Ref: 24/03
Date: 7 May 2003

David Edmonds, Director General of Telecommunications, issued the following statement on BT’s decision to cut the prices of its wholesale broadband Datastream product, which is used by other operators to offer broadband connections to Internet service providers:

"Oftel has urgently investigated a complaint we received last month about BT’s recent price charges to its IPStream wholesale broadband product.

"Our initial findings were that these price changes, relative to the Datastream product, could have prevented other operators from competing to provide broadband services to Internet service providers. I therefore held urgent discussions with BT, and I asked them to make reductions in the price of the Datastream product.

"Maintaining the commercial viability of the Datastream product is crucial if other operators are to be able to compete fairly in broadband connectivity. It is also vital to ISPs and hence consumers to ensure the maximum choice and competitive pressure in the market.

"I welcome the fact that BT has announced today that it will cut its Datastream prices by £0.70 a line, with additional discounts for high volume connections. This price cut should place other operators back on a more level playing field with BT. It is of the same level as I would have imposed using my statutory enforcement powers at this stage of the investigation.

"Oftel will continue with its work to establish whether BT is operating a margin squeeze between its IPStream and Datastream products. Oftel will publish its views next month.

"Oftel has acted – and will continue to act - swiftly when it receives complaints from other operators. Ensuring a wide range of competitively priced wholesale products in the market is crucial to the future of Broadband Britain."

Note to Editors

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