BT Brings City into Oftel Battle
Mary Fagan Industrial Correspondent, The Independent (London, England)
BT is preparing for battle with its watchdog, Oftel, with briefings for City institutions on the effects of proposed new price controls and other regulatory change.
The company has contacted or visited its top 20 to 30 investors over the last few weeks in what one source called an "educational tour". The move emerges only days after Sir Peter Bonfield, BT's new chief executive, promised a "roller coaster" year on the regulatory and competition fronts.
Relations between BT and Don Cruickshank, director general of Oftel, have reached an all time low. Some in BT believe that Mr Cruickshank is intent on breaking the company up. One source said: "Mr Cruickshank is not in favour of competition. He is in favour of BT's competitors."
The main subject of BT's City briefings have been the implications of the lower rate of return that Mr Cruickshank is expected to use in setting new price controls. There have also been discussions over his proposals to take on "sweeping" new anti-competitive powers.
BT must reach agreement with the regulator on both counts or face a reference to the Monopolies and Mergers Commission.
The proposals by Mr Cruickshank to take on a more general competition power - which he believes is vital for the development of the industry - is the most pressing issue for BT. …