BT and Ofcom – the Old Firm re-match

Ofcom has announced a Competition Act investigation into BT's new charges for line rentals and calls.

The watchdog acted after complaints by 13 stakeholders including other operators. The other operators are concerned that the increase in charges for line rental will squeeze their margins and make them less competitive.

Ofcom said it is considering "as a matter of urgency" the case for seeking interim measures under the Competition Act. It promised to rule within four weeks as to whether BT had broken the rules aimed at stopping it abusing its dominant position in the fixed-line phone market.

Pierre Danon, CEO of BT Retail, said in a statement: "We are extremely confident that our new customer propositions are wholly in line with our legal and regulatory obligations."

He also promised to co-operate with the investigation.

The regulator pointed out that almost three million households have switched to CPS (carrier pre-select) services, under which they pay BT line rental but pay another company for their calls.

The new BT tariff moves all household accounts to its cheaper call rates, but boosts line rentals by £1 a month.