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Pressure on BT steps up
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February 16, 2000: 7:55 a.m. ET
Shares slide on prospect of early competition in local-loop business
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LONDON (CNNfn) - British Telecommunications suffered the latest of a series of blows Wednesday, as the U.K. government raised the prospect that competition on the local phone loop between residential homes and the main trunk network may begin several months earlier than expected.
Industry regulator the Office of Telecommunications has set a deadline of July 2001 for the entire U.K. telephone network to be opened to competition, but reports Wednesday indicated the process may move forward by several months. An Oftel spokeswoman could not confirm the accelerated timetable, but said the regulator would like the changes to BT's monopoly in the local loop made "as soon as humanly possible".
The system is currently undergoing technical upgrades and checking procedures prior to BT opening its local connections to rivals. Oftel denied it was dissatisfied with the pace at which BT and other parties are working to open the network.
BT stock slumped almost 5 percent to 964 pence Wednesday
U.K. Chancellor Gordon Brown told the Financial Times Wednesday that he was concerned about the high level of Internet access costs in Britain, and pledged to bring them down. Brown told the newspaper that high fees, particularly compared with those in the United States, meant British companies lagged U.S. firms in e-commerce.
Analyst Justinian Clifford-Bowles of Commerzbank said, "any kind of political interference doesn't help at all... there is a little bit of a knee-jerk reaction."
He pointed out that the technical impediments to an unbundled local loop will remain, despite Brown's comments, and that an earlier opening of the market, even as soon as the end of 2000, would have little impact on analysts' forecasts for BT. 
-- from staff and wire reports
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Oftel
British Telecom
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