Millions of surfers to pay lower fees

Telecoms regulator Oftel has ordered BT to slash by 8.5% the prices its charges trade buyers for unmetered conventional, or narrowband, services.

The shake-up could benefit up to 4 million UK households which use the "always-on" feeds, an Oftel spokesman told BBC News Online.

The announcement came as Oftel revealed that the drive to promote faster, broadband internet access was seeing 20,000 new customers sign up to the services every week.

Links in the chain

Thursday's Oftel ruling will force BT to cut unmetered narrowband prices charged to telecoms operators such as Energis.

These operators supply internet service providers such as Freeserve and AOL with "always-on" internet lines.

Oftel director general David Edmonds said: "This reduction means that operators can now buy capacity from BT cheaper than before.

"Operators have the opportunity to pass these savings on to internet service providers and through them to consumers."

Oftel duty

The Oftel review followed access to accurate figures on BT internet trade.

"Until now, Oftel has had to use estimates to assess BT's charges," Mr Edmonds said.

"But new information on BT's internet traffic volumes is now available, allowing Oftel to reassess these charges."

Oftel had a duty to ensure BT's charges were "fair", he added.

The decision also comes the day after Oftel urged against breaking up BT in a bid to promote competition, and so reduce charges, in the broadband market.

"Competition in the broadband market continues to increase, with prices cheaper in the UK, than in France or Germany," Oftel said.

Oftel estimates that the total number of broadband connections in Britain should reach 750,000 by the end of the month.

BT chief executive Ben Verwaayen said at the firm's annual general meeting on Wednesday that orders it was receiving for broadband connection were running at 12,000 per week.