Ofcom is in the middle of a year-long review of the industry and in April launched a consultation examining the prospects and challenges for the sector now and over the next ten years.
According to David McConnell, chairman of the UK Competitive Telecommunications Association, which numbers AT&T, Centrica, ntl and Tiscali among its members, "British consumers have waited too long for true competition and hopefully that wait will shortly be over."
In the UKCTA's view, the way forward for the industry lies in the creation of a regulatory system that prevents BT from both abusing its dominance in upstream access markets and leveraging its market power into downstream wholesale and retail markets.
This regulatory system would be founded upon the objective of "equivalence": where BT is required to provide its access products to all market entrants, including its own downstream operations, to the same specification, at the same price and using the same processes.
To achieve equivalence, said UKCTA, Ofcom will need to require BT to demonstrate a far greater degree of transparency within its various operating divisions, to ensure that transactions between them and with BT's competitors are conducted on identical (equivalent) terms and conditions. This model is known as "transactional transparency".
However, the Association warns that implementation of transactional transparency will require some degree of organisational and structural reform, likely to involve improved accounting separation between BT divisions and possibly legal separation of the entities.
UKCTA fell short of recommending the separation of BT's residential service from its wholesale business, as has been put forward by other commentators. It explained: "In terms of creating the correct incentives for the regulated entity to treat all its customers equally, this structure would be optimal. However, it would be slow and difficult to achieve in the face of BT opposition."
Instead, said UKCTA, its proposals would result in a healthier, more competitive and dynamic telecommunications market. Regulation and the role of Ofcom should also become simpler and less intrusive than in recent years as competition flourishes, supported by a regulatory framework that prevents anti-competitive behaviour occurring.
BT has also revealed details of its submissions to the consultation, urging Ofcom to take a more targeted approach to regulation.
This, said BT, would move away from micro-regulation and would focus far more on bottlenecks and barriers to entry than on market share. It would also seek to encourage infrastructure investment instead of relying on mandated access to networks.
According to BT Chief Executive Ben Verwaayen: "Many markets are now extremely competitive and so there should be a relaxation of complex regulation particularly when new services are introduced and there are no barriers to entry. In return, BT accepts that there will need to be clear and focused regulation where genuine economic bottlenecks occur."
"Regulation has to reflect the realities of the market," he said. "Convergence is coming and consumers will soon make no distinction between fixed and mobile services for their voice calls, e-mails, text messages or use of the internet. Regulation of the fixed line market on its own is simply not relevant anymore."