibition has been infringed. As a matter of urgency, Ofcom is considering the case for seeking interim measures under the Competition Act. If Ofcom concludes that there is a case for the interim measures, the options available would include a requirement upon BT to cease or reverse the proposed new tariffs. Ofcom expects to reach a conclusion on whether interim measures are appropriate within the next four weeks.

The relevant Competition Bulletin can be found at http://www.ofcom.org.uk/bulletins/comp_bull_index/
comp_bull_ocases/open_all/cw007/

Ends.

Notes for editors and CSEs

Ofcom is the independent regulator for the UK communications industries, with responsibilities across television, radio, telecommunications and wireless communications services.

Our duties include:

• The promotion of choice, quality and value in electronic communications services, where appropriate by encouraging competition between the providers of those services
• Ensuring the most efficient use of the radiocommunications spectrum – the airwaves used for the transmission of all non-military wireless communications services
• Ensuring a wide range of electronic communications services, including broadband, is available across the UK
• Ensuring a wide range of TV and radio programmes of high quality and wide appeal
• Maintaining plurality in the media by ensuring a sufficiently broad range of ownership
• The protection of audiences against offensive or harmful material, unfairness or the infringement of privacy on TV and radio

For further details please visit www.ofcom.org.uk.

Contact

Ofcom Media Office
mediaoffice@ofcom.org.uk
(+44) (0)20 7981 3033

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