Oftel's consultation follows a review of competition in the
market for national leased lines. Leased lines are permanently
connected communications links that are used by business and other
operators for services such as voice and data traffic and internet
access.
Oftel found that competition was not effective in the retail
market, resulting in inflated prices. Oftel says it proposes to
tackle this by taking action at the wholesale level. Among the
options put forward for consultation is “targeted price control” of
the wholesale leased lines to be provided by BT.
David Edmonds, Director General of Telecommunications said:
"Oftel's analysis shows that the main
problem lies in the wholesale market. Our proposals are for
regulation to address this. Subject to the consultation, I consider
that targeted price regulation of a wholesale leased line service
to be provided by BT is likely to be the most appropriate
regulatory action. It will ensure that other operators can purchase
wholesale leased lines at prices which will enable them to compete
effectively.
"Currently UK prices for leased lines are in
line with average European prices but are much higher than those in
the cheapest countries and in the US. I believe that my proposals
will significantly increase competition in the market and result in
more competitive prices."
Oftel's consultation will run until mid-November after which a
statement with firm conclusions will be published.
