2 July 05: Ofcom sends BT a second Statement of Objections over residential broadband pricing.
On 28 June Ofcom announced that it had sent a second Statement of Objections (SO) to BT stating that it intends to find that the company has infringed the Chapter II prohibition of the Competition Act 1998 and Article 82 of the EC Treaty in relation to its residential broadband pricing. Ofcom is assessing whether BT has operated a margin squeeze through the pricing of its residential broadband services since June 2002. The second SO expands on the first sent to BT on 31 August 2004. In particular, Ofcom has incorporated BT’s latest consumer broadband product, BT Broadband Basic, launched on 1 March 2004, into the investigation. The investigation therefore now covers an assessment of BT’s pricing policies for its range of residential products, namely BT Openworld, BT Broadband, BT Yahoo! Broadband and BT Broadband Basic.
Freeserve (now Wanadoo UK) made the original complaint to Ofcom's predecessor Oftel in March 2002, which Oftel dismissed. The complaint alleged that BT was conducting 'an orchestrated campaign of anticompetitive behaviour, aimed at achieving dominance in the market for retail broadband (ADSL) services,' in breach of the Competition Act. Following Wanadoo UK’s appeal of the Oftel decision, on 16 April 2003 Ofcom was ordered by the UK’s Competition Appeals Tribunal to reconsider Wanadoo UK's pricing complaint against BT.
Market Analysis was retained by Wanadoo UK in April 03 to provide expert economic evidence in the case, and will continue to assist throughout the ongoing Ofcom investigation.