The Telecommunications User Association has made its recommendations to the UK Office of Telecommunications on how British Telecommunications Plc’s services should be tariffed in the future. Departing director general Sir Bryan Carsberg, speaking at the launch of the Association’s handbook, gave a deal of encouragement, agreeing with many of the proposals. As reported in The Independent, among the points Sir Bryan made in his talk – which the Telecommunications Users Association is anxious to emphasise was off-the-cuff – was that in terms of accounting procedures, he believes that British Telecom must move to a separation of of its local and long-distance businesses. Carsberg stresses that in advocating this move following user concern, he is not advocating the break-up of the company. According to Vivienne Peters, chief executive of the Association, the precise nature of Sir Bryan’s talk was not known beforehand, but it fits very nicely with the Users Association’s own views. She was also fairly confident that Sir Bryan will put his words into action in his discussions with British Telecom. The Association’s own suggestion is that BT should have individual price caps rather than the basket formula used at present. By lumping local, national, and international services together, says the Association, BT has too much flexibility to reduce the prices of the latter two at the expense of local calls. While this linediffers from the statement made by Sir Bryan, the end result of the two plans should essentially be the same, with BT being called to account over the constituent parts of its service, rather than over a bundled package. The Association wants to see more encouragement for competition in the local loop which it believes could be achieved through a lowering of interconnection costs, and by giving tax incentives to small, local telecommunications licence holders. In common with other consumer groups, it wants to see a lowering of the connection charges to British Telecom’s service, saying that there is a large level of subjective judgement in allocating costs to services, and that call revenues should be more closely tied to connection charges. The Association agrees with Oftel that the unknown element in the pricing equation should be related to volume of traffic carried, but that there should be additional price reductions for very large users that generate significant volumes of traffic. Conversely, it feels there should be separate price controls for residential and business users because BT does not expect to get much revenue from the first, and has little incentive to increase the level of penetration in this sector.
