In a surprise move, the Office of Telecommunications (Oftel), yesterday announced its decision to scale back government regulation of the telecom market in favour of industry self-regulation.

"This is the most significant change in Oftel's approach to regulation since 1984," Oftel's director general of telecommunications, David Edmonds, said.

The move to reduce regulations in favour of a new "competition plus" strategy was taken in light of increased competition. This, Oftel said, is due to the rapidly changing and converging technology and telecommunications markets. Such competition is the best protection for consumers, Oftel added.

The decision most directly effects BT. Simon Gordon, a spokesman for the company, said: "The UK is a highly competitive market. We're pleased that Oftel recognizes that, and we welcome any deregulation."

Gently does it Beginning immediately, regulation will be "as light touch as possible" with "alternatives to formal regulation such as co-regulation or self-regulation being considered wherever possible", Oftel said.

The new strategy will also apply to existing regulations, which will come under review "to see if it continues to be needed", the report said.

Over the next three years, Oftel will undertake "major reviews of the telecom market", beginning with a consumer protection policy review - beginning this month – to asses the regulation of premium rate services. A review report on metering and billing will be published in March.

People power Pressure from consumer and industry groups, along with Oftel, led to last month’s announcement of flat rates for Internet access. Beginning this spring, the flat-rate service replaces the much criticized current per-minute charges, which have been blamed for blunting the UK's competitive edge in the Internet economy.

Last November Oftel ordered BT to open all of its local telecommunications network lines to competing companies by 2001. Oftel also directed BT to upgrade the "local loops" to handle new broadband digital services such as DSL (Digital Subscriber Line) by July 2001.