Ofcom proposes ways to stop BT undercutting broadband rivals

Tackles former state monopoly's 'significant market power'

Ofcom wants to slap new measures on BT to prevent it from undercutting rivals investing in super and ultrafast broadband.

The UK communications regulator today proposed a clause in its draft plans to address BT's "significant market power" aimed at preventing the former state monopoly from targeted discounting of its wholesale broadband pricing.

The measure is being put forward after concerns were raised that BT "might seek to prevent or reduce competitive rollout of new ultrafast networks by reducing its wholesale prices in the areas where others are starting to roll out new networks".

That was in response to Ofcom's proposals in March regarding the regulation of the Wholesale Local Access (WLA) market in the UK.

"In effect, this would impose a restriction on BT's ability to vary its wholesale rental charges, in its fibre to the cabinet (FTTC) footprint, between different areas," said the regulator in its consultation today.

"These proposals are designed to encourage investment in new ultrafast networks, promote competition and protect consumers."

Ofcom said the UK is "starting to see signs of more investment in new ultrafast networks".

It noted BT's consultation on FTTP; City Fibre and Vodafone's plan to roll out fibre to one million homes by 2021, with a possible extension to five million homes; and network expansion plans by alt-net minnows Hyperoptic and Gigaclear.

An Openreach spokesman acknowledged the consultation and said the firm will respond accordingly.

"This is only one small aspect of the WLA review and we're awaiting Ofcom's broader conclusions on the right regulatory framework to encourage investment by us and others."

The deadline for responses is January 12. ®