Ofcom proposes freeing BT from domestic price controls

21 Mar 2006

UK fixed line incumbent BT is to be allowed to set its own domestic phone charges, 22 years after price controls were first imposed, under new proposals by communications watchdog Ofcom. Under the proposals – which are subject to public consultation – all phone companies, including BT Group, will be free to set their own prices and compete for customers in future. If approved, the changes will take effect from 1 August 2006. ‘Ofcom believes it is now appropriate to consider allowing existing retail price controls to lapse as increasingly effective competition between providers continues to drive down costs to consumers’, the regulator said in a statement. ‘These developments are also taking place against a background of continued growth in the market for mobile services.’ The changes will remain in place until the end of 2007 alongside existing statutory requirements from BT under its Universal Service obligations. The deadline for responses is 30 May 2006 and the full consultation document is available from: http://www.ofcom.org.uk/consult/condocs/retail/

Meanwhile, BT has begun taking registrations of interest for its planned national next generation TV service, BT Vision, to be launched in the autumn. The service will combine digital terrestrial TV (DTT) broadcasts delivered to the home via aerial with on-demand film, TV and music programming delivered via DSL, as well as interactive services. The software platform is being developed by Microsoft whilst set-top boxes are being supplied by Philips. Unlike other pay-TV services, there will be no mandatory monthly subscription.

United Kingdom, BT Group (incl. Openreach)