Ref: 40/00
26 May 2000

Oftel has today required BT to provide the necessary services to enable other operators to supply unmetered Internet access over BT’s local network.

Oftel has made a Direction to resolve an interconnection dispute between BT and MCI Worldcom.

MCI Worldcom had requested that BT supply it with a wholesale unmetered Internet access service from the customer’s home. BT refused, and was only prepared to offer a metered service.

Under the Direction issued today, BT must agree to offer a wholesale unmetered Internet access service to MCI Worldcom and other operators who request it by no later than 1 June 2000.

The service is known as FRIACO – Flat Rate Internet Access Call Origination. BT is also required to provide conveyance of this traffic to the competing operator’s network.

Oftel’s decision means that other operators will be able to provide unmetered Internet access to consumers in competition to BT’s own unmetered Internet access known as Surftime.

David Edmonds, Director General of Telecommunications said today:

"Although the UK has some of the cheapest Internet access on offer for residential consumers, Oftel wants to see more low cost Internet access available, with a choice of tariff packages. We have been working to encourage a range of tariffs, including unmetered access for heavy users of the Internet.

"We have welcomed BT’s plans to launch Surftime, which will offer consumers both low cost pay-as-you-go Internet access and unmetered, or flat rate, tariffs. It is vital for the UK’s vibrant Internet market that other operators and ISPs can compete fairly and offer similar products to their own customers.

"Oftel’s decision will enable other operators and ISPs to offer competing unmetered Internet access using BT’s local network. I am pleased that BT and the other operators and ISPs have worked hard over recent weeks to resolve the technical arrangements."

Oftel has outlined a programme of further work to develop regulatory certainty in relation to Internet access issues. Later this year Oftel will also carry out a major review of access to the Internet, to assess the level of competition and regulation to ensure consumers get the best deal possible.

Notes to Editors

1. A copy of the Direction and accompanying explanatory document can be found on Oftel’s website at www.oftel.gov.uk.

2. Oftel’s Direction is made under Condition 45 of BT’s licence. Condition 45 requires BT to enter into an interconnection agreement with another operator so to meet reasonable demand. The Direction resolves an interconnection dispute referred to Oftel by MCI Worldcom. The price of FRIACO will be £424.25 for each 64kb of capacity.

3. In accordance with Oftel’s usual regulatory approach, the Direction requires BT to provide a wholesale service in which it has a dominant position to operators in the retail market who require that service in order to compete with BT’s retail products.

4. BT Surftime, due to be launched on 1 June, is a retail product which offers a range of tariffs including low cost pay-as-you go Internet access and unmetered packages. Both Surftime and FRIACO products are based on the narrowband or "dial up" Internet access. They do not concern broadband technologies such as ADSL.

5. There also need to be means of conveyance of traffic from the local exchange to the other operator’s network. There have also been extensive discussions between the industry and BT on the technical arrangements for this.