Ofcom stipulates new pricing for BT's superfast broadband
20 Jun 2014
UK telecom regulator Ofcom has stipulated new requirements for BT in order to promote competition in the expanding market for superfast broadband customers.
The rules will lead to BT having to maintain a sufficient margin between its wholesale and retail superfast broadband charges to allow other operators to profitability match prices it offered.
The regulator however, rejected a complaint from TalkTalk that BT had not maintained the margin.
Different operators sold superfast broadband over BT's network deploying a process called ''virtual unbundled local access'', with BT having the flexibility to set the wholesale price for providing access to its network.
According to Ofcom, its proposals preserved that flexibility even as it sought to ensure that BT did not set prices in a manner that prevented other operators from competing profitably for superfast broadband customers.
The company currently offers BT Sport free to its superfast broadband customers, and according to Ofcom, the proposed new rules would factor the costs and revenues of the sports channels.
When Ofcom introduced the requirement for BT to provide other providers access to its fibre network, there were less than 100,000 superfast broadband connections.
That number had increased to 2.7 million, and is expected to increase rise in the coming years.
Meanwhile TalkTalk claimed it had won a crucial battle in its war on BT's alleged stranglehold of the UK's fibre broadband market.
According to TalkTalk, BT was unfairly setting its retail prices too low even as it set wholesale prices too high, as it used its dominant position as a former state monopoly to marginalise the competition.
Ofcom rejected the claim on Thursday, even as the regulator proposed the new rules for BT's broadband pricing.
A TalkTalk spokes person told The Register that the company had been focused on getting fibre robustly regulated for the next three years and that was exactly what Ofcom had done.
