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BT gutted at Ofcom's 'prolonged misbehaviour' allegations

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BT reckons it's been miscast as the villain of the UK's telcoms sector even though it reckons it has a good track record of regulatory compliance.

In a strong defence of its actions, BT criticises Ofcom for failing to project a balanced view of the former monopoly's role in the sector.

Writing in its response to the telecoms review BT said: "We are very concerned and disappointed by the allegations of prolonged misbehaviour or unsatisfactory activity of one sort or another being made against BT throughout the Phase 2 [telecoms review] document. We believe that the real picture is far from the one that Ofcom has painted."

So, why is BT getting so hot under the collar about Ofcom's remarks made in the review published last November? A quick flick through the Strategic Review of Telecommunications - Phase 2 consolation document throws up one or two examples.

Take this from page 14.

"We recognise that BT currently applies significant resources to regulatory compliance...yet continued complaints from BT's wholesale customers raise concerns that some types of behaviour by BT - such as inappropriate information sharing, inferior processes, and lack of priority for wholesale customers' product development - are both unfair and commonplace.

"The way that BT conducts its internal business creates both the incentive and the means for unfair treatment of this nature. Even where individual allegations are not proven, it is clear from the views of BT's wholesale customers that the current systems do not deliver the transparency and confidence that BT's customers require."

According to BT, this is utter tosh. It says Ofcom has failed to heed its own guidelines that all complaints must be backed by evidence.

"Under the current regulatory regime, there have been two enforcement notices that have a potential wholesale dimension," maintains BT, and "both concerned in effect the same issue - use of customer data."

Indeed BT turns the tables and accuses some operators of lodging "speculative disputes" to try and steal a lead in the sector. "We saw a clear trend of operators negotiating with us and reaching what might be a reasonable position, and then referring the matter to Oftel as a dispute. We believe that other operators were aware of this and sought to exploit this state of affairs to maximise their financial position."

Instead, "BT has, however, shown its willingness over the years to work constructively with industry and in the main this has worked extremely well. Indeed, overall, BT does have an excellent track record of compliance with its regulatory obligations."

Continual game of bait

This may come as a surprise to those in the industry that have battled - and continue to battle - against the stranglehold BT has on the UK's telecoms sector.

Curiously, many of those who've spoken to The Register about such issues have done so "off the record". They fear - genuine or otherwise - that going public would jeopardise their commercial relationship with BT on whom many of them rely.

Describing BT's approach to regulation one industry insider told us: "BT plays a continual game of bait and switch with its competitors and is constantly pushing the boundaries of what is fair. It behaves like a driver who only slows down when there's a speed camera in sight."

Another spoke of BT's approach to regulation as "walking backwards slowly" and that when BT and "the industry" meet face to face, the room is often split between "us and them".

"I'd say Ofcom's statement of objections against BT seems to be pretty clear evidence that BT continues to abuse its dominant position. The longer BT sticks its head in the sand and ignores it, the higher the fine and damages claims it will receive," remarked another source.

Speaking in 2001, David Edmonds, the then head of Oftel, said that local loop unbundling (LLU) has "not been a success" and that the practicalities surrounding opening up BT's network to competition has been a "painful and often miserable process".

Edmonds explained that LLU had been one of the "most complex regulatory interventions that Oftel's ever had to do" made worse by BT's reluctance to open up the last mile to competition.

"There is no doubt that the actual practicality of that has been a painful and often miserable process. There is no doubt that in carrying through the strict requirements on them, BT didn't behave in a way that I believed showed that they really wanted to unbundle the local loop to let their competitors into the network. At every stage we've had arguments and we've had disputes."

The perception for many in the industry is that BT is an "arrogant organisation" that exploits every inch of its status as the UK's incumbent fixed-line telco to retain its dominant position. It's up to Ofcom to decide whether BT's recent proposals to change the way it does business and open up its networks to competition is enough to appease the regulator. ®

Related stories

Energis calls for BT break-up
BT promises to play fair, in Ofcom appeasement
BT DSL price cut undermines LLU competition
BT clobbered in Ofcom probe
Rivals warn of BT 'delaying tactics'

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