BT is furious at Oftel's plans to reduce the price of its Flat Rate Internet Access Call Origination (Friaco) service.
Friaco was developed in 2000 by AOL and MCI WorldCom alongside Oftel to force BT to provide flat rate internet access to operators at wholesale prices. BT says the mooted price cuts are too steep and could send the service to the wall.
The telecoms watchdog wants a seven per cent cut in the wholesale flat rate offering based on research which a BT spokesman said used out of date figures to reach its conclusion.
The spokesman maintained that BT Wholesale will be asking Oftel to look closely at the plans, but would not say by how much it wanted the costs cut.
He added that Friaco's low price may inhibit the UK uptake of broadband because customers will not turn to a more expensive product.
The price cut proposal is currently in the consultation period that closes on 19 March.
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