Feeds

Ofcom plays down BT split rumour

'Hypothetical and discursive' mootings

  • alert
  • submit to reddit

Top 5 reasons to deploy VMware with Tegile

Ofcom has played down speculation that it is working on the "pros and cons" of splitting up BT.

Today's FT reports that the UK's giant communications regulator is examining the merits of splitting BT's wholesale and retail divisions. Such a move would free BT Retail - which still accounts for more than 70 per cent of domestic phone lines in the UK - from regulation and been seen as a move to improve competition in the sector.

However, Ofcom has played down speculation surrounding a possible break-up, claiming it's just one of the issues being discussed as part of its Strategic Review of Telecommunications.

"We are exploring a large number of 'what if?' scenarios to inform our overall thinking about the future direction of the telecommunications sector," said a spokesman for the regulator.

"All such discussions are entirely hypothetical and discursive in nature. They are simply intended to provide an initial understanding of the implications of possible changes in the sector over time and do not in any way indicate a decision on a course of action."

The regulator is expected to publish the first phase of its consultation into the UK telecoms sector later this week when the matter, no doubt, is likely to be brought into focus. However, only two months ago an influential group of MPs rejected calls to split the UK's dominant fixed line telco claiming such as move did "not justify the upheaval involved". Although MPs accepted that such a move might be popular with some of BT's rivals, they also concluded that such a move wouldn't remove the need for regulation, merely shift it instead.

Perhaps of more immediate concern for BT is Ofcom's much-awaited decision following its "urgent" investigation into allegations that the telco's new phone tariffs are anti-competitive.

In March, BT announced plans to scrap its "standard rate" in a move it said would simplify its tariff structure and make its service even better value for money for its customers. Rivals were quick to point out that scrapping its standard rate would increase the cost of competing services run by companies such as The Carphone Warehouse, Telse2 and Tesco.

In what is regarded by many as its first major test as the new communications regulator, Ofcom launched an investigation under Chapter II of the Competition Act into BT's new residential retail tariff packages for line rental and calls.

The investigation is examining if the changes - which include the scrapping of standard rate line rental - constitute an abuse of BT's dominant position under the Competition Act 1998.

An initial ruling is expected within the next week or so and the Sunday Times reckons the regulator could "take a hard line against BT". If Ofcom's ruling does go against BT, the regulator could force BT to cease or reverse the proposed new tariffs. For its part, BT has said in the past that the tariff changes are "wholly in line with our legal and regulatory obligation".

A spokesman for BT declined to be drawn on the matter except to say: "Ofcom has made no formal announcement on their decision, and it would be inappropriate to comment until the decision is made public." ®

Related stories

Ofcom calls BT tariff changes 'a surprise'
Ofcom starts urgent investigation into BT tariffs
Centrica mulls legal action over BT tariffs
Ofcom to examine BT tariff change
BT simplifies tariffs
MPs accuse Oftel of failure to help consumers
UK held back by lack of broadband competition
Ofcom to probe UK telecom sector

Choosing a cloud hosting partner with confidence

More from The Register

next story
Of COURSE Stephen Elop's to blame for Nokia woes, says author
'Google did have some unique propositions for Nokia'
FCC, Google cast eye over millimetre wireless
The smaller the wave, the bigger 5G's chances of success
It's even GRIMMER up North after MEGA SKY BROADBAND OUTAGE
By 'eck! Eccles cake production thrown into jeopardy
Mobile coverage on trains really is pants
You thought it was just *insert your provider here*, but now we have numbers
Don't mess with Texas ('cos it's getting Google Fiber and you're not)
A bit late, but company says 1Gbps Austin network almost ready to compete with AT&T
prev story

Whitepapers

Forging a new future with identity relationship management
Learn about ForgeRock's next generation IRM platform and how it is designed to empower CEOS's and enterprises to engage with consumers.
Why and how to choose the right cloud vendor
The benefits of cloud-based storage in your processes. Eliminate onsite, disk-based backup and archiving in favor of cloud-based data protection.
Three 1TB solid state scorchers up for grabs
Big SSDs can be expensive but think big and think free because you could be the lucky winner of one of three 1TB Samsung SSD 840 EVO drives that we’re giving away worth over £300 apiece.
Reg Reader Research: SaaS based Email and Office Productivity Tools
Read this Reg reader report which provides advice and guidance for SMBs towards the use of SaaS based email and Office productivity tools.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.