Industry calls for BT sanctions

BT has been consistently criticised by its competitors, particularly over the introduction of broadband where, they said, the operator failed to open up local loops and set wholesale prices that made alternative broadband offerings uncompetitive.

This new call comes ahead of BT's response to Ofcom's proposals on the regulation of the fixed-line telecoms sector, due Thursday.

The proposals will set the agenda for future competition in the market and, hopefully for BT's competitors, introduce new competitive regulations into the market, particularly concerning broadband and cheap voice over Internet (VoIP) phone calls.

"The concern is that parts of the BT organisation will continue to prevaricate and delay: Ofcom and the industry must not allow itself to be dragged into endless detailed discussions as to what exactly "equivalence" is," said David McConnell, chairman of the UK Competitive Telecommunications Association.

Chief executive of Ofcom Stephen Carter told the Westminster Media Forum last week that if the regulator was not convinced that BT was showing the necessary level of co-operation, Ofcom would opt for the "nuclear option" and refer the industry to the Competition Comission. Such a move could lead to the break up of BT and see the operator's retail and wholesale divisions removed.

VoIP is currently being billed as way for consumers to make free phone calls, or at least at a greatly reduced rate. The issue of VoIP may prove to be something of a ticking time bomb for BT. At the moment, the vast majority of consumers are unaware of the cost savings the technology could offer them.

However, last year, BT chief executive Ben Verwaayen, in an interview with the BBC, stated that the company would in the future switch to a subscription model, charging consumers for access to its network, rather than for itemised phone calls.

There is a concern that any subscription fee would aggregate calls costs and absorb them into the fee, thereby removing any cost saving to the consumer while boosting BT's profitability.