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Oftel probes another BT ADSL install complaint

This time it's Freeserve that's unhappy

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Oftel is investigating a complaint that BT is subsidising installation costs for its multi-user business class broadband service.

Freeserve lodged the complaint with the telecoms regulator earlier this month urging it to consider whether this represented an unfair cross-subsidy and breach of BT's licence.

The regulator confirmed that it has received the complaint and is investigating.

The complaint centres on cut price installation costs for BTopenworld's multi-user Business 500 Plus ADSL product which Freeserve alleges is not covered by any wholesale price reductions.

In September BT announced its intention to halve the wholesale cost of installing its popular IPStream 500 product, from £150 to £75, in the three months running up to Christmas.

BTopenworld announced it would pass on the cuts which applied to its single-user Home 500 and Business 500 ADSL products.

However, BTopenworld also extended the cut-price installation offer to its Business 500 Plus product even though there was no corresponding cut in the wholesale offering for this service.

The result was an angry letter from Freeserve in which it claims BT is in "possible breach of the prohibition of abuse of dominant market position".

Said Paul Barker of Freeserve: "We have no problem with seeing wholesale prices come down. But you have to question BT's commercial sustainability when it absorbs price cuts of this nature."

Referring to Freeserve's market dominance in the dial-up sector he added: "We killed them on narrowband - we just want to compete on a level playing field with broadband."

A spokesman for BTopenworld was not aware of the complaint but insisted that it was not guilty of cross-subsidy since the promotional funding came from within BTopenworld.

Recently, Bulldog Communications complained to Oftel that BT's wholesale cuts in installation prices is unfair to those telcos offering unbundled services.

Privately, BT is understood to be getting more and more exasperated that the regulatory process is stifling its attempts to cut prices for broadband users.

The line from Oftel is that it welcomes price cuts as long as they are not anti-competitive. ®

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