Price caps could come in by April and BT isn’t happy
Ofcom has trotted off to Brussels to get permission to impose caps on how much BT can charge other providers for its very high-bandwidth wholesale lines.
It comes after an announcement from the regulator in July 2012, in which it outlined plans to impose further restrictions on what BT could charge for general wholesale leased lines.
Specifically, Ofcom has asked the European Commission if it can regulate those lines offering as much as 1Gbps, in all parts of the UK except London and Hull, as BT has been “found to have ‘significant market power’ in this relatively new market”.
Ofcom has proposed significant price reductions outside London, at 11 percent below inflation per year over the next three years.
As BT faces tougher competition in London, Ofcom will take a lighter approach in the capital, whilst Hull’s main provider is Kcom.
“The draft measures are designed to promote competition. They will also help ensure the UK has a backbone of high-speed business networks capable of supporting not only companies, but also consumer services that ultimately rely on these networks, such as superfast broadband and mobile video streaming,” Ofcom said.
“Leased lines also provide vital high-speed links between schools, universities, libraries and other public bodies.”
The regulator will issue a final statement towards the end of March, before new charge controls commence on 1 April 2013, which will remain in place for three years.
BT said Ofcom’s proposals were “mistaken”, saying in a statement that it had provided plenty of evidence proving the market was competitive.
“There is no market failure that needs regulatory intervention.”
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