BT said yesterday that it would pay just over £10 million to comply with a retrospective broadband price cut imposed on it by Oftel, the telecoms regulator. The cuts affect BT’s £100 million-a-year business in “partial private circuits” — high-speed connections that it sells to other operators to help them to fill in gaps in their own networks.
However, there is no guarantee that the beneficiaries of the price cut will pass on the reduction to their own customers, which in this instance tend to be larger businesses that use high-speed internet links.
The carriers that will benefit principally are Cable & Wireless, Energis, WorldCom and Global Crossing. No cash will change hands between the operators. Instead, BT will give credits against future bills.
David Edmonds, director-general of Oftel, said that the reductions would act as “a springboard to boost competition”, allowing “other operators to compete fairly with BT”.
BT’s competitors welcomed the proposals but said that the cuts had taken more than a year to implement. A spokesman for business carrier Thus said: “This is broadly positive but it would have been nice if it had come a little earlier.”
The price cuts amount to 50 per cent for connection costs and 20 per cent for line rental and would be mostly backdated to when the service was introduced on August 1, 2001.
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