Oftel tells BT to stop whingeing
Not fair, not fair, not fair
BT may be in serious trouble at the moment but don't think its attitude to controlling UK telecoms has changed. Oftel decided in February that the company was still making an unnecessary profit from household phone lines and so it would extend its price capping system.
Up until today, BT has simply argued that this isn't the case and the controls should be removed - its usual approach to shifting the end-point of any argument. Oftel is gradually getting wise to this and has refused. Although why it writes this up in a press release today as "BT has accepted the proposed new retail and network price controls", we don't know.
And so the controls that will see BT change household charges by inflation less 4.5 per cent (i.e. if inflation is 4.5 per cent, prices stay at the same level) will stand. As well as this there is a 7.5 per cent on FRIACO - which at some point may make it viable.
The controls will stand until 31 July 2002. There will also be another evaluation then to decide whether to extend them still further to July 2003.
In the February report, Oftel concluded that "BT's returns on calls, assessed on the basis of BT's cost allocation, remained substantially above a reasonable level. These returns were significantly offset by the failure to recover fully through line rental the costs allocated to access under BT's cost allocation. Nevertheless, the overall level of profitability exceeded what BT requires to cover its full costs and make a reasonable return."
Meanwhile Sir Bonfield (we're still behind you, Pete) and Sir Vallance are still refusing to poke their heads out the ivory tower's windows and listen to the cries for their heads. That's the spirit. ®
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