OFTEL Decision Safeguards Free Net Access For 2˝ Years

The UK telecommunications watchdog, OFTEL, has decided not to change the current telephone pricing system which has enabled the rapid growth in free internet access services over the recent months. In a long-awaited consultation (see OFTEL Consultations To Examine ISP Phone Pricing), OFTEL today said that it will not alter the revenue pricing system of telephone calls to the internet for another two and a half years when BT’s price controls are reviewed.

This means that free access services such as Dixons’ Freeserve, currently the UK’s largest ISP with over a million accounts, will be able to continue without incurring extra connecting costs.

However, BT has argued that the increase in ‘phone traffic through its networks has driven up its operational costs without significant return and is hoping for a greater share of call revenue to cover this. OFTEL has said that there should be some change to BT’s share of revenue to reflect these changes in costs. Additional measures have been proposed that could result in the price of some calls to the internet being less than the current local call rate, says the watchdog.

Commenting on the document, David Edmonds, director general of telecommunications, says: “Enabling the huge growth in use of the internet to continue has been a key factor in my consideration of this dispute between the telephone operators that OFTEL is ruling on. A decision potentially increasing charges to consumers is not justified on the evidence I have considered.”

Edmonds goes on to say that free ISPs should be able to vary the price of their telephone calls according to the service they provide. An advertising and sponsorship-funded site, for example, could potentially have a call cost lower than the current local rate; a more specialist site may have a higher cost that its particular users were willing to pay for.

“BT will introduce new pricing points toward the end of this year which will enable this greater variety of charge rates to take place… I believe our proposals strike the right balance between supporting the growth of internet use, and meeting the needs of the telephone operators and internet service providers to generate the funds necessary to allow additional investment in their respective networks to cope with this growth,” he says.

OFTEL: 0171 634 8700