C&W fires broadside at BT

BRITISH TELECOM'S dominance in Britain is stunting innovation and we could benefit by £20bn a year from a better-regulated system, says a report for BT's rival Cable & Wireless.

But C&W has dropped its campaign to break up BT, arguing instead that the 'last mile' connection to households must be opened up fully and fairly.

The report by consultant Spectrum argues cheap internet access has brought big benefits to business in the US. Here we have had a long list of delays - subscription-free net access was held back by five years and broadband for households by three years.

The £20bn figure is based on the notion that speedier progress would transform our productivity. Spectrum says that although 70% of UK firms have net access, few have broadband and only 20% order online.

C&W says BT still dominates the 'last mile' after 20 years of regulation. It wants watchdog Ofcom to recast regulation to favour innovation.

BT said: 'Britain has the fastest broadband growth of any major nation.' But it agrees the company needs 'a new regulatory approach'.