Ofcom has admitted that BT is still failing to give its retail rivals fair and equal access to its telecommunications network, and threatened the telco with a full legal investigation.
In a damning indictment of the performance of the former telecoms regulator, Ofcom said on Thursday that competition in the UK telecommunications market is "fragile", despite two full decades of regulatory intervention.
Ofcom is proposing that BT changes its existing mechanisms and processes to give its competitors the same access to its wholesale network, at the same price, as BT's own retail arm.
If BT doesn't play ball, Ofcom will launch an investigation under the Enterprise Act, which could result in the Competition Commission getting involved.
BT has argued in the past that it provides a level playing field -- but many rivals have disputed this claim.
"Twenty years after liberalisation, the market has made good progress. However, its foundations are unstable in parts, overly dependent on intrusive regulation and with limited sustainable competition," said Ofcom chief executive Stephen Carter.
Carter's comments were delivered in the phase two proposals of Ofcom's Strategic Review of Telecommunications , which was published on Thursday morning.
This review is a major investigation into the UK telecoms market. It has concluded that the market is flawed in two ways -- its structure is "unstable" and dominated by BT, and 20 years of regulation have resulted in a "complex regulatory mesh".
BT said on Thursday that it would welcome a move away from the "micro regulation" that Ofcom has identified as being bad for consumers.
"We believe the 'new regulatory contract' which Ofcom describes has the potential to encourage investment and innovation," said a BT spokesman.
Talkback
Isn't the problem down to the regulator themselves; just look at C & W, previously known as Mercury, what did they invest?
Poor old BT - invest money as a business, only for the government, in the form of the regulator, to want to give it away to the competition - it doesn't make economic sense and has not happened in the other utilities.
It has been down to years of weak BT management that has allowed this situation to develop into what it is now, the government should have been challenged sooner.
What has happened is that companies have NOTwanted to install infrastructure and when they have it's been for a poor return, such as with the cable companies. Could you imagine mobile networks giving access to base stations and the call routeing being made elsewhere? No
I am totally in afavour of competition and not that pro BT, but gravy train regulation does not produce what the UK needs, it stifles growth and discourages investment, what we need to see is more dynamic entrants into the market and also take the shackles off BT, for if they can do it better and most importantly cheaper let BT operate that way.
hi. whilst not being totally up to date with everything going on, i am aware of quite a lot, and it seems to me that everyone completely overlooks a major factor in bt having such a large market share, and difficulties in making everything a level playing field. BT was started as a nationalised telephone company, and had a near 100% market share (only kingston comms had a piece of the action). BT also have a mandate to supply a telephone service to everybody in the country (or along those lines). name one other telcoms company with that restriction... going from state monopoly to privatised company is always going to cause long term probs (british rail anyone?) at least BT havent let the phone systems fall apart at the seams. i freely accept that i may talking shite due to not being totally in the know, but everyone seems happy to que up and slate them, how about sayin somethin nice for a change? if it wasnt for BT, you wouldnt have the level and quality of service you do get. and their customer service is without a doubt the best i have had from any company (ntl, aol, talk talk, onetel and cable & wireless to name a few....) try cancelling an ntl contract! 30 days notice to stop a phone?