Ref: 42/03
Date: 11 July 2003

An Oftel investigation has concluded that BT's broadband marketing strategy does not breach the Competition Act, following a complaint by Freeserve.

Freeserve alleged that BT was behaving anti-competitively by using its 'blue bill' and '150' customer service line to market its BT Broadband product and by offering joint telephony and Internet billing.

Oftel carried out a detailed investigation into Freeserve's concerns but found that BT's current use of its 'blue bill' and '150' customer line did not give them an unfair advantage over competitors such as Freeserve.

Key Oftel conclusions relating to Freeserve's three areas of complaint included:

– Use of the BT retail '150' customer support number as a sales and marketing channel for BT Broadband: Oftel's investigation showed that the number of consumers taking BT Broadband as a result of '150' marketing was sufficiently low not to have a material adverse effect on competition.

– Joint billing - using the 'blue bill' to bill for both retail telephony and retail broadband services: The benefits of offering a joint billing service can be easily replicated using credit card payments or direct debit.

– Use of the 'blue bill' as a marketing and advertising channel for BT Broadband: BT includes a copy of BTUpdate with the blue bill of all customers regardless of their likely interest in broadband. This gives rise to a relatively high cost per broadband customer gained by this route. Competitors can more specifically target likely broadband users by using direct marketing at a similar or lower cost.

David Edmonds, Director General of Telecommunications said today:

"Oftel considers all complaints carefully and investigates them fully. We are committed to ensuring that all service providers can compete fairly in the broadband markets.

"Oftel looked at each of the issues raised by Freeserve, and considered them in detail. In this instance we have concluded that BT's marketing activity using the 'blue bill' and '150' customer service line does not prevent Freeserve competing on a fair basis."

Notes to editors

1. The Director General's decision on the Competition Act investigation into alleged anti-competitive practices by BT in relation to its BT Broadband product is available on the Oftel website at www.oftel.gov.uk/publications/broadband/other/free0703.htm. Hard copies are available to the media from the Press Office on 020 7634 8991 and to the public from the Research and Information Unit on 020 7634 8761.

2. Freeserve submitted its complaint to Oftel on 22 October 2002 and an investigation was opened shortly afterwards. During the investigation, Oftel obtained evidence from BT, Freeserve and a number of other leading ISPs. A significant amount of consumer research was also used.

3. The 'blue bill' is BT's means of billing its approximately 18.5 million residential telephony customers.

4. The '150' service is BT's customer support line that deals with requests for information about BT products, billing queries and home moves.