Oftel to reinvestigate alleged predatory pricing by BT Openworld

Freeserve alleged in March 2002 that BT Openworld created an unfair marketing campaign, including predatory price offers, based on advance notice from BT of the 40% price reduction of wholesale broadband access. Oftel cleared the teleco of all charges, but Freeserve appealed.

The Tribunal yesterday upheld Oftel's decision on three of the four allegations: cross marketing between BT and its subsidiary; advance notice of price reductions being given to BT Openworld and BT using its telephone census to benefit of Openworld.

However, it did not accept Oftel's explanation for clearing Openworld on the allegation of predatory pricing, finding that Oftel failed to explain its position.

In a statement issued yesterday, Oftel confirmed that it "has undertaken to re-examine this aspect of Freeserve's complaint in the light of the tribunal's comments on the detail of the decision." But the regulator underlined the fact that "the tribunal has not commented on whether the reasoning in the original decision was correct".

Freeserve expressed delight with the judgement, notwithstanding its loss on three of four points and there being no verdict on the fourth.

CEO Eric Abensur said:

"This is an important victory for Freeserve and for UK broadband development as a whole. We are delighted Oftel has been required to review this matter in a thorough and proper manner. Oftel was required by the court to approach the complaint with an "open mind" we look forward to the opportunity to work with them on it."

BT would not be drawn on the dispute. A spokesman for the company told the Guardian newspaper that "if they're positioning it as a victory over BT then that's rather disingenuous. At this stage of the game it's a matter between the appeals tribunal and Oftel. BT isn't even on the pitch."