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December 5, 1995

UK OFFICE OF TELECOMMUNICATIONS SEES SCOPE FOR RELAXATION ON BRITISH TELECOM

By CBR Staff Writer

The UK Office of Telecommunications yesterday offered British Telecommunications Plc the prospect of greater pricing freedom if it agrees to the regulator gaining greater power to act against anti-competitive behaviour. Director General of Telecommunications Don Cruickshank published a consultation document on possible new pricing rules for the sector after July 1997, and he is considering a broad cap on the charges that British Telecom is allowed to assess competitors for use of its network, in place of the detailed controls currently in place. His proposals would also remove some services from the main price control rules where there is the clear prospect they will be subject to competition. New services will not be subjected to price control in future, provided the regulator is satisfied that fair trading practices operate within the market. The overall price controls require phone bills to rise by 7.5 percentage points less than the rate of inflation – an inflation rate of 7.5% means that prices can be held, anything lower and they have to fall. Liberated services would be subject to a less severe cap, thus reducing the proportion of the company’s services restricted by the main control from the present 64% of the total.

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