BT restrictions may be eased

BT now operates in a competitive market

Regulations which restrict British Telecom's activities in the open market could be eased as a result of an investigation by the government's red tape watchdog.

The Cabinet Office's Better Regulation Task Force is looking into restrictions which were imposed on BT at the time of privatisation in 1984.

Since full competition hit the British market in 1991, an increasing number of objections to retail price controls, which regulate the costs of telephone calls, have been raised.

In November, BT shares fell below 600p for the first time in more than two-and-a-half years.

If regulations are inhibiting the growth of the market then maybe the regulations should be changed

Lord Haskins

Earlier this year, the telecoms regulator Oftel ignored pleas by BT for the removal of the price cap on charges to household callers, and proposed extending the regime until July 2002.

Lord Haskins, chairman of the Better Regulation Task Force, has signalled his willingness to consider lightening BT's regulatory burden by stressing it was now operating in a much more competitive environment than it had when the restrictions were first imposed.

But he said no decisions had yet been taken, and said his team would not report until the middle of 2001.

Vulnerable and elderly

He told BBC Radio 4's Today programme: "We are interested in making sure that the regulations which affect these privatised (companies) still reflect the markets in which they are.

"Certain of the regulations clearly are still very necessary, for example protection of vulnerable and elderly people who need these public services.

"But if regulations are inhibiting the growth of the market then maybe the regulations should be changed.

"The reality of BT is that they are now operating in a severely competitive market and it could be that some of the regulations are inhibiting BT from operating in the market as well as they be."

A BT spokesman said the company would welcome any initiative that would lead to further deregulation.

"We certainly support the cutting of red tape and replacing regulation with market competition," he said.