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Last Updated: Wednesday, 7 September 2005, 11:23 GMT 12:23 UK
BT price cap 'to boost broadband'
BT office
BT has already cut its fully unbundled local loop charge
Ofcom has announced plans to limit the price Britain's fixed-line telecoms giant BT Group can charge broadband competitors for access to its network.

The telecoms regulator said it intends to set a maximum price of 81.85 ($151) that BT can charge rivals to rent a fully unbundled local loop.

The local loop is the last stretch of the network linking a BT exchange to homes and businesses.

Rivals need access to BT's network to provide their own internet services.

Price guard

BT last month voluntarily reduced its fully unbundled local loop charge to 80 from 105.09.

Ofcom said its planned cap on charges would prevent BT from raising prices excessively in the future.

"The ceiling is designed to promote competition in the broadband market by ensuring that BT's charge is fair, reasonable and cost-oriented," Ofcom said.

The watchdog said it planned to allow BT to offer different rates for large business customers spending more than 1m a year on telecom services.

BT is currently required to offer all large customers the same published call and line charges.

Ofcom said it hoped to introduce the new price ceiling by October.

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