Feeds

BT: Ofcom's planned wholesale price cap? Just a smidge too tight

Watchdog wants broadband, landline charges constricted to help competition

High performance access to file storage

BT should slash its wholesale prices for competitors that access the former national telco's copper network, comms regulator Ofcom said today.

Operators such as BSkyB and TalkTalk could then pass on those "real-terms" cost cuts to their customers, the watchdog added.

Ofcom is proposing that BT's Openreach biz, which is subject to regulation due to its "significant market power", should reduce its wholesale charges on some of its products.

It said that a fully unbundled line to homes and businesses in the UK that allows BT rivals to offer customers telephone and standard broadband services should have its prices cut.

Operators currently pay £84.26 per year for each connection, but the watchdog is proposing that the charge should drop between 0 per cent and 6 per cent below the rate of inflation from 2014 to 2017.

Ofcom added that charges for other parts of Openreach's offerings to its competitors should also be reduced.

It wants to see shared unbundled lines slashed from the current annual price of £9.75 by as much as 12 per cent below inflation every year.

The regulator added that the cost of wholesale line rental, which currently carries a £93.27 price tag per year, should be cut by up to 8 per cent below inflation for rival providers accessing BT's copper network.

But BT will not face price caps across all its wholesale offerings. Ofcom explained:

Since the last such review in 2010, competition has spread to more rural areas as communications providers have rolled out their own networks, based on unbundling BT’s lines, to smaller telephone exchanges.

Ofcom has found that the area of the UK with effective competition has grown in the last three years from 78 per cent to 90 per cent. Ofcom is proposing no regulation in this competitive area, but to impose regulation including a charge control on BT’s services in the less competitive remaining 10 per cent of the UK.

BT, however, disputes Ofcom's sums. A company spokesman said: "These proposals are complex and we will review them in depth. There are a number of areas where we believe Ofcom have not fully recognised the costs of providing services."

The regulator said its consultation process on the BT's wholesale pricing structure would close on 25 September with a final decision about those costs not expected until next spring. ®

High performance access to file storage

More from The Register

next story
A black box for your SUITCASE: Now your lost luggage can phone home – quite literally
Breakfast in London, lunch in NYC, and your clothes in Peru
Broadband Secretary of SHEEP sensationally quits Cabinet
Maria Miller finally resigns over expenses row
Skype pimps pro-level broadcast service
Playing Cat and Mouse with the media
Beat it, freetards! Dyn to shut down no-cost dynamic DNS next month
... but don't worry, charter members, you're still in 'for life'
Like Google, Comcast might roll its own mobile voice network
Says anything's possible if regulators approve merger with Time Warner
EE dismisses DATA-BURNING glitch with Orange Mail app
Bug quietly slurps PAYG credit - yet EE denies it exists
Turnbull leaves Australia's broadband blackspots in the dark
New Statement of Expectations to NBN Co offers get-out clauses for blackspot builds
Facebook claims 100 MEEELLION active users in India
Who needs China when you've got the next billion in your sights?
prev story

Whitepapers

Mainstay ROI - Does application security pay?
In this whitepaper learn how you and your enterprise might benefit from better software security.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Mobile application security study
Download this report to see the alarming realities regarding the sheer number of applications vulnerable to attack, as well as the most common and easily addressable vulnerability errors.