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.