Watchdog calls for cheaper surfing

BRITISH Telecom has been told to reduce the amount it charges internet service providers (ISPs) for using its phone lines.

Oftel, the telecom industry watchdog, has proposed a cut of up to seven% from the wholesale rate ISPs such as AOL and Freeserve pay for the right to use BT phone lines for unmetered access.

'Oftel believes there is room for a 7% cut in BT's wholesale charge,' Oftel's communications director David Edmonds said. 'Operators should be able to pass some or all of this saving on to their customers.

'Cuts in BT's charges will mean UK consumers will continue to enjoy some of the cheapest prices in Europe for internet access,' he said.

Service providers gave the recommended price cuts a qualified welcome. Matt Peacock, a spokesman for AOL, said: 'We welcome it, but it is only a consultation on one piece of the jigsaw in the charge for access. So it's impossible to say what impact it will have.

'To expect seven% is not realistic. But we will be following and contributing to what is likely to be a long debate until the price change is decided on.'

Paul Barker, director of corporate affairs at Freeserve, said: 'We welcome any price reduction, but until it happens we will not get too excited. We've been here many times before with the broadband wholesale price.'

Consumers pay an average of £13 for a monthly Net subscription. If the price reduction was passed on in full, they could save around £10 a year.

Alan Stevens, head of digital services for the Consumers Association, said: 'We welcome anything that is going to bring the cost of internet access down, but we will be looking very carefully to ensure that the consumer benefits in full from any reduction.'

A final decision by Oftel on whether the charges should be cut will be made in the spring. Paul Douglas, editor of Net magazine, praised Oftel for trying to lower internet access rates.

He said: 'Oftel has done well to put the pressure on the cost of access. It's a step in the right direction. But they need to work harder on the cost of super-fast broadband services. Those are what will transform internet use in this country, and that is where Europe is leaving us standing.'

A BT spokesman said: 'We do not fully accept the Oftel figures and their proposals do not necessarily reflect the up-to-date reality of the charges. Nevertheless, these are only proposals, and we will be meeting Oftel to discuss the implications in more detail.'