British Telecom and telecoms regulator Oftel were this week facing the prospect of legal action from UK operators as the row over access to BT's local exchanges intensified.
With the Government's goal of high-speed Internet access in increasing disarray, Oftel also came under fire from European Commission officials for letting BT dictate access to local exchanges, in the unbundling programme.
Earlier this week telecoms giant Global Crossing decided not to enter the bidding process for BT's local exchanges, citing cost and regulatory barriers.
Meanwhile, the pressure on Oftel intensified after a survey of telecoms managers said that Oftel had failed to deliver effective competition.
The escalating row centres on the requirement for BT to open up its local exchanges to rival operators, in a bid to liberalise the UK telecoms market and speed up broadband Internet access, a key government target in making the UK a competitive environment for e-business.
But BT angered local operators earlier this month after it said that DSL competitors would be "locked out" of about 300 blacklisted exchanges, for the first wave of local loop unbundling, due next July.
BT said locations were exempt due to problems in allowing other companies access to the building or because the exchange was full.
A group of telecoms companies, including Kingston Communications, were earlier this week considering legal action against BT and possibly Oftel.
The criticism of Oftel, could not come at a worse time for the regulator.
Later this year, the Government will publish a discussion White Paper in a review of the regulatory system for the broadcast, telecom and IT industries. This has fuelled speculation that the Government will scrap Oftel by merging it with other communication watchdogs.
Research released this week by the Communications Man-agement Association (CMA), formerly the Telecommunic-ations Managers Association, has turned up the pressure on Oftel. Eight out of 10 (78%) UK communications professionals said Oftel had failed to deliver effective competition across the UK. The roll-out of broadband (ADSL) service was too slow for 86% of those questioned. The same number also called for universal access to broadband on demand.
David Harrington, director-general of the CMA, called on the Government to launch a review into the controversy surrounding local loop access but stopped short of calling for Oftel to be axed.