Oftel rejects BT break-up call
Reckons it can handle BT
Oftel has rejected calls by MPs to break up BT insisting that it has sufficient powers to ensure that the former state monopoly does not abuse it market position.
In May, the Culture Media and Sport Committee published a report on the UK's communication sector in which it raised serious concerns about the creation of a truly competitive broadband market.
Said the report: "Oftel, and Ofcom, when it takes over the responsibilities of Oftel in due course, should take serious note of the criticisms of the effectiveness in establishing a competitive UK market for broadband and follow-up with remedial action, taking account of the proposal to require BT's network to stand on its own as a distinct business."
Today, the regulator dismissed calls for BT to be broken up, claiming that it has sufficient powers to deal with any potential anti-competitive behaviour in the broadband market.
Oftel acknowledges that BT's dominant position as a wholesale and retail provider of telcoms services has led to tensions within the industry - tensions which have culminated in demands for the break-up of BT.
But it claims that such a demand is outside its current powers and insists that the whole issue of the structure of BT is a matter for BT and its shareholders alone.
"Neither the Secretary of State nor Oftel has the right to break up BT. There is a power for the Secretary of State to make a reference to the Competition Commission if it is considered that there is a scale or complex monopoly. The Government response states that no such reference is currently proposed," it said.
It continued: "For Oftel to conclude that there is a compelling argument to support a forced split of BT would require confidence that the benefits for UK consumers outweigh the disbenefits.
"To expose the industry - not just BT - to the uncertainties of a Competition Commission reference would be a disproportionate response especially in the light of current turbulence in financial markets. ®
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