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BT backtracks on broadband pricing cuts

Not enough, says Tiscali

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BT has cut the cost of its wholesale Datastream product following complaints from rival operators that the dominant telco was acting uncompetitively.

Last month five telcos (Energis, mediaWays.uk Ltd, Thus, Tiscali and Your Communications) complained to Oftel about price cuts for BT's wholesale IPStream ADSL product - the wholesale end-to-end service provided by BT Wholesale to the telco's retail operations and other service providers.

The telcos argued that BT failed to pass on similar price cuts to its wholesale Datastream service - a product that allows other service providers to use their own networks to provide competitive broadband services.

They argued that the failure to cut the wholesale cost of the Datastream product amounted to a "margin squeeze" and accused the dominant telco of "anti-competitive" behaviour.

The matter was even raised in the House of Commons last week as Labour MP, Brian White, branded the selective price cut as "unfair competition".

The allegations surrounding BT's behaviour were so serious, industry sources claimed that Oftel was even considering blocking the proposed price cuts to the IPStream product while it carried out a full investigation into the matter.

Today, though, BT announced that from June it is to cut 70p a month (plus discounts up to 17p a month) from its Datastream service.

BT claims this is "good news for the industry and a further boost to the broadband market" and insists that the cuts are "comparable" to the reductions in the cost of IPStream.

However, the cut is not enough for Tiscali UK, which claims the price cut only came as a result of the volume of complaints against BT.

In a statement Sergio Cellini, the CEO of Tiscali UK, said: "This has been a clear manoeuvre by BT to offer the minimum possible price concession to prevent Oftel acting immediately on this matter.

"We expect Oftel will continue to investigate the current pricing complaints, to prevent ongoing discrimination in favour of BT's offer and especially as nothing has changed in the business tariffs, where BT is obviously trying to reinstate itself as a monopoly." ®

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