Industry Group Says BT And Ofcom Are Stifling Broadband Competition

Steve McCaskill is editor of TechWeekEurope and ChannelBiz. He joined as a reporter in 2011 and covers all areas of IT, with a particular interest in telecommunications, mobile and networking, along with sports technology.

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Ofcom and BT deny claims that current communications policy isn’t creating a competitive market

BT and Ofcom have been accused by an industry trade body of stifling innovation and underserving business customers by not doing enough to stimulate competition in the broadband market.

The UK Competitive Telecommunications Association (UKCTA), which counts EE, Sky, TalkTalk, Virgin Media and Vodafone among its members, says Ofcom needs to reassess its priorities to ensure the market remains competitive.

UKCTA says the regulator has shifted from general consumer protection to sector-specific intervention, a strategy which is less effective and can often duplicate existing policies.

Ofcom should do more

Virgin Media fibre optic broadband mapThe industry body wants Ofcom to return to this original focus, demand better better performance from Openreach, which manages the UK’s broadband infrastructure, and for BT to open up the rest of its “passive infrastructure” to all providers.

UKCTA says Openreach consistently fails to meet own targets for delivery times, fault rates and repair times, something which causes issues for thousands of business and consumer users. The organisation claims that better service would help mitigate Openreach’s effective monopoly position and ensure a more competitive market.

A YouGov survey commissioned by UKCTA revealed that although awareness of the Openreach brand was high, many were not sure what the company actually does and incorrectly blamed their service provider for problems with their connection.

Business broadband discontent

The research also highlighted discontent among business broadband users. More than a quarter of respondents said they felt Openreach was restricting the level of service they could receive and two thirds said they would not consider BT for their business.

UKCTA says that broadband policy has for too long focused on the needs of consumers rather than businesses, claiming that residential areas receive better speeds than business parks. It wants BT to open up its network infrastructure to all providers, replicating what has been achieved in the consumer market.

“Thirty years ago we saw the start of a new era in the UK telecommunications market,” says the UKCTA’s Domhnall Dods. “Although increased competition now helps manage the issues of pricing and consumer protection in today’s broadband market, the greater issue of BT’s market dominance remains.

“We believe Ofcom and its new CEO should review its agenda and target the root causes of this remaining market power, including the way the core BT platform is regulated. The UK’s consumers and businesses cannot afford for Ofcom to ignore the problems identified in these reports.”

BT and Ofcom response

Both Ofcom and BT have refuted UKCTA’s claims and say that the existing measures for promoting competition, reviewing Openreach’s performance and ensuring BT’s market position is not too dominant are already adequate.Fibre Broadband © Datskevich Aleh Shutterstock 2012

“We make no apology for protecting consumers. For us, that work goes hand-in-hand with promoting competition,” Ofcom told TechWeekEurope. “The UK already has the most competitive broadband market of any major European country. Our job is to ensure that customers benefit not only from innovation, but also from good quality of service and a fair deal.”

“The UK has a vibrant wholesale business connectivity market, with strong competition and innovation amongst a large number of providers,” adds BT. “In fact, Ofcom’s latest data [published on 8 October] clearly shows growing competition, which if anything supports the case for further deregulation.”

Ofcom added that a consultation on whether BT should make its infrastructure available to business providers was ongoing.

“We already require BT to make its infrastructure available to competing consumer providers,” said the regulator. “Earlier this month, we began a public consultation on whether we should extend this to business providers, and we welcome all contributions.”

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