Ref: 17/03
Date: 4 April 2003

Prices for unmetered Internet access for consumers could fall under proposals from Oftel to require BT to cut its wholesale unmetered Internet access prices.

Oftel believes that BT should cut its wholesale charges by 17 per cent because it is charging operators for certain call routing and call management measures that Oftel believes are no longer technically necessary.

If implemented, BT would have to backdate the refund to December 2001, the date from when the additional call routing and call management measures were no longer needed.

David Edmonds, Director General of Telecommunications said today:

"When Oftel required BT to introduce a wholesale unmetered Internet access product, BT introduced a number of additional measures to support the new service and which were included in the charge to other operators.

"These covered procedures to route Internet calls through to the appropriate service provider and call management measures to protect BT’s network from being overloaded by unmetered Internet traffic.

"BT has since made a number of improvements to its network, which means the Internet calls traffic can be processed without the additional measures

"I propose to order BT to reduce its wholesale unmetered Internet access prices by 17 per cent, which represents the costs of the now unnecessary measures . These savings could be passed on by other operators to their customers.

"Because BT made improvements to its network by December 2001, I intend to require BT to backdate the refund to other operators to this date.

"Oftel’s action will ensure that operators and consumers pay a fair price for unmetered Internet access from BT, and reflects the relevant costs that BT incurs to provide this service."

Notes to Editors:

1. A copy of the draft Direction has been published on Oftel’s website at www.oftel.gov.uk/publications/internet/2003/friaco0403. Hard copies are available to the media from Oftel’s press office on 020-7634 8991 and to the public from the Research and Information Unit on 020-7634 8761.

2. This investigation was opened following a complaint from Cable & Wireless, which was later supported by Energis.