UK - OFCOM to impose access obligation on BT in a review of wholesale broadband markets

[computing] Communications regulator Ofcom is to impose access obligations and price controls on BT in broadband markets where the telecoms giant has significant power, in a bid to get a better deal for consumers.

Regulations and price controls are outlined in Ofcom's Review of the Wholesale Broadband Access Markets, which puts considerable emphasis on the relationship between competition and market success.

"Competition has driven the success of the current generation of broadband services. The result has been greater choice, innovation, lower prices and high levels of broadband adoption," it says.

"We have found that there is effective competition in almost 80 per cent of the UK.

"However, in just over one-fifth of the UK – covered by what we have called Market 1 and Market 2 – we have concluded that there is not sufficient competition and so have had to imposed regulation."

According to Ofcom, Market 1 is an area in which BT is currently the only provider of wholesale broadband services.

Market 2 is an area with two or three significant providers, but where BT still has market share of 50 per cent or more.

"In Market 1 there is limited prospect in the near term of any wholesale competition," argues the report.

"Therefore, we are imposing general access and non-discrimination obligations on BT, together with a requirement that charges should be based on the costs of provision," said the report.

BT will be subject to a wholesale price cap, to ensue it does not pass on excessive charges to consumers.

"These obligations will ensure that other communication providers have the opportunity to use wholesale products supplied by BT to compete effectively at the retail level," Ofcom says.

To obtain transparency, BT will also have to publish information on the services it provides in Market 1.

In Market 2 areas, BT will also be subject to general access, non-discrimination and transparency obligations. However, owing to the constraint on pricing provided by there being other operators in these areas, BT will not see strict price regulation here.

Details of the charge controls being imposed in Market 1 will be outlined in a separate consultation at a later date.

Ofcom to impose cap on BT charges