ISPreview - Oftels CloudNine Conclusion

Oftel Issue an Official 'Case Conclusion' document to C9s SP24 Complaint

Oftels CloundNine Conclusion
By Mark 'Killzat' Jackson : Feb 28th - 2001 : Page 2 of 2

"Oftel does not consider that BT's minimum requirements for its SurfPort24 product are anti competitive"


BT stated that it is possible it will also raise the minimum order level for new customers for SurfPort, for the reasons given above.

Economic issues

Oftel's current view is that BT does not have market power in Internet call termination, and cannot therefore exploit its position by imposing unfairly high minimum requirements for its SurfPort24 product in order to materially distort competition between ISPs. If SurfPort24 is sold with unreasonable terms and conditions, and at unreasonably high prices as Cloud Nine also alleged, this is a clear signal for market entry by a competing operator, at more affordable terms.

Alternatives available to ISPs

BT has informed Oftel that it is developing a version of Webport, to be called WebPort24, that will utilise FRIACO and offer unmetered Internet access. Unlike SurfPort, which terminates traffic on the ISP's host site, the current WebPort product involves carriage from the user on to BT's Colossus IP network and then directly to the Internet. WebPort24 will, Oftel understands, have a minimum order of 10 ports, and is scheduled to be launched in early April 200l.

Other options which are, apparently, being discussed by ISPs include aggregation to spread the cost of purchase of SurfPort products, and the provision of wholesale products utilising SurfPort24 by larger ISPs.

Following the FRIACO Determination, Annex II operators will be able to enter the market more easily. They can put together their own comparable products aimed at ISPs, using DLE or Single Tandem FRIACO for call origination, combined with their own call termination.

OLOs are also able to use the FRIACO hybrid, or 0800 pence per minute, in certain areas where it would be uneconomic to collect traffic at the DLE. Other operators are already using DLE FRIACO to supply origination and combining with termination to ISPs. Single tandem FRIACO will also further enable them to compete.

ISPs do also have the option of contractual negotiations with BT or another provider in an attempt to obtain a lower minimum order at a higher price. Such negotiations, being of a contractual nature, would of course not be within Oftel's jurisdiction.

Oftel's decision

As it appears that there is likely in the short to medium term to be an adequate number of operators able to meet the requirements of smaller ISPs in one or more of the ways identified above, Oftel does not consider that BT's minimum requirements for its SurfPort24 product are anti competitive. BT has not, therefore, breached Condition 57 of its licence, and the case has been closed.

Competition Case Officer

B*** *******
(020) **** ****


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