BT To Lower Broadband And Phone Wholesale Prices

BT is set to lower its wholesale prices for broadband and phone lines, following a ruling by a judicial body known as the Competition Appeal Tribunal (CAT).

The case began after a complaint by rivals ISPs TalkTalk and Sky Broadband (BSkyB) over BT’s price controls, which had been set by the UK’s communications regulator Ofcom in May 2009.

Officials at the CAT agreed that Ofcom had made the access fees too high, because they failed to factor in account efficiency and inflation.

BT Response

“BT is pleased with the CAT’s (Competition Appeal Tribunal) recognition that any errors made by Ofcom in setting the pricing for selected LLU (Local Loop Unbundled) products were relatively small in scale compared to Carphone Warehouse’s claims, and that as a result, only minor price changes should be made to selected LLU products for the remainder of the existing charge control period,” said BT in an emailed statement to eWEEK Europe UK.

“We further welcome the fact that no price changes are required for the WLR (Wholesale Line Rental) portfolio,” BT added. “Openreach will implement the required price changes with immediate effect, once directed by Ofcom further to the CAT judgement.”

The CAT ruling is an endorsement of an earlier ruling by the Competition Commission.

Minor Adjustment

“There are minor adjustments to LLU pricing, for wholesale access,” an Ofcom spokesperson told eWEEK Europe.

It seems that the actual amount of money involved is not huge in the great scheme of things, as it has been reported that when the price cap is changed, it will result in adjustments totalling approximately £4 million. Indeed, it is understood that for a fully unbundled line, the adjustment will be £1.36 per line per year. The adjustment for a shared line will be 59 pence per line.

Ofcom will shortly be issuing new price controls, and once that is done, BT will be legally bound to comply.

Open Market

There is constant examination of the prices being charged in the UK for broadband and telephone services. For example, back in June Ofcom persuaded three of the UK’s largest ISPs to reduce the fees they charge customers who want to change to a different broadband or finish their contract early.

Indeed, compared to some other European countries, the UK enjoys a relatively open telecommunications market where competitors are allowed to access BT’s copper-based network. Ofcom reminded BT recently that it had to give its rivals access to its fibre lines, despite the fact that the UK carrier has already done so for some time.

Following that reminder, Virgin Media then announced that it was planning to use BT’s fibre infrastructure to expand its high-speed network coverage to as many as 16 million homes in the UK.