Blow for BT on broadband pricing

13 April 2012

TELECOM regulator Ofcom has ruled that BT infringed competition rules by offering residential broadband at prices too low for rivals to match.

Ofcom today said that, following a complaint from what was then Freeserve in 2002, it has found that BT infringed UK competition law and European Commission rules prohibiting anti-competitive behaviour by companies that are dominant in their markets.

BT still accounts for almost seven out of every 10 residential phone lines in the UK and has already signed up more than a million customers to broadband, the high-speed internet service that has been spreading rapidly in the past couple of years.

Last week it was also ordered by Ofcom to cut the prices it charges rivals for delivering wholesale access to broadband services.

The market is becoming increasingly competitive with Wanadoo, the French internet group that took over Freeserve, launching a £17.99-a-month service for broadband access compared with the £29.99 charged by most rivals.

Under the UK and European Union legislation, Ofcom could order BT to bring the infringement of its monopoly position to an end and incur a financial penalty.

BT can challenge Ofcom's decision, and a spokesman said: '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. We remain confident of our position.'

Shares in BT were down 1 1/2p at 181 1/2p by mid-morning.

BT today launched one of its biggest-ever advertising campaigns, aimed at businesses. It will spend £26m over the next six months taking on the likes of IBM, Accenture and Hewlett Packard all around the world.

The multilingual campaign is aimed at senior business and government executives, telling them that BT is one of the biggest players in the information technology and networking services markets.

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