BT's broadband price cuts are "anti-competitive"

The only company still involved in the local loop unbundling process believes that BT's recent broadband price cuts are anti-competitive.

Bulldog Communications has taken legal advice and believes Oftel has failed in its duty to ensure full competition in the market.

Bulldog is the last remaining company trying to compete with BT's consumer ADSL by placing its own equipment in BT's local exchanges.

Margins in the consumer ADSL business are so low that few people believe that a company like Bulldog could compete with BT's current price of £25 per line.

Now that BT has cut wholesale broadband prices to below £14.75 from 1 April, it will become increasingly difficult to compete with BT Wholesale and the ADSL services it supplies to around 200 ISPs such as BTopenworld, Freeserve, Pipex and Zen.

Bulldog complained to the telecoms regulator Oftel that the price cuts announced a month ago are anti-competitive, effectively handing BT Wholesale a monopoly of the ADSL market. But Oftel announced today that it would not be taking action.

Bulldog said in a statement: "Bulldog fundamentally disagrees with Oftel's findings and has obtained independent legal advice that unequivocally supports Bulldog's position that BT has acted anti-competitively.

"Although Bulldog firmly believes that it has extremely strong grounds on which to challenge Oftel's findings and BT's behaviour, Bulldog is not pursuing such a course of action at this time. This is because Bulldog is currently engaged in a constructive bilateral dialogue with BT with a view to reaching an alternative workable solution.

"Bulldog remains cautiously optimistic that a win-win situation can be achieved with BT. However, if this bilateral process fails, we intend to review our position with our shareholders."

A Bulldog spokesman declined to specify exactly what the win-win situation would constitute, but it would have to "improve the competitive environment".

This would mean BT Wholesale raising its prices, or finding a way to cut the cost of Bulldog's access to its local exchanges.

However, there doesn't seem to be much room for manoeuvre. A spokesman for BT wholesale said: "As we said when we announced these price cuts a few weeks ago we are absolutely confident that they reflect the costs that we need to cover and this has been borne out by Oftel's announcement. We are delighted to talk to Bulldog and indeed any other unbundlers. Our door is always open."

"It would be absurd to think that we will put the prices back up. Everyone has accepted that this is a good thing. We have already got a well scrutinized structure for LLU. We have taken many initiatives to reduce the costs of unbundlers and we will continue to look for new initiatives in the future. We do however need to cover our costs."