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Ofcom Start Review of UK Fixed Line and Wholesale Broadband Markets

Friday, November 9th, 2012 (1:24 pm) - Score 874

The UK communications regulator, Ofcom, has today launched two new reviews that aim to examine the effectiveness of competition between telecoms operators in both the Fixed Access Market and the Wholesale Broadband Access Market (WBA). A major focus will be on the impact of new super-fast broadband services.

Related reviews have traditionally resulted in new procedures and other remedies that can boost competition and lower prices in some areas, while doing the opposite in others (i.e. removing charge controls etc.).

Part of this process usually rests on whether or not a specific telecoms operator, such as BT, is deemed to have Significant Market Power (SMP) in a particular field as this may require stricter regulation to improve competition. For example, past reviews have helped to develop cheaper unbundled (LLU) services as a means of giving ISPs more control over BT’s national broadband and phone network.

The first Fixed Access Market Review aims to examine competitive conditions in the following fixed access markets over the period from April 2014 to March 2017:

The Relevant Fixed Access Markets
* The Wholesale Local Access (WLA) market;
* The Wholesale Fixed Analogue Exchange Line (WFAEL) market;
* The Wholesale ISDN30 market;
* The Retail and Wholesale ISDN2 market; and
* Various additional markets in Hull – residential fixed narrowband analogue access, business fixed narrowband analogue access and retail ISDN30.

The FAM review will also look at the emergence of superfast broadband / Next Generation Access (NGA) services, although Ofcom warned it was “conscious that investment and take-up of these new networks and services is still at an early stage” (at the last review they barely even existed) and would thus structure any “NGA interventions” to promote new investments whilst at the same time “maintaining competitive choice” for consumers.

In other words BT probably won’t face aggressive adjustments to their existing FTTC and FTTP products because the regulator doesn’t want the operator to feel as if it cannot gain a return on their existing £2.5bn privately funded investment, which aims to make superfast broadband available to 66% of the UK by spring 2014. But some changes may be necessary to give rival ISPs, such as Sky Broadband and TalkTalk, more price and general flexibility to help differentiate their products.

Ofcom’s related review of the WBA market will somewhat overlap this area and focus on all of the different broadband services within BT and KC’s (Hull) coverage. Both reviews have called for any input to be submitted by 5pm on 20th December 2012 which, given the complexity of the sector, seems like a surprisingly short period of time.

It’s worth remembering that Ofcom’s previous reviews effectively gave BT a period of grace (thought to be roughly 5 years) with which it could roll-out superfast broadband and not have to face any stiff regulatory intervention. But that period has already run half its course and Ofcom is now looking to the future.

Review of the Wholesale Broadband Access Markets
http://stakeholders.ofcom.org.uk/consultations/review-wholesale-broadband/..

Review of the Fixed Access Market
http://stakeholders.ofcom.org.uk/consultations/fixed-access-markets/..

Leave a Comment
4 Responses
  1. Avatar dragoneast says:

    I hope I’m wrong (and it probably has all to do with its statutory remit forever locked into 1985) but Ofcom seems so hung up on micro-competition as the be-all and end-all, that it doesn’t seem to look at all at the future of telecomms services and surely that’s the phasing out of the obselete analogue network, which is happening elsewhere. No strategic vision, just tinkering?

    1. Avatar Bob says:

      That though gives little real competition and most ISP’s just repackage and resell the BT product. It is about as daft as saying that if there was only one car manufacture that as long as you have several dealers you have competition.

      I suspect the EU reviewing the BDUK funding has triggered OFCOM to belatedly review the situation.

      We really ned another proper wholesale provider but that requires fair access to the BT ducting. I am sure that the BT fans wil claim that already exists but the fact that we have so far ended up with ZERO competion for BT with the BSUK funding clearly indicates the market is not working.

      If you want FTTC you have only BT and even at the reselling level there is very limited competition so as far as competion is going we are now going backwards and are getting far less competition than with ADSL

      If competetors had fair acces to the BT ducting I would see them focusing on FTTP which gives them a competative edge over BT. THey have no coper legacy network to try to eke out

    2. Avatar FibreFred says:

      Bob who has come forward saying that they want to deploy FTTP using PIA but the charges are preventing them from doing so?

      I’ve seen Virgin whinge about pricing but who said specifically said “We are wanting to launch at FTTP package but cannot do so because of the high PIA pricing”

  2. Avatar Bob says:

    Clearly the Market has failed when of the hundreds of BDUK contracts only BT has won them. THey can be no other explanation for that other than market failure. In many cases only BT bid and the most had only two bidders with the second bidder droping out before contract award

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