Don Cruickshank, the director-general of the UK Office of Telecommunications has sounded off on anti-competitive behaviour in the national telecommunications market, admitting that his organisation’s attempts to be more proactive in monitoring abuses of dominant market positions have had only limited impact. His remarks come amid mounting pressure from Mercury Communications Ltd and other companies for the introduction of immediate sanctions – including the imposition of fines – if a company abuses its market power. Oftel had not made as much progress as planned in this area, with companies hurt by anti-competitive practices having to wait too long for action and redress, Cruickshank says in the regulator’s Annual Report for the year to December 32. However, he warned that Oftel is now in consultation with interested parties on its powers and procedures, with the firm aim of improving its effectiveness as a licence enforcement agency and fair trading authority. Moreover, in an echo of British Telecommunications Plc’s comments to the European Commission on regulatory legislation last month, he said that detailed regulation of the industry could only be reduced if practices that might restrict competition could be controlled. Generally, however, his tone was combative towards British Telecom. He said that emerging competition in the marketplace was not harming the company, noting that it remains as profitable as ever and is becoming increasingly confident. He also stated that, despite of opposition from BT, Oftel was determined to ensure that customers would be able to keep their numbers when switching from BT to another company: the introduction of number portability was Oftel’s single most important aim, said Cruickshank, adding that he hoped to see it widely available to customers by the end of the year. Last week British Telecom refused to accept the amendments to its licence that are needed for number portability, saying that it supported the concept but could not accept Oftel’s view that it should bear the cost.
Monopolies Commission
As a result, the issue is being referred to the Monopolies & Mergers Commission. In the report Cruickshank also said that he would start work this summer on a new price control regime for British Telecom, to take effect in 1997 when the present cap – inflation minus 7.5 percentage points – expires. He further suggested that there may in future be different price caps for different services – much to BT’s chagrin, as it argues that the cap should be removed entirely to allow the market to dictate prices. Looking to the future, the report also eyes the Information Superhighway and raises the question of rights in a multimedia world with converging technologies. Now that the phone system is being used as the access route to unlimited stored messages, pictures, data and sound, not all of which are owned by the owner of the telephone system, there will have to be a sharper distinction between leasing the transport system and accessing the service provider, says Cruickshank. He added that principally the Office needed to consider what rights the customer, the service provider and the owner of the transport system must have in order to ensure that access is open, diversity is guaranteed and innovation encouraged.
