BT's broadband campaign was found to be legitimate

Prices for BT's broadband service could go up as telecoms watchdog Oftel is forced to re-examine the way the telecoms giant has rolled out broadband.

It follows a series of complaints from rival ISP Freeserve about how BT is running its broadband business.

The Competition Appeals Tribunal, the highest competition court in the land, has ruled that Freeserve was right to the challenge the rejection of a complaint made to Oftel about predatory pricing by BT.

Now Oftel has three months to re-examine the price at which BT offers broadband to customers.

Critical of Oftel

It is very embarrassing for Oftel. Basically it had not applied competition law properly Freeserve spokeswoman

Freeserve argues that BT has cross-subsidised its internet arm BTopenworld, effectively freezing competition out of the market.

"We alleged that BT was using its dominant position and deep pockets to offer broadband at a loss," explained a Freeserve spokeswoman.

The court was critical of Oftel's investigative procedures, finding that it did not explain its analytical approach correctly and that much of its ruling was unclear.

"It is very embarrassing for Oftel," said the Freeserve spokeswoman.

"Basically it had not applied competition law properly," she said.

'Grow up'

I am surprised that Freeserve is claiming this as a victory. It is about time it grew up BT spokesman

The telecoms watchdog maintains that it is pleased with the outcome and will be happy to go back and re-examine BT's pricing.

The Competition Appeals Tribunal threw out three other appeals from Freeserve.

Freeserve questioned whether BT's recent broadband campaign was legitimate and whether BTopenworld had advance knowledge of a decision to drop the wholesale price of broadband.

The court also ruled that BT was entitled to ask its telephone customers about how they used the internet.

BT is convinced that it has done nothing wrong.

"We expect to be thoroughly vindicated. I am surprised that Freeserve is claiming this as a victory. It is about time it grew up," said a BT spokesman.