Telecom regulator Ofcom has ruled that BT abused its market-leading position in residential broadband services and has contravened the Competition Act because of its pricing policies.
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Ofcom has asked BT to respond before it takes action. BT’s residential broadband services are used by remote workers and home workers, and they are now facing either price increases for BT services or cheaper prices for alternative products from BT’s rivals.
Ofcom said BT priced its BT Openworld and BT Broadband services so low that competitors who rely on re-selling BT services could not properly compete. The complaint was originally made by Freeserve before it re-branded as Wanadoo.
Increasing prices on BT products would prove controversial however, as UK users are already currently paying higher charges for their broadband than many other major nations. The alternative is to make BT slash its wholesale prices.
A BT spokesman said, "We remain confident of our position - that our services do not infringe the Act as the complainant suggests. On two previous occasions they have made these claims, and the regulator has come down on our side."
Ofcom is likely to decide on BT’s punishment by the end of the year.