UPDATE Ofcoms UK Business Telecoms Review Unlikely to Make Big Changes

Ofcom has started a new review of the £2bn UK business telecoms market that proposes several changes to help “meet growing demand for fast data services“. Unfortunately any ISP hoping for improved access to BT’s network of dark fibre lines will be displeased, yet they do propose to regulate 1Gbps+ wholesale leased lines that exist outside London.

The communications regulator appears set to maintain most of its existing regulatory remedies against BT (e.g. the requirement to provide access on a strictly non-discriminatory basis), especially for products with speeds of up to 1Gbps (Gigabits per second). But BT will benefit from softer regulation within the London area, where the operator faces growing competition from rivals.

Outside of London BT was found to have Significant Market Power (SMP) in the “relatively new market” for very high-bandwidth wholesale leased line services (1Gbps+), which means that they can expect tougher regulation.

Elsewhere access to Dark Fibre, which usually references a high capacity fibre optic cable that has been laid by an operator (e.g. BT) but is not yet being fully utilised (i.e. future capacity), looks set to stay fairly safe from Ofcom’s intervention.

Ofcoms Position on Dark Fibre

We have also considered the case for imposing an alternative or additional set of requirements known as passive remedies, such as requiring BT to provide access to its ducts, poles or dark fibre.

We are not proposing such passive remedies, because we consider that less intrusive remedies are likely to achieve similar benefits for consumers, while passive remedies would carry significant risks of worse outcomes, both for consumers and for effective competition, including adding costs and encouraging inefficient entry.

Ofcom has also proposed to deregulate the market for longer distance legacy leased lines and will additionally require BT to provide its regulated Ethernet services on the same basis to all retail providers. It’s noted in the report that “demand for legacy leased lines based on older technology has declined significantly,” with more providers switching to faster and cheaper Ethernet solutions instead.

The new consultation closes on 24th August 2012. Ofcom expects to publish a statement on its conclusions during early 2013. Further details on the regulators new pricing for BT services is due to surface within the “coming weeks“.

Ofcom’s Business Connectivity Market Review
http://stakeholders.ofcom.org.uk/consultations/business-connectivity-mr/…

UPDATE 15th November 2012

Open has opened a second consultation, which includes a few revisions to its original proposals.

http://stakeholders.ofcom.org.uk/consultations/bcmr-reconsultation/summary