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Ofcom review 'misses golden opportunity'

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Ofcom has "missed a golden opportunity to open up the UK communications market to greater competition, innovation and investment", according to internet lobby group UKIF.

In its review of the UK telecoms sector published today, Ofcom said it wants BT to engage "substantive behavioural and organisational changes" and provide equal access to its wholesale product range. The aim is to increase competition and deliver a better deal for customers.

In its response to Ofcom's findings, UKIF is bemused that while Ofcom has done nothing to remedy the several enduring economic and technical 'bottlenecks' - identified by the regulator - which BT uses to maintain its dominant position,

Instead, complains UKIF, Ofcom calls for BT to put its house in order or face the possibility of forcibly being broken up.

In a dig at Ofcom UKIF said: "The key phrases in Ofcom's review are that it seeks 'a significant shift in BT's behaviour' but 'looks to the management of BT to provide prompt and clear proposals which will achieve such a change'.

"UKIF notes that whilst Ofcom seeks to avoid 'the regulatory battles of the last twenty years', it appears to be doing this by avoiding regulation itself and leaving it to BT to propose the way forward. If Ofcom will not regulate then what is its function?" it said.

UKCTA - an umbrella group representing a host of telcos including Cable & Wireless, Colt, Energis, NTL and Thus - was less critical of Ofcom's review. It reckons Ofcom's got BT by the short and curlies.

Said UKCTA chairman David McConnell: "Today is significant for consumers and the industry because Ofcom has indicated its determination to tackle the enduring problem of BT's advantage. We're delighted to see Ofcom's commitment to giving all competitors a fair crack of the whip. However, there are many challenges ahead. BT needs to change its ways if it is to comply with the obligations that we expect Ofcom to put in place."

The Communications Management Association (CMA) - which represents "communications professionals" - reckons Ofcom got it spot on. "CMA welcomes - without reservation - the positive, dynamic, forward looking, set of proposals released today by Ofcom. Together, the proposals address every major issues raised by the business user community over the last 20 years."

BT's response was short and dodges anything contentious. Said chief exec Ben Verwaayen: "We welcome Ofcom's call for a new settlement where regulation is tightly focused on the parts of the market that need it, with deregulation elsewhere. This would be a real prize for the industry, consumers and for British competitiveness. We will engage constructively with Ofcom and the industry during the final phase of the Strategic Review, looking forward to achieving regulatory certainty that will encourage investment and innovation." ®

Related stories

Ofcom tells BT: shape up, or split up
Telecoms review? What telecoms review?
Ofcom's review of telecoms due this week
BT: Nation's broadband investment in Ofcom's hands

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