End to Price Controls Urged

British Telecommunications PLC
16 November 1999

            BT URGES AN END TO PRICE CONTROLS

The UK should move away from price controls in

telecommunications and rely on competition and general

competition law to bring benefits to users, BT said

today.

     In its submission to Oftel as part of the Price

Control Review consultation, the company said that its

evidence demonstrated clearly that the vast majority of

consumers already enjoy the direct benefits of

competition.

     Mike James, head of the review at BT, said: 'All

consumers can choose from a variety of call providers.

The dwindling minority who do not enjoy competition for

their exchange line share fully in the benefits of

competition through the workings of  universal service

practices, which protect customers far more appropriately

and directly than price caps.'

     In the document BT goes on to argue that the

continuation of inappropriate retail price controls is

not in customers' long-term interests.   These only

distort the market,  encouraging the wrong type of

competitive entry, discouraging investment and innovation

by others, and as a result hindering the development of

sustainable competition.

     The company acknowledged that issues in the

wholesale markets are more complex.  However, Mike James

said:  'These markets are becoming sufficiently

competitive for many, if not all, of the price controls

to be removed by 2001 if not before.'