The UK Office of Telecommunications, Oftel, is to scrap price limits on British Telecommunications Plc’s telephone line rental changes. The news was expected but regulator Don Cruickshank warned the company that he also intended to give his body more teeth and make its dealings more public. The price cap, which prevents British Telecom from increasing line rental charges by any more than two percentage points above inflation each year, has cost British Telecom millions of pounds in lost revenue, according to the company. It should be gone by next February. The shortfall has been made up largely from call charges and the access deficit contributions scheme whereby companies such as Mercury Communications Ltd compensates British Telecom for its requirement to provide a line anywhere in the UK. Mercury, which pays around ú60m each year, welcomed the move to scrap the scheme and the other proposals but called upon Oftel to ensure that competitors have a fair and equitable access to customers served by a British Telecom line. British Telecom said that it would consider offering new packages to customers, such as a higher rental charge with an accompanying reduction on international call charges. Cruickshank said that he intended to introduce a general condition in British Telecom’s licence to deal with anti-competitive behaviour, following a torrent of criticisms, he told Reuters. British Telecom’s director of regulatory affairs, John Butler, said that the company would want guarantees, including a separation of prosecution and judgement-making powers at Oftel before it could agree to a such a general proposal.
