Telcos launch competition attack on BT

Three leading telecoms companies are using the 1998 Competitions Act to launch a new offensive against BT's DataStream pricing policy.

Energis, supported by Tiscali and Your Communications, has complained to telecoms watchdog Oftel that BT is abusing its dominant position in the market, contrary to chapter II of the Competitions Act.

It alleges that BT consistently uses multiple tactics to undermine the viability of DataStream as opposed to IPStream, and that this amounts to "anti-competitive" behaviour.

DataStream is the delivery method that allows rival wholesalers to offer services to ISPs or direct to customers using their own networks.

IPStream allows ADSL broadband connections to be resold by ISPs, such as BTopenworld, Freeserve and AOL, over BT's networks.

The companies argue that the unequal wholesale prices of DataStream and IPStream is detrimental to the take up of DataStream and competitive broadband services. BT's discount schemes also favour IPStream, they claim.

The telcos are also citing discrimination on contract terms because the minimum contract for IPStream is one month, but for DataStream it is three months.

BT slashed the wholesale price of IPStream in April. But it did not reduce the price of DataStream until May, after Energis, Tiscali and Your Communications lodged separate complaints with Oftel under the 1984 Telecommunications Act.

The latest complaint to Oftel means that all three of the complainants will drop their original and separate complaints which were filed under the Telecommunications Act, as they believe that this tactic has run out of steam.

Rickard Granbery, head of regulatory affairs at Your Communications, told vnunet.com that the May price cut was a token gesture.

"We were pleased with Oftel's initial speed which forced BT to lower the wholesale price," he said.

"But this reduction was not enough and we don't believe Oftel will go further and propose further price cuts under the original investigation."

The telcos believe that the Competitions Act will also produce faster and fairer results, and allow all parties to appeal through the Competition Appeals Tribunal and claim damages.

A spokesman for BT said it would co-operate fully with Oftel, but did not believe their was a case to answer. "We wholly refute the suggestion of anti-competitive behaviour," he said.