Ref:11/02
Date: 20 February 2002

A cut in BT’s wholesale unmetered Internet access prices has been proposed today by Oftel.

The seven per cent cut is based on detailed information on BT’s costs for providing wholesale unmetered Internet access to other operators under the FRIACO arrangements.

Announcing a review of BT’s FRIACO charges, David Edmonds Director General of Telecommunications said:

"Up until now, BT’s FRIACO charges to other operators to provide wholesale unmetered Internet access have been based upon cost estimates.

"Now that FRIACO has been used for some time, Oftel has sufficient data to make an accurate calculation of BT’s costs and the appropriate wholesale price.

"Oftel believes that there is room for a seven per cent cut in BT’s wholesale charge for unmetered Internet access, and operators should ultimately be able to pass some or all of this saving on to their customers.

"Cuts in BT’s charges for FRIACO will mean UK consumers will continue to enjoy some of the cheapest prices in Europe for Internet access."

The consultation period runs until 19 March. A final decision will be announced in the Spring.

Notes to Editors

1. Consultation on Review of Adjustment Ratio for DLE FRIACO is available on Oftel's website at www.oftel.gov.uk/publications/internet/fria0202.htm. Hard copies are available to the media from Oftel's Press Office on 020 7634 8991 and to the public from Oftel's Research and Information Unit on 020 7634 8761.

2. The consultation only considers the costs for DLE FRIACO, not Single Tandem (ST) FRIACO, as this has only been available since February 2001 and there isn’t sufficient data.

3. A further review, considering ST and DLE FRIACO will commence in Autumn 2002.

4. Oftel has published several other documents relating to FRIACO. These are all available on Oftel’s website at: http://www.oftel.gov.uk/publications/internet/