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.