Ofcom sets out rules to regulate superfast broadband market

Telecoms

by Michael Moore| 19 June 2014

BT pricing structure hit by new proposals to ensure fair competition.

Ofcom has revealed a proposed set of new requirements which it hopes will help promote competition in the superfast broadband market.

As revealed earlier this week, the watchdog has responded to concerns surrounding BT's dominant market position, which currently supplies the fibre optic network used by many ISPs to carry their services.

Different operators currently using a process known as virtual unbundled local access (VULA) to access BT's network, with the provider having flexibility to set the wholesale price for providing this access to its network.

Under the new proposals, BT will have to maintain a fair margin between its wholesale and retail superfast broadband charges in order to allow its rivals to profitably match its prices.

The new rules will take into account the costs and revenues of the BT Sport channels.

The consultation closes on 28 August, with Ofcom expecting to publish a final statement on BT's superfast broadband margin later in the year.

"When Ofcom introduced the requirement for BT to offer other providers access to its fibre network, there were fewer than 100,000 super-fast broadband connections provided this way," the watchdog noted.

"That number has now risen to 2.7 million, and take-up is expected to increase further over the coming years."

According to recent Ofcom research, one in four UK residential fixed broadband connections is now 'superfast', offering a headline speed of 30Mbps or more.

Ofcom's proposals are aimed at ensuring that different operators can compete in the growing superfast broadband market in years to come, so that consumers benefit from competitive prices and high-quality, innovative services.

 

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