Oftel tries to force BT's hand over net access debate

The telecoms regulator published a consultation document which lays out new guidelines over the way BT should charge its rivals for access to the local loop.

Currently, BT charges ISPs on a per second basis for calls running through its local loop exchanges under a tarrif known as Friaco. ISPs then have to face additional costs to transfer the calls onto their own networks.

This means ISPs offering unmetered access have to subsidise users. World Online believes it was subsidising its unmetered access users as much as £700 per user per month before it scrapped its offering in September.

But Oftel said today that BT must provide other operators with a new wholesale flat rate internet access product from February, which goes above and beyond the current Friaco tarrif.

The new product will carry internet traffic on an unmetered basis all the way from consumers' homes to the ISP's network.

BT had argued that its own network could not cope with more traffic and so had opposed flat rate pricing. Oftel investigated these claims and found that BT could cope as long as the roll-out was handled correctly.

With this in mind, rights to flat rate access will be offered up to ISPs on a limited basis, requiring payment in advance to avoid predatory tactics by companies trying to 'reserve' all available nodes for their use.

A spokesman for the Internet Service Providers' Association said: "Oftel's document is a useful next step away from the pence per minute pricing system. It is moving towards what the industry has been asking for. The whole industry will be studying it carefully. This is not a major breakthrough, but it is a step in the right direction."

The Oftel proposal is a only consultation document, but it is confident that it will become a blueprint for BT to start offering the service by the start of February 2001.

By Nik Hole