BT has agreed to cut prices for both of its wholesale high-speed internet products, following rivals' complaints to Oftel that its price cutting was unfair.
The telco had previously promised to reduce its IPStream product by around £1.75 per month, while leaving the price of its DataStream product untouched.
This prompted furious complaints to Oftel from rivals Thus, Energis, Tiscali, mediaWays.uk and Your Communications that margins on DataStream were being squeezed.
The matter was even raised in parliament when Labour MP Brian White described BT's move as amounting to "unfair competition".
BT has now agreed to cut charges for the DataStream wholesale product by 70p per month, as well as provide further volume-related discounts of up to 17p from June. But this may not be enough to appease Oftel.
IPStream provides the backbone for ADSL broadband connections resold by internet service providers (ISPs) such as BTOpenworld, Freeserve and AOL. But it is exclusive to BT Wholesale.
DataStream allows rival wholesalers to offer services to ISPs or direct to customers by connecting to BT's network and then sending traffic via their own backbones.
BT's rivals maintain that this offers a better and more flexible alternative.
"As part of our drive to reduce broadband prices we agreed, in discussions with Oftel, also to cut DataStream prices," said Paul Reynolds, chief executive at BT Wholesale.
David Edmonds, director general of telecommunications at Oftel, insisted that maintaining the commercial viability of the DataStream product is "crucial if other operators are to be able to compete fairly in broadband connectivity".
An Oftel spokesman later confirmed: "We are still investigating the issue of whether there is a margin squeeze and whether we need to take further action."
Thus, Energis and Tiscali have urged the watchdog to demand further reductions to "prevent ongoing discrimination".
"BT has to be compelled to give ground yard by yard and their late, reluctant and modest price reduction does nothing to redress the competitive balance," said John Pluthero, chief executive at Energis.
"The complaint is still open. We urge Oftel to conclude it rapidly and insist on a full price reduction to DataStream."
Ian Hood, director of communications and regulatory affairs at Thus, added: "The price cuts announced by BT appear to be the minimum required."
Sergio Cellini, chief executive at Tiscali UK, said: "This has been a clear manoeuvre by BT to offer the minimum possible price concession.
"Nothing has changed in the business tariffs, where BT is obviously trying to reinstate itself as a monopoly."
Oftel is scheduled to publish its findings next month.
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