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Freeserve says BT's broadband advantage isn't fair

ISP files complaints about marketing strategies and other benefits held by telco

ISP Freeserve today filed a complaint with the Competition Commission about Oftel and its handling of the way BT markets and sells its broadband services.

Freeserve feels that BT, which currently has around 70 percent of the market for residential phone lines — a legacy from its days as a state-owned monopoly — has an unfair advantage over other UK ISPs. Specifically, Freeserve is complaining about BT's ability to market its products via home phone bills, the so-called Blue Bill, and its free customer support line, 150.

Back in May Freeserve accused Oftel of "gifting BT" with "an anti-competitive advantage" and demanded the watchdog stopped BT from charging or marketing its 'no frills' broadband product to customers through its Blue Bill system.

"Oftel would have us believe that all is rosy in the UK's broadband market with consumer takeup now gathering pace. But market growth must not be at the expense of true competition," said David Melville, Freeserve general counsel.

"Nobody has any interest in seeing BT monopolise this important new market the way it does telephony, least of all consumers who will see prices fall more slowly and service quality inevitably suffer," he added.

Oftel released a report with guidelines for BT to adhere to, supporting Freeserve's claims that it should not be allowed to tout for new broadband customers through blue billing.

"We said we would act as a mystery shopper regularly monitoring BT's behaviour, which we have been," said a spokesman at Oftel. "As far as we are aware BT has not been acting outside these guidelines."

BT has categorically denied acting outside the guidelines.

At present most ADSL customers will receive two bills — one for line rental from BT and one for calls from their ISP — which can create confusion for customers and could perhaps encourage them to buy from BT simply to cut down on such hassle.

Freeserve's latest complaint is based on two reports, the first by Dr Chris Doyle at Warwick Business School, which stated that BT's dominance in the market could end up costing consumers £100m over five years. The second, an assessment of the development of broadband by economics experts, Frontier Economics, which examines the advantages BT still retains over competitor ISPs.

Despite Freeserve's complaints, BT today gave itself a pat on the back for the imminent rollout of 10 new exchanges under its demand registration scheme. The first customers to benefit from the scheme will receive ADSL services in mid-November.


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