BT Broadband

No. 11/07/2003

The Director General of Telecommunications has conducted an investigation into a complaint made by Freeserve.com in October 2002 that British Telecommunications plc (BT) had infringed the prohibition (the Chapter II prohibition) imposed by section 18(1) of the Competition Act 1998 (the Act).

Freeserve's complaint concerns:

(a) the use of the residential 'blue' telephony bill as a marketing and advertising channel for BT Broadband

(b) the use of the BT Retail '150' customer support number as a sales and marketing channel for BT Broadband and

(c) the use of the blue bill to offer joint billing for retail telephony and retail broadband services.

The Director is of the view that if the effect of BT's conduct could be matched by its competitors at a reasonable or comparable cost, then BT's conduct in using those services could not be considered to be a leverage of dominance contrary to the Chapter II prohibition. Where the effect of BT's conduct could not be matched, the Director has assessed whether the conduct has had a material adverse impact on competition.

Having assessed the information provided by Freeserve and the evidence he has collected during his investigation, the Director has concluded that BT's conduct outlined above has not infringed the Chapter II prohibition on the following basis:

(a) efficient ISPs should be able to compete with BT's marketing through the blue bill

(b) although Freeserve and other competitors to BT are unable to match the number of consumers calling BT each month, the available evidence does not suggest that this is at present resulting in a material adverse impact on competition and

(c) any advantages that BT gains as a result of offering a single, joint telephony and Internet bill are matchable by its competitors and even if they are not matchable, the Director's view is that the evidence he has obtained does not support that BT is having a material adverse effect on competition by billing for both broadband Internet and voice telephony services on the blue bill.

Back to top