Feeds

Ofcom mulls BT Openreach price hike

'Free' broadband economics tested

Boost IT visibility and business value

After months of lobbying, BT has got its wish. Ofcom today announced it will formally consider letting Openreach raise the prices it charges BT's competitors for wholesale access to local exchanges.

BT has been crying foul over Openreach because its costs have increased alongside greater competition in broadband from local loop unbundlers.

Firms which offer "free" broadband under very tight economics based on the current charges will likely squeal the loudest about any resulting rises in wholesale line rental for unbundled lines. Their economics relies heavily savings made by unbundling.

They will be able to point to Ofcom's own assessment of the level of service offered by Openreach: it's not very good.

Ofcom said in a statement: "The evidence we have reviewed to date suggests that there is likely to be a case for some increases in the charges for the regulated access services.

"However, we do not currently believe that the increases need to be as significant as is implied by the projections provided by BT."

It'll review the current price ceilings in two phases. The first consultation, beginning today, will aim to set out the current costs of Openreach and expected changes, and examine the effect raising charges will have on BT's competitors.

A second consultation will address the pounds and pence nitty-gritty. Ofcom expects to have a new deal thrashed out by the end of this year.

Openreach set up shop in January 2006, after BT cut a deal with regulators to avoid an enforced full scale dismantling of its network ownership and the services other BT divisions use it for. The "functional separation" model that emerged is being pressed on other nation's regulators by the European Commission. ®

The Essential Guide to IT Transformation

More from The Register

next story
Scotland's BIG question: Will independence cost me my broadband?
They can take our lives, but they'll never take our SPECTRUM
Bring back error correction, say Danish 'net boffins
We don't need no steenkin' TCP/IP retransmission and the congestion it causes
Auntie remains MYSTIFIED by that weekend BBC iPlayer and website outage
Still doing 'forensics' on the caching layer – Beeb digi wonk
NBN Co adds apartments to FTTP rollout
Commercial trial locations to go live in September
Samsung Z Tizen OS mobe is post-phoned – this time for good?
Russian launch for Sammy's non-droid knocked back
Telstra to KILL 2G network by end of 2016
GSM now stands for Grave-Seeking-Mobile network
Seeking LTE expert to insert small cells into BT customers' places
Is this the first step to a FON-a-like 4G network?
What FTC lawsuit? T-Mobile US touts 10GB, $100 family-of-4 plan
Folks 'could use that money for more important things' says CEO Legere
prev story

Whitepapers

Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
The Essential Guide to IT Transformation
ServiceNow discusses three IT transformations that can help CIO's automate IT services to transform IT and the enterprise.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
How modern custom applications can spur business growth
Learn how to create, deploy and manage custom applications without consuming or expanding the need for scarce, expensive IT resources.
Build a business case: developing custom apps
Learn how to maximize the value of custom applications by accelerating and simplifying their development.