Freeserve in legal fight against Oftel

Broadband scrap

Freeserve went to a Competition Commission tribunal on Tuesday to get an Oftel ruling concerning BT's alleged abuse of its dominant market overturned.

The ISP claims it's been forced to take this action to ensure that the telecoms regulator complies with its responsibilities to enforce competition law in a proper manner.

Yesterday's appeal against the Director General of Telecommunications comes after Oftel rejected a complaint lodged earlier this year in which Freeserve alleged BT Wholesale had abused its dominant position through cross-subsidy, discrimination and predatory pricing.

Unhappy with Oftel's decision to dismiss Freeserve's concerns, the UK's biggest ISP took Oftel to the Competition Commission Appeals Tribunal (CCAT) alleging that BT Openworld was given advance notice on the 40 per cent price cut on wholesale broadband access announced earlier this year.

Freeserve also alleged that this enabled BT Openworld to put together marketing campaigns and price offers well before other ISPs had a chance to react to the price cuts.

BT has always strenuously denied that these allegations are true. But if Freeserve is successful in its legal challenge, then ultimately Oftel could be forced to either re-examine the case, or the Competition Commission might decide to look at the matter itself.

A ruling from this preliminary hearing is expected within a couple of weeks.

Tuesday's legal action coincided with Freeserve lodging another complaint against BT.

This time, Freeserve complained to Oftel about BT Broadband - the no-frills access-only product from BT Retail.

It maintains that BT Retail - the massive customer-facing division of BT with more than 20m customers - is capitalising on its "monopoly position" within the fixed line telephony market to flog BT Broadband.

By doing so Freeserve alleges that BT Retail has "unmatchable advantages" against ISPs, including the giant telco's own Internet division, BTopenworld.

Said David Melville, Freeserve General Counsel: "Oftel would have us believe that all is rosy in the UK's broadband market with consumer take-up now gathering pace.

"But market growth must not be at the expense of the true competition that created affordable narrowband Internet for millions of consumers.

"Nobody has any interest in seeing BT monopolise this important new market the way it does telephony, least of all consumers, who will see prices fall more slowly and service quality inevitably suffer.

"If the UK truly wants to climb the world’s broadband league ladder, then more must be done by to promote healthy competition and so stimulate genuine consumer choice," he said.

Freeserve warned that if BT was allowed to carry on unchecked it could stifle the development of the broadband market and keep prices artificially high.

Sources at BT dismissed this latest complaint describing Freeserve as a "serial complainer" and warned that anything Freeserve said should be taken with a "large pinch of salt". ®

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