Ofcom slammed for BT let off

UK regulator Ofcom faces scathing criticism for failing to penalize incumbent BT, despite ruling the firm induced a margin squeeze in the wholesale market.
 
The regulator last week ruled that BT failed to maintain a reasonable margin between its up and downstream wholesale prices between July 2008 and April 2009, but claimed there was insufficient evidence of the telco abusing its dominant position in the market to take any further action.
 
Ofcom’s decision prompted a scathing attack on its ability to regulate by Bob Falconer, chairman and chief executive of UK based communications and software services provider Gamma – one of two firms to raise a complaint against BT.
 
“We really are very disappointed with Ofcom over both the timescales and the appeasing nature of the final decision…Our view is that this demonstrates a failure to regulate the market in an effective and timely way. It appears to give a green light to market abuse so long as a dominant player’s competitors are crippled rather than completely destroyed.
 
“Unfortunately we feel we can no longer rely on Ofcom to create a level playing field,” Falconer states, adding that the firm will respond to the decision in a matter of weeks.
 
The other complainant, Thus, was acquired by Cable & Wireless in 2H08

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