Oftel Rolls Back U.K. Telecom Regulation

In a surprise move, the government agency that regulates the U.K. telecommunications industry, the Office of Telecommunications (Oftel), today announced its decision to scale back government oversight of the telecom market in favor of industry self-regulation.

"This is the most significant change in Oftel's approach to regulation since 1984," Oftel's director general of telecommunications, David Edmonds, said in a statement.

The move to roll back formal regulations in favor of a new "competition plus" strategy was taken in light of increased competition due to rapidly changing and converging technology and telecommunications markets, Oftel said. Such competition is the best protection for consumers, Oftel said in its 24-page strategy statement, "Achieving the best deal for telecom consumers."

The Oftel decision most directly effects British Telecommunications PLC (BT), the formerly government owned telecom giant.

"The U.K. is a highly competitive market. We're pleased that Oftel recognizes that and we welcome any deregulation," BT spokesman Simon Gordon said.

BT was not familiar enough with the details of the Oftel report to comment on specifics. "We are still looking through the document," Gordon said.

Beginning immediately, regulation will be "as light touch as possible" with "alternatives to formal regulation such as co-regulation or self-regulation being considered wherever possible," Oftel said.

The new strategy will also apply to existing regulations, which will come under review "to see if it continues to be needed," the report said.

Over the next three years, Oftel will undertake "major reviews of the telecom market," beginning with a consumer protection policy review beginning this month to asses the regulation of premium rate services, Oftel said. A review report on metering and billing will be published in March.

Pressure from consumer and industry groups along with Oftel led to BT's announcement last month of long-awaited flat rates for Internet access.

Beginning this spring, the flat rate service replaces the much criticized current per-minute charges, which have been blamed for blunting the U.K.'s competitive edge in the Internet economy. [See "BT Says Flat Internet Rates on the Way in U.K.," Dec. 7, 1999.] Last November Oftel ordered BT to upgrade and open all of its local telecommunications network lines to competing companies by 2001. Oftel also directed BT to upgrade the "local loops" to handle new broadband digital services such as DSL (Digital Subscriber Line) by July 2001. [See "U.K.

Regulator Tells BT to Open Networks," Nov. 30, 1999.]Oftel, located in London, can be contacted at +44-171-634-8750, or at http://www.oftel.gov.uk/. BT, located in London, can be contacted at +44-171-356-5000, or at http://www.bt.com/.

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