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'Stifling competition'

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MediaWays.uk - a subsidiary of German Internet outfit Telefonica - has lodged a new complaint with telecoms regulator Oftel over plans by BT to increase the cost of its wholesale broadband product, Datastream.

In June, BT was forced to reduce the price for DataStream by 70p a line following a barrage of complaints from rivals accusing it of anti-competitive behaviour.

Although the price cut was welcomed, rival operators argued that it did not go far enough.

Now, BT has told Oftel it plans to increase the cost of an element of DataStream, which MeadiaWays.uk claims will lead to an increase of around 60p a line - effectively wiping out the cut made three months ago.

Said Martin Kuetter, MD of MediaWays.uk: "BT's consistent abuse of its market power is stifling competition and placing excessive burden on the operators.

"Worryingly, Oftel's ability to keep pace and react to anti-competitive price tactics such as these is in question," he said.

BT defended the move insisting that the new costings are based on specific charges for different components rather than an aggregate cost.

A BT Wholesale spokesman said he was unable to comment on the 60p per line increase quoted by MediaWays.uk since the cost would vary depending on how operators "assembled their Datastream-based services".

In April, BT announced it was to cut the wholesale cost of its IPStream product. But the move was savaged by many in the industry who accused BT of anti-competitive behaviour, claiming that the price cuts discriminated against operators with rival networks, including those involved in opening up the local loop.

They argued the price cuts applied only to BT's wholesale IPStream product, which provides an end-to-end ADSL service solely using BT's network. The cuts did not apply to Datastream products, which use competing national networks from alternative rival carriers.

In June, BT bowed to pressure form Oftel and cut the cost of its wholesale Datastream product. However, rivals claimed this did not go far enough. One competitor, Energis, submitted a new complaint to Oftel under the Competition Act in a bid to increase the pressure on BT to loosen its "stranglehold on the [UK's] wholesale broadband market".

A spokesman for Oftel confirmed that it had received a complaint from MediaWays.uk and that it was investigating the matter. ®

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