BT calls for ending subsidies to BSkyB, TalkTalk
03 Mar 2014
UK telecoms operator BT is pressuring communications regulator Ofcom to end what it considers a "pricing distortion" in the wholesale broadband market that had protected rivals BSkyB and TalkTalk for nearly a decade.
The former national telco is pushing the watchdog for scrapping maximum limits set on the prices rivals BSkyB and TalkTalk had to pay for wholesale telecoms services.
According to BT's consumer boss John Petter, TalkTalk and BSkyB had enjoyed subsidies for the best part of a decade but it was time for that to end.
He added both were successful companies and both were more than capable of standing on their own two feet.
He said, it was particularly unfair that BT had to give BSkyB a commercial leg up when they consistently refused to provide BT with fair access to their own services.
The once national telco is feeling the heat of competition particularly after rival BSkyB upped the ante following BT making an aggressive move into the television market.
The company secured expensive rights to broadcast much sought after football games over successive seasons.
Petter added, that Ofcom needed to be given credit for driving competition deeper into the network but that success needed to be reflected in current regulation.
According to BT, a report from telecom and media consulting firm Plum Consulting found that BT's rivals had already benefited to the tune of around £600 million and were closing in on £1 billion in unfair subsidies.
Responding to BT's submissions, a TalkTalk spokesperson said the people who had benefited from Ofcom's regulation were consumers. The spokesperson added, what BT was actually calling for was for consumers and businesses to pay more for broadband, and for that money to go straight into BT's pockets.
BSkyB also claimed rather than costing the industry money, firms like it were investing in the broadband network. It went on to add that any regulatory changes needed be slow-moving, and reminded anyone who was listening that BT might not offer the best consumer deals.
"We have already invested more than £1bn in our broadband network to create more choice and competition for consumers, and which has helped drive down prices for millions. We've been able to do this thanks to certainty over the regulatory framework against which our investments are made. It's this very principle of regulatory certainly that BT itself argues for when making investments of its own," it said in a statement.
