By Tim Richardson for The Register
This article has been reproduced from The Register, with
permission.
The "legally-binding undertakings" 230 of them to be
exact – form part of a regulatory settlement with communications
watchdog Ofcom. Had BT and the regulator failed to reach agreement
it could have led to the break-up of BT.
Instead, the deal is being billed as a new chapter for the UK's
telecoms sector and should help create a level playing field for
telcos in the UK.
Announcing the deal today Ofcom said that BT "has agreed to
substantive structural, product and governance changes, affecting
both its current and future networks".
If the regulator has got it right, BT should no longer be able
to abuse its position as the UK's dominant fixed line telco at the
expense of competition.
Key to the new deal is the creation of a new access services
division within BT called Openreach which will ensure that all
telcos get equal access to BT's network.
Ofcom is confident that the new separate division which
will provide access to the local loop, for example and be overseen
by an independent body will allow "all communications
providers to gain real equality of access to critical BT
infrastructure on fair and equal terms".
The regulator also reckons this new set-up will encourage
investment in infrastructure and promote innovations while leading
to greater competition, lower prices and improved services.
"After a full year of detailed consultation, Ofcom has accepted
BT's commitments. The new management of Openreach and the Equality
of Access Board must now deliver and be seen to deliver,"
said Ofcom chief exec Stephen Carter.
Today's settlement comes follows Ofcom's strategic review of the
UK's telecoms industry. Rival operators have long complained that
BT Retail was
given preferential treatment by other parts of the BT organisation
at the expense of others. They also complained that BT dragged its
feet over the introduction of new technologies.
In a report published in the summer Ofcom highlighted some of
those concerns.
"Ofcom suspects that competition is being restricted in markets
for the supply of wholesale access and backhaul network services in
the context of electronic communications in the United Kingdom and
on directly related downstream retail markets," it said in one
document.
Another said: "Ofcom believes that the combination of ...
upstream market power and vertical integration provides BT with
both the ability and the incentive to discriminate against its
downstream competitors, who are also its wholesale customers.
"Moreover, Ofcom suspects that BT may have engaged in conduct
which has had the effect of restricting competition."
© The Register 2005
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