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BT has signalled that it won't roll over and comply with new regulatory demands made by Ofcom if such moves are too damaging for its business.

In its review of the UK's telecoms sector last month Ofcom called on BT to give rival operators equal access to its products and services (aka "equivalence") and to bring about "substantive behavioural and organisational changes" within its sprawling organisation.

Failure to make these changes would lead to BT facing the threat of being broken up, said Ofcom.

But BT boss Ben Verwaayen today told the Financial Times that it would not meet all of Ofcom's demands if it meant damaging its business.

"If equivalence means everything that is invented by BT must be available to everybody else, then the answer is that's not equivalence, "he said. "You have to define what [equivalence] is...otherwise every invention that somebody in BT comes up with immediately goes to the rest of the world - that would be ridiculous. [Equivalence] is about that part that has to be regulated because it is uneconomic or technically impossible [for rivals] to replicate."

Verwaayen called for greater co-operation within the industry to help bring about the changes demanded by Ofcom. "I think it's possible, but it takes two to tango and in this case it takes a whole army to tango because the whole market has to tango with us," he said.

But his comments have already caused concern. One source, who asked not to be named, told us: "We'd love to go dancing with BT, but every time we put on our posh frock BT changes the tune."

Insiders reckon this is exactly what BT is doing now. Faced with a February deadline to show that it will comply, they claim BT is back to its same old tricks and putting up resistance to the regulator. It's also facing up to Ofcom, which effectively issued an ultimatum - comply or face being broken up.

"BT is stalling - it's buying time. It's had plenty of time to talk in the past but never did. Now the pressure is on it's decided it wants to discuss this with the industry. Ofcom will have to watch out that BT doesn't string it along like it did so well with Oftel," said the source.

No one from Ofcom was available for comment. ®

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