Ref: 54/01

Oftel announced today that it has begun its review of the effectiveness of competition in the fixed telephony market in order to establish whether controls on BT's retail prices should be continued after 2002.

If Oftel finds that competition is effective in the fixed telephony market, price controls may no longer be necessary after July 2002 when current controls end.

However, if Oftel concludes that competition is not fully effective, continued price controls or other measures to assist competition may be required.

The issues on which Oftel is seeking views are contained in its consultation document ‘Competition in the provision of fixed telephony services’ published today.

Anne Lambert, Oftel’sDirector Of Operations, said today:

"Price controls on BT have been necessary to protect consumers because the telephony market is not yet effectively competitive.

"Competition continues to grow through the increasing availability to consumers of cable operators and indirect access operators, who are now able to offer carrier pre-selection services.

"Oftel will assess whether this increased competition is sufficient to protect consumers or whether continued price controls or additional measures to promote competition are needed when the current retail price controls expire in July 2002 .

Oftel will consult with consumer groups and the industry before a final decision is made next year."

Oftel will publish a follow up consultative document setting out its proposals by the end of the year, and this will be followed by a statement with final proposals by June 2002.

Notes to Editors

1. ‘Competition in the provision of fixed telephony services’ is available from Oftel’s website at www.oftel.gov.uk/publications/pricing/pcr0701.htm . Hard copies are available to the media from the Press Office by calling 020-7634 8991 and to the public from the Research & Intelligence Unit on 020-7634 8761.

2. The document only deals with BT Retail Price controls. Details of BT’s Network Charge Controls, which have been extended from October 2001 for a further 4 years, are available in the statement ‘Proposals for Network Charge and Retail Price Controls from 2001’ published February 2001.