The investigation was the result of a complaint by rival telco
Wanadoo, formerly Freeserve, in March 2002. It alleged that BT
Openworld created an unfair marketing campaign, including predatory
price offers, based on advance notice from BT of the 40% price
reduction of wholesale broadband access.
Ofcom's predecessor, Oftel, cleared the teleco of all charges on
two occasions, but Freeserve appealed. In April last year the
Competition Appeals Tribunal ruled that Oftel should reinvestigate
the allegations, which it did.
Ofcom announced yesterday that it is likely to find that BT
residential broadband pricing did in fact breach competition laws.
The watchdog has therefore sent BT a Statement of Objections
stating the facts of the case, the matters to which it has taken
objection, the action it proposes, and its reasons.
It is, according to commentators, the first time that a
Statement of Objections has been sent by a regulator to any company
since the Competition Act 1998 came into force.
BT now has the opportunity to make written and oral
representations in response to Ofcom's proposed decision. These,
said Ofcom, will be taken fully into account before any final
decision is made.
In a statement BT commented, "This is a long-running case that
has already been going on for over two years and in which BT has
already been cleared twice."
"The case involves complex legal issues which will take time to
resolve and we will continue to work with Ofcom over the coming
months to bring this matter to an equitable conclusion," it
added.
