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Freeserve's legal broadband challenge clears hurdle

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The competition watchdog is to examine a complaint made by Freeserve concerning BT's marketing of residential broadband Internet access.

The investigation by the Competition Commission Appeal Tribunal (CCAT) follows complaints made by Freeserve to telecoms regulator, Oftel, earlier this year.

The complaints centred on allegations that BT Wholesale had abused its dominant position through cross-subsidy, discrimination and predatory pricing. Freeserve alleged that BT Openworld, BT's ISP division, was given advance notice on the 40 per cent price reduction on wholesale broadband access announced earlier this year.

The UK's biggest ISP alleged that this enabled BT Openworld to put together marketing campaigns and price offers before the rest of the market had a chance to react.

Oftel rejected Freeserve's allegation.

However, following yesterday's ruling the CCAT ruled that the Director General of OFTEL had made an "appealable decision" in relation to all areas of the complaint made by Freeserve, and the CCAT can now proceed to examine the substance of the complaint.

In a statement David Melville, Freeserve General Counsel, said: "Notwithstanding institutionalised inactivity and prevarication by the industry Regulator Oftel, we welcome the CCAT judgement as underlining a judicial commitment to ensure competition in this important new market. Competition is vital if the UK is to achieve its ambitious programme for mass consumer take-up of broadband Internet."

A spokesman for BT said that this was a "matter for Oftel" but added that the ruling was merely "dealing with their [Oftel's] procedures".

A spokeswoman for Oftel said: "Any decision made by Oftel is open to appeal."

The case is due to be considered by the CCAT in mid-January 2003. ®

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