Oftel has thrown out Freeserve's allegation that BT's broadband marketing strategy breaches the Competition Act.

Earlier this year the ISP forced Oftel to reopen its investigation into BT's pricing strategy, by winning an action at the Competition Appeals Tribunal. It claimed that BT was using predatory pricing in the broadband sector, forcing other operators to offer services at a loss.

Freeserve said that this was achieved by the unfair advantage given to BT by its 'blue bill' and 150 customer line, offering customers joint telephony and internet billing.

But Oftel's latest investigation found that "the number of consumers taking BT Broadband as a result of 150 marketing was sufficiently low not to have a material adverse effect on the competition".

It also found that marketing broadband to customers using the blue bill, did not offer BT significant cost savings over competitors who could use similar direct marketing methods.

Finally, the cost savings associated with billing for internet and phone charges via the same blue bill, could easily be replicated by rivals using credit card or direct debit payments.

Oftel concluded: "BT's marketing activity using the blue bill and 150 customer service line does not prevent Freeserve from competing on a fair basis."

BT boss Pierre Danon greeted the ruling by cautioning Freeserve customers: "If I were a Freeserve customer I'd be seriously concerned about the time and money being invested in complaining to Oftel about BT".

Freeserve has yet to decide what course of action it plans to take now, issuing the following statement to the press: "We are carefully examining the details of Oftel's non-infringement decision and are considering our position".