Wholesale price cap: Take THAT, BT, says (now toothy) Ofcom

Regulator wants telco giant to play nicely over fixed leases


UK regulator Ofcom further turned up the heat on BT today, unveiling plans to cap wholesale prices the one-time national telco charges for leased telecoms lines.

The regulator said the move should lead to "significant savings" for businesses, part of its overall plan to promote greater competition in the £2bn market for leased lines.

In the Business Connectivity Market Review published last month, Ofcom singled out BT's "significant market power" in leased lines, and said "charge controls" should be imposed.

Ofcom is proposing a form of charge control that aims to bring prices down to costs over a three-year period, starting from April next year.

The main charge controls relate to two groups of services — or “baskets” — provided by BT. These include older leased lines using "traditional interface" technology, and newer lines based on the faster "Ethernet" standard.

Last month, Ofcom also said it wants BT to open up its fibre broadband network to rival telcos. However, BT has claimed that "mandating dark fibre" could "disadvantage" ISPs that do not have the "capability to deploy" the technology.

Additionally, Ofcom is pushing for BT's Openreach division to speed up leased line installations for rival ISPs.

Sharon White, new head of Ofcom, said in her inaugural speech yesterday that big mergers in the sector "could affect the functioning of the market for consumers".

In a nod to the mega-deal between BT and EE she said: "[My] general observation is that competition has been good for investment and for consumers."

A BT spokewoman said: "These are proposals for discussion, so we'll be making our views known to Ofcom. We believe there should be less regulation in this market, not more, as businesses already have a diverse and growing choice amongst a large number of providers."

“More regulation could discourage future investment in the UK's telecoms infrastructure," she added.®

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