Oftel acts on unmetered web access

Telecoms watchdog Oftel today proposed changes to the arrangements by which BT supplies wholesale unmetered internet access. The move could give operators more flexible payment schemes.

But according to recent reports, the cost of accessing the web in Europe may be on the rise as internet service providers push for profit.

Senior executives at Freeserve and Tiscali said that the pressure was on to raise prices in some European countries, according to the Financial Times.

But among Oftel's proposals the most significant changes put forward would ensure that BT supplies unmetered internet access "in response to fair and reasonable demand", by offering payment terms for unmetered access which are the same as those for metered access.

Currently an operator has to pay BT in advance for unmetered capacity, whereas metered capacity is paid for in arrears.

Oftel is also examining the circumstances in which BT must increase network capacity to handle internet traffic, and the company's ability to charge for the routing of internet calls within its own exchanges.

Most of the proposals will only make a difference to those operators which buy the ST Friaco (Single Tandem Flat Rate Internet Access Call Origination) wholesale product from BT.

David Edmonds, director general at Oftel, said the proposals were a bid to ensure that demand for internet access will continue to be met.

"Friaco has led to some of the cheapest prices for internet access in the world. Calls to the internet now make up over 40 per cent of all traffic carried across the UK's telecoms networks," he explained.

"The proposals announced today further support the development of unmetered internet access in the UK by clarifying the obligations on BT," he added. "The measures will ensure that other operators can continue to use ST Friaco to deliver unmetered internet access to consumers."

Internet access costs in the UK fell initially because of high competition in the market. But now that competition is less fierce as providers merge or disappear, firms are increasingly considering how to boost profits.