Heavyweights clash over telco Web charges

Fears that European telcos are overpricing their Internet connections came to a head this morning, as two of the most powerful men in the industry presented contradictory evidence to the UK government.

While BT's chief executive, Sir Peter Bonfield, claimed high connectivity charges do not prevent people from going online, John Higgins, director general of the Computing Services and Software Association (CSSA), presented a study from Cap Gemini which shows a direct correlation between dial-up prices and Internet access.

The Parliamentary Trade and Industry Committee is hosting a series of public hearings on electronic commerce, before publishing a consultation paper on the subject.

A BT spokeswoman said: "BT's own research shows that Internet take-up is not dependent on connectivity prices. Sir Peter explained to the parliamentary committee this morning that in Germany, where connectivity charges are higher than here, there is no difference in Internet take-up."

But Cap Gemini's Condrinet study cites telco prices as one of the main remaining barriers to electronic commerce, along with Internet service provider charges, equipment costs and public perception. Cap Gemini ecommerce director, Bob Scott spoke to Silicon.com after he had submitted his study to the committee. "The only way the UK will be on a level playing field with the rest of the world when it comes to ecommerce is if businesses and consumers have a competitive connection price," he said.

Alan Boxer, MD of e centre, said today's fiery debate showed that last summer's lobbying by Intel CEO, Crag Barrett, had paid off. "I doubt he was over here for his health," Boxer told Silicon.com: "It looks like he was lobbying government for cheaper Internet access."

But BT cannot lower its prices without endangering its fragile relationship with telecoms regulator, Oftel. "If a telco wants to run an unmetered service we would have no problem with it," said an Oftel spokesperson last month. "But if that telco were BT, we would have to see a breakdown of its pricing structure to make sure it would not force other telcos out of business."