Ofcom refuses to bite over Openreach's fiber freebies

Watchdog says it sees no case to investigate discounted FTTP upgrade offer – but will keep an eye on it

Ofcom has declined to intervene after smaller network providers complained that a special upgrade offer from Openreach could threaten competition in the broadband market.

The UK's communications watchdog said it does not have "prima facie" concerns that would warrant investigating the offer from Openreach, the infrastructure arm of former state-owned telco BT.

At the hear of the issue is a recently launched promotion for so-called proactive migrations - upgrades initiated by ISPs to move customers to better connections, typically from copper wire to fiber-to-the-premises (FTTP).

The nationwide offer covers the rental price of FTTP service post-upgrade, making the 1,000/115 Mbps, 550/75 Mbps, and 330/50 Mbps bandwidth tiers available at no more than the rental price of the current 80/20 Mbps product for 24 months from activation. This represents a considerable discount for ISPs.

However, the window for claiming this offer runs only from October 10, 2025, to April 9, 2026, and applies solely to successful FTTP installations.

Complaints from smaller network providers were two-pronged: firstly, they argued the pricing falls below the cost of "a reasonably efficient operator," effectively making it a loss leader. Second, they claimed the limited timeframe would drive an "accelerated mass migration" by ISPs from copper to FTTP, shutting out Openreach's smaller rivals in areas where they may not yet have been able to build up their network footprint.

Ofcom sees no reason to take action at this time. The regulator believes it is important to monitor the impact on Openreach's average FTTP price levels and ISP behavior over the coming months, though critics note the offer will likely have ended before any intervention could occur.

"We recognize that the lower prices available under this offer may increase commercial pressure on altnets [alternative network operators] insofar as it sharpens competition between networks. However, this alone is not a reason for intervention, nor does it automatically mean those prices raise competition concerns," Ofcom said in an open letter to the industry.

On pricing, the regulator compared the offer against Openreach's average FTTP price and estimates of a reasonably efficient operator's costs, concluding the price sits above the top end of those estimates. Regarding concerns about accelerated migration, Ofcom said it is still considering stakeholder responses.

Some industry observers believe Openreach faces mounting pressure from competitors like CityFibre, which recently reported its customer connections rate is close to doubling each quarter.

This isn't the first time Ofcom has sided with the incumbent. Openreach's controverial Equinox schemes offered ISPs discounts for migrating customers from copper to fiber, but only if a certain proportion of new sign-ups went to Openreach itself.

Altnets, in particular CityFibre, claimed this amounted to unfair competition, as they couldn't afford to match the discounts Openreach waved under the nose of ISPs. However, it lost its appeal against Ofcom's decision to allow Openreach to go ahead, and the regulator also declined to block Equinox 2.

However, CityFibre seems somewhat sanguine about the latest matter, telling The Register:

"Given Ofcom's clearly stated strategy in its TAR (telecoms access review) consultation to promote long-term, effective and sustainable competition, it's right that Ofcom is monitoring this offer closely to examine whether it is consistent with that policy objective."

Openreach declined to comment on the Ofcom report. However, Openreach said it has identified a further 94 exchange locations across the UK where it will discontinue the sale of copper-based phone and broadband services to encourage fiber upgrades.

The "Stop Sell" policy triggers when 75 percent of premises using a particular exchange can access fiber. To date, 1,041 exchanges covering 8.9 million properties have reached this threshold. ®