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Ofcom proposes fall in BT Openreach charges to rivals

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Updated BT will be forced to cut the prices of the access charges it applies to the company's broadband and telephone lines when leasing them out to other providers, Ofcom said today.

The communications watchdog, which regulates BT's Openreach division because the business has a dominant market position in Blighty, submitted its "provisional new charge controls" to the European Commission this morning.

Ofcom said the decision was at a draft stage, and that it would be scrutinised by Brussels' officials before a final ruling is reached in March this year.

For a fully unbundled line (telephone and broadband) to a property, the watchdog proposed that Openreach should reduce its annual rental charge from £91.50 to £87.41 for the 2012/13 financial year.

It provisionally set the cost of a shared unbundled line (broadband only) to a property, slapping on a wholesale price tag of £11.92 per year, compared with the current annual charge of £14.70.

Finally, Ofcom said it also wanted to see wholesale line rental costs fall from £103.86 per year to an annual price tag of £98.81.

The regulator reiterated that it wanted to see BT's Openreach prices continue to decrease.

Previously, rival ISPs have been deeply critical of the national telco's "restrictive pricing".

In September last year, TalkTalk's commercial boss David Goldie claimed that BT was trying to regain "the monopoly position that it lost many years ago" courtesy of its provision of fibre optic broadband.

Concerns over the pricing of BT's duct-and-pole infrastructure were repeatedly highlighted to Ofcom, which eventually convinced the company to reduce its pricing.

BT, for its part, has warned the City that its wholesale business was being hampered by too much regulatory meddling.

A BT spokesman told The Register: “Whilst the prices are within the range outlined by Ofcom in November, we disagree with some of the underlying assumptions that they have used to determine these charge controls. Our primary concern throughout this process is to ensure that we are able to achieve a fair rate of return in order to continue our investment in the future of the UK’s communications infrastructure. We will consider all options available to us, including appealing, after Ofcom confirms its final decisions." ®

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