Feeds

BT could jack up line charges to fill pensions hole

Ofcom consults - unbundlers set to scream

Boost IT visibility and business value

Ofcom is pondering allowing BT to jack up its line charges to allow it to lighten the £9bn pension deficit hanging round the neck of the former state-owned telco.

The possible move by the regulator could see OpenReach, BT's wholesale arm, up its charges by as much as 4 per cent.

This would in turn land on those companies which lease lines form BT, such as Carphone Warehouse and Sky, forcing them to ramp up their own prices, or look for cost cuttings.

BT has long grappled with a pension fund that has liabilities of around £40bn, and which is currently about £9bn short of what it needs to keep former British Telecom/GPO workers off the breadline.

Ofcom said, "Because of the financial significance of these payments in the case of BT, Ofcom considers it right to consult on whether or how such payments should be factored in when setting BT's regulated prices."

It said it was launching the consultation, "to promote a broad debate on whether it is appropriate for Ofcom to maintain or change the approach it currently takes to the treatment of BT's pension costs."

It added, "So far Ofcom has not taken a view on whether it is appropriate or not to change its current principles in relation to pension costs. If Ofcom changes its approach, any adjustments in wholesale charges would not necessarily be felt proportionately by consumers."

This suggests the regulator is leaving open the possibility that those third party providers might be expected to take up some of the slack themselves.

Afterall, they do benefit from a network that was built and maintained over the course of many years by an army of BT engineers who are either now happily ensconced in retirement, or pondering wondering they'll get to retirement before their jobs are outsourced. ®

Maximizing your infrastructure through virtualization

More from The Register

next story
BBC goes offline in MASSIVE COCKUP: Stephen Fry partly muzzled
Auntie tight-lipped as major outage rolls on
iPad? More like iFAD: We reveal why Apple fell into IBM's arms
But never fear fanbois, you're still lapping up iPhones, Macs
Stick a 4K in them: Super high-res TVs are DONE
4,000 pixels is niche now... Don't say we didn't warn you
Philip K Dick 'Nazi alternate reality' story to be made into TV series
Amazon Studios, Ridley Scott firm to produce The Man in the High Castle
Sonos AXES support for Apple's iOS4 and 5
Want to use your iThing? You can't - it's too old
There's NOTHING on TV in Europe – American video DOMINATES
Even France's mega subsidies don't stop US content onslaught
You! Pirate! Stop pirating, or we shall admonish you politely. Repeatedly, if necessary
And we shall go about telling people you smell. No, not really
Too many IT conferences to cover? MICROSOFT to the RESCUE!
Yet more word of cuts emerges from Redmond
Joe Average isn't worth $10 a year to Mark Zuckerberg
The Social Network deflates the PC resurgence with mobile-only usage prediction
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.
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.
Application security programs and practises
Follow a few strategies and your organization can gain the full benefits of open source and the cloud without compromising the security of your applications.
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.
Securing Web Applications Made Simple and Scalable
Learn how automated security testing can provide a simple and scalable way to protect your web applications.