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Openreach reaching for more cash

Ofcom consults on increased loop pricing

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Ofcom has opened a second consultation on increasing the amount that BT Openreach, the company that manages the UK's telephony infrastructure, can charge for access to phone lines.

Back in 2006, when BT Openreach was set up, Ofcom agreed caps on the amount that the company could charge for access to the network. But those original prices made no allowance for inflation or other changes in operating costs. Ofcom has already had one consultation and decided, on the back of that, to increase prices. The question now is by how much?

BT Openreach was created following an agreement with Ofcom to set up a separate concern for management of the UK's telecommunications infrastructure - most of which was built while BT held a monopoly. Openreach manages the exchanges and physical copper (and aluminium, for the less fortunate) in the ground, which can then be leased by third parties who want to provide broadband access to end customers, including BT.

Lines can be fully unbundled, where a third party runs every service run over the line, or "shared unbundled", where only ADSL broadband is provided by the third party and the end customer needs to have two contracts in place. Ofcom has proposed increasing the annual cap on fully unbundled lines to something between £85 and £91, from £81.69 at the moment, while shared lines could rise to £16.20 from the current £15.60.

This isn't nearly as much as Openreach wanted, but is less than competitors argued for - Ofcom seems to have managed to annoy everyone equally, which must bode well. The regulator has also mapped out charges for the following four years, as well as explaining their methodology in detail (pdf).

Responses to the proposal should be with Ofcom by February 20 next year, with the new prices likely to come into effect by April 1. ®

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