BT Surf Together and BT Talk & Surf Together pricing packages

No. 4/05/2001

The Director General of Telecommunications has investigated under the Competition Act 1998 the pricing of two new tariff packages for residential customers that BT introduced on 1 December 2000, BT Surf Together and BT Talk & Surf Together. The Director was concerned that the 'Surf' element of the packages (offering off-peak internet access calls on an unmetered basis) was being provided below cost and that BT was funding the shortfall from profits on local and national residential voice calls in which it appears to the Director that BT is dominant, or wholesale call origination in which BT is dominant. Such behaviour could be an attempt to leverage market power horizontally (from residential voice calls) and/or vertically (from wholesale call origination) into either retail internet access or wholesale termination of calls to Internet Service Providers. The Director suspected that this could have materially anti-competitive effects.

The Director has now completed his investigation. The Director has concluded that it is not proven that, at the current prices, BT is pricing or will price Surf below cost in the new packages. Furthermore, the Director considers it unlikely that, even if the price were below cost, a material anti-competitive effect would result on current prices, because of the presence of competing, sustainable 24/7 retail internet access packages. In these circumstances, the Director does not therefore consider that BT's current pricing of the packages constitutes an infringement of the Act.

Back to top