Oftel plan sparks bitter BT clash

Watchdog powers: Regulator says new proposals will enable UK 'to keep ahead of liberalisation in the rest of the world'

BT yesterday clashed openly with Don Cruickshank, director general of the industry watchdog Oftel, over his pursuit of "sweeping" new anti-competitive powers. The company, which faces a reference to the Monopolies and Mergers Commission if it fails to reach some agreement on the issue, said that the extension of Oftel's powers in this area, as detailed in a document published yesterday "should be a matter for Parliament".

Alan Rudge, BT's deputy group managing director, said: "The new powers which the director general proposes to take for himself would give him virtually unchallengeable power to decide that anything done in the British telecommunications industry was anti-competitive. He would have almost absolute power, with no right of appeal to the courts or other interested body for impartial analysis if he gets the facts wrong or his decision is mistaken."

BT added: "The director general seems to have it in mind to go into a whole range of activities that would not normally be considered anti-competitive, such as innovation and the introduction of new services." The company also attacked the proposals as "assymetric" singling out BT for regulation with no guarantee that its rivals would be treated in the same way.

Mr Cruickshank's plan, which he says is in fact "deregulatory" is to put into BT's licence a general anti-competitive provision, replacing some of the dozens of individual conditions which at present govern BT's behaviour and which, according to Oftel, make investigation and action extremely difficult and time-consuming. He said that any future relaxation on BT's price controls or reduction in other regulations would not be possible until such a safeguard is in place.

Although Mr Cruickshank is consulting on the detail, he made clear his determination to go ahead.

"There are no options here. This is a statement of a single proposal and how it would be applied. It seems to me that - where the market is and where it is going - unless we do something like this we run the distinct danger of holding back competition," he said.

Mr Cruickshank argued that he is doing no more than making use of the powers accorded by Parliament. He added: "This is probably the most important step we can take in the UK to keep ahead of liberalisation in the rest of the world."

The latest statement by the regulator is the culmination of a year in which relations between Oftel and the company appear increasingly strained.

The pre-Christmas missive comes only days after BT was ordered by the MMC to pay the lion's share of the pounds 220m of costs when customers switch to its competitors but wish to keep their existing telephone numbers. Mr Cruickshank said that the arguments over "number portability"were one example of how the existing arrangements frustrate his ability to regulate.

He said that another area of concern was BT's ability to delay the introduction of new services by rivals which need to use its wires. He said that the "accumulation of certain actions by BT" could result in problems for competitors which are "extremely difficult to get at under BT's licence."

John Butler, director for regulatory affairs, said that the proposals put forward yesterday result in unacceptable uncertainty for BT. "We have no way of knowing how the director general - or any future director general - would implement them. It is an enormously wide power - a very wide discretion with no separate court and no right of appeal to go to anybody else for an objective and dispassionate view of the case."

Mr Butler declined to comment on whether the matter would end up with the MMC.

The cable television industry was swift to welcome the proposals as an important boost for competition. A spokesman said that the situation as it now stood lacked the certainty of "effective and timely control" by Oftel.

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