The already strained relations between BT and telecoms regulator Oftel soured even further yesterday as the watchdog launched a formal competition inquiry into the company’s new internet service.

The package, which was to be launched on Friday, offers subscribers unmetered access to the web and flat-rate voice calls. Oftel is worried that BT may be “abusing its dominant market position” by subsidising internet services from its voice business, since rival ISPs might find it hard to compete.

Under the recent Competition Act, Oftel can fine companies up to 10% of their turnover if they are found to be acting in an anti-competitive manner.

BT declared itself “bemused” by the decision, vowing to go ahead with the service as planned. Commented chief executive Sir Peter Bonfield: “We strongly resist the suggestion that we are acting anti-competitively. All we're trying to do is to give our customers excellent value for money”.

News source: Financial Times