Commentary: Collect call from Oftel
Your support helps us to tell the story
From reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it's investigating the financials of Elon Musk's pro-Trump PAC or producing our latest documentary, 'The A Word', which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.
At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.
The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.
Your support makes all the difference.BT yesterday bowed to the inevitable by agreeing to the new curbs on its telephone charges proposed by the regulator, Oftel.
The veiled threat from BT that it would sooner take the issue to the Monopolies and Mergers Commission than accede to a price formula limiting annual increases in its basic charges to 7.5 per cent less than inflation always had a hollow ring to it. So it has proved.
The new price cap will cut BT's profits, currently running at pounds 3bn a year, by a relatively modest pounds 100m and still leave it earning a rate of return of between 16.5 and 18.5 per cent.
Contrast that with the prospect of a lengthy and distracting examination before the MMC with no guarantee of any happier an outcome, and it is difficult to see why it took BT two months to accept Oftel's proposals.
The climbdown should be good news for BT's customers - on paper, the median domestic bill of pounds 46 should fall by about 3 per cent.
But there is one respect in which it may prove a more worrying harbinger for BT. Past experience has shown that when a privatised utility gives the regulator an inch, then the regulator is inclined to take a bit more. One only needs to examine British Gas's experience at the hands of Ofgas to see what kind of results this can have.
Having stood up for BT's customers, Oftel is now ready to do likewise on behalf of its competitors by forcing BT to account separately for its trunk and local businesses and publish interconnection agreements. For BT the ride is not going to get any easier.
Join our commenting forum
Join thought-provoking conversations, follow other Independent readers and see their replies
Comments