OFTEL: a new approach to regulation

The Office of Telecommunications (OFTEL) was established as a non-Ministerial UK Government Department by the 1984 Act, which laid down the duties of the Director General, who is responsible for enforcing and interpreting the licences and rules for the industry that were approved by Parliament. The author occupies this post, and professionally is an accountant, and has approached his subject from a conceptual base. The purpose of the Act is to liberalise the telecommunications industry, with the aim of increasing the economic efficiency by bringing market forces to bear. OFTEL has the opportunity to lead the way internationally, in changing the basic structure of what was a nationalised industry, and to show that this new approach can be made to work, and to bring benefits, through using people and technology more effectively. How much regulation and what kind of regulation is discussed, the aim being to secure the optimum desirable level of competition, and tolerable transitional arrangements. Issues that arise, not specifically covered in the Act and licences, are determined by OFTEL from time to time Cellular telephones are a successful example of implementing regulated competition that benefits the consumer. Other issues reviewed, including cross-subsidisation, supply of apparatus and the pricing rule (RPI-X) as an efficient form of regulation OFTEL needs to be both proactive and subject to checks.