Ofcom proposes cap on BT wholesale prices

Ofcom proposes cap on BT wholesale prices

BT’s leased line wholesale prices could be reduced over a three year period, according to plans proposed by Ofcom.

In the Business Connectivity Market Review published last month, the regulator stated that BT has ‘significant market power’ over wholesale leased line markets and that buyers should be protected through ‘charge controls’. Ofcom, who is currently consulting on the level of these controls, estimated the leased lines market is worth £2bn, with businesses, mobile and broadband operators to set to see ‘real-term price reductions’.

The media giant has been under pressure from Ofcom and rivals to give competitors physical access to its dark fibre network to enable direct control of the leased connection. Today’s consultation will see Ofcom propose a cap on Ethernet connections that will force BT to provide dark fibre access.

This will allow competitors to install its own equipment to ‘light’ the fibre cables, instead of it being lit using BT’s electronic equipment. BT has also faced calls from Sky and TalkTalk to spin off its OpenReach division into a separate company.

The regulator has warned that it will take a tough stance on mobile and broadband providers, with BT’s reduced wholesale prices following a series of measures implemented by Ofcom as part of an industry ‘intervention’.

Ofcom claim that the charge controls that are being proposed will not only help save providers and customers money, but will also encourage BT to make efficiency gains, as it will be linked to inflation based on the consumer price index.


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