Feeds

BT faces 'bogeyman' if it fails to open market

Change, or else...

  • alert
  • submit to reddit

Beginner's guide to SSL certificates

Ofcom has once again warned that BT's failure to restructure its business and open up its market to genuine competition would make an enforced structural split of the company a "real possibility".

In November, Ofcom rejected calls to break up BT and instead urged the telco to make "substantive behavioural and organisational changes" and provide equal access to its wholesale product range. Such changes would lead to greater competition and a better deal for consumers, said the regulator.

But if BT fails to make the necessary changes then Ofcom warned that it would begin an Enterprise Act market investigation, and referral to the Competition Commission in a bid to split up the UK's former telecoms monopoly.

With less than a week to go until BT is due to respond to Ofcom's demands, Ofcom boss Stephen Carter told a meeting of the Westminster eForum that the regulator remains committed to opening up the sector to competition.

"Let me be clear. The possibility of an Enterprise Act investigation is not simply a bogeyman to secure the façade of co-operation from BT," he said on Wednesday. "It is and must remain a real possibility if, reluctantly, we conclude that true equality of access cannot be achieved."

What if?

So, just for argument's sake, what if BT does not give the necessary assurances that Ofcom wants? What if BT sticks two fingers up to Ofcom and tells the regulator that it "cannot countenance the kind of equality of access - behavioural change and product level equivalence - that we [Ofcom] have said is essential?"

Carter said Ofcom could use existing powers to tackle each of the outstanding issues.

"But to impose such remedies in the face of BT's active hostility... would be a very complicated and time-consuming task. It would need to be done case by case, product by product and market by market, with BT having the opportunity to appeal our decisions at every stage."

And although he accepts that the use of the Enterprise Act would lead to delays and uncertainty, "imposing real equality of access in the teeth of sustained opposition would impose even more delay and uncertainty and ironically would probably involve not one but several trips to the competition commission to resolve.

"An Enterprise Act referral, whilst undesirable in many ways, would be less undesirable than a protracted attempt to impose real equality of access via the sector powers route," he said.

However, unleashing the "bogeyman" would not happen overnight. Not only would Ofcom have to digest fully BT's response, with all the signs pointing to a Spring general election Ofcom does not feel this would be a great time to announce decisions that "could have significant market and public policy impact".

Last weekend, BT boss Ben Verwaayen warned that more than half of UK homes and businesses could be left without advanced broadband services if Ofcom continues to press ahead with plans to make the UK's telecoms sector more competitive.

Verwaayen argued that the regulator's preference for local loop unbundling (LLU) would lead to a new digital divide with rival telcos cherry-picking the most lucrative exchanges leaving vast swathes of the UK without up-to-date services. ®

Related stories

BT warns of broadband divide ahead of Ofcom review
MPs to scrutinise Ofcom's telecoms review
Tough-talking Ofcom boss slaps BT
BT stands firm against Ofcom
Ofcom tells BT: shape up, or split up

Secure remote control for conventional and virtual desktops

More from The Register

next story
Sea-Me-We 5 construction starts
New sub cable to go live 2016
Vodafone to buy 140 Phones 4u stores from stricken retailer
887 jobs 'preserved' in the process, says administrator PwC
BT claims almost-gigabit connections over COPPER WIRE
Just need to bring the fibre box within 19m ...
EE coughs to BROKEN data usage metrics BLUNDER that short-changes customers
Carrier apologises for 'inflated' measurements cockup
Comcast: Help, help, FCC. Netflix and pals are EXTORTIONISTS
The others guys are being mean so therefore ... monopoly all good, yeah?
Surprise: if you work from home you need the Internet
Buffer-rage sends Aussies out to experience road rage
EE buys 58 Phones 4u stores for £2.5m after picking over carcass
Operator says it will safeguard 359 jobs, plans lick of paint
prev story

Whitepapers

Providing a secure and efficient Helpdesk
A single remote control platform for user support is be key to providing an efficient helpdesk. Retain full control over the way in which screen and keystroke data is transmitted.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.
Security for virtualized datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.
Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.