Competition Spat Erupts on Jersey as JT Replace Old Broadband Packages

The on-going roll-out of an ultrafast Fibre-to-the-Home (FTTH) broadband ISP network on Jersey (Channel Islands) by JT Global (Jersey Telecom) will have many benefits but it also means lots of changes, such as the eventual removal of “all copper services”, and some aspects of this transition have now triggered a competition row.

The latest situation began last week after JT announced a series of changes, which promised a “considerable increase in speeds following a major change in the way broadband is provided in Jersey“, that would be introduced from 1st July 2014 (note: existing customers have been given until 14th June to decide what they want to do).

Under the plan all customers on the new fibre broadband network would receive “guaranteed speeds” of at least 50Mbps, with prices starting from £22.99, which will be frozen until 2017. Meanwhile users of JT’s old copper-based broadband network would have the option of receiving the maximum speed their line can deliver (up to 20Mbps) for £22.99 (replacing the current 4,8,16Mbps services).

In addition, JT said they would continue to provide a basic 2Mbps “mobile broadband” product for simple e-mail use and web browsing at the current price of £17.99 until 2016. Alternatively, customers currently on a 2Mbps service can sign up to an 18-month contract on the new broadband service (up to 20Mbps on copper or 50Mbps via fibre) and continue to pay £17.99 per month for the duration of that contract (keeping their current usage allowance); although this price would eventually rise to £22.99.

The announcement prompted local ISPs Sure and Newtel to raise concerns of anti-competitive behaviour with the Channel Islands Competition and Regulatory Authorities (CICRA), which in turn agreed that the most urgent issue was with JT’s “new” 2Mbps product. One of the reasons for this is apparently because JT has also increased the wholesale charge (the amount it charges other ISPs) by £3 per month per subscriber.

As a result the rivals complained that the margins were unsustainable and that JT’s retail arm was thus benefitting from favourable treatment (prohibited under JT’s licence from CICRA).

Michael Byrne, CICRA Interim CEO, said:

“After the 18 month period the 2Mb/s service will no longer be available and customers will automatically be moved to a much faster broadband product of up to 20MB/s but at an increased cost of £22.99 per month.

CICRA recognises that customers will receive a faster service but has received complaints from customers aggrieved with not having a choice and being required to upgrade to a product they do not require and that will result in a significant increase in monthly bills at the end of the 18 month period.

If operators are unable to offer a product to rival JT in the short term they could exit the market leaving consumers with less choice and higher priced options in 18 months time. CICRA has also identified a series of actions by JT in the course of rolling out its fibre network which appear to disadvantage its competitors, be at the expense of fair competition and, ultimately, to the disadvantage of Jersey broadband customers.”

Byrne pledged that CICRA will now proceed with its investigation of these actions through a formal process in the interest of protecting consumers and the competitive process, although no timescale is given for this work.

Meanwhile JT said, given the radical shake-up of their broadband network, that it was “no surprise at all that the regulator wants to take a close look” at their changes. But their words soon became less polite when discussing Sure and Newtel.

JT Statement

Effectively, JT is now being criticised for being too competitive. On that basis, it should come as no surprise at all that our competitors have complained – but it’s a little rich for Sure to be upset about our wholesale pricing to them in Jersey, when they actually charge us a higher wholesale price, as the network owner, in Guernsey!

We sincerely hope that the regulator will allow us to provide these better broadband services to our customers. We always said that they were subject to regulatory approval, and we hope that once we have clarified for the regulator exactly what we are offering, they will have no further issues with us reacting to our customers’ requirements in this way.

Meanwhile more than 30% of JT customers have now been switched to the new fibre network, with the rest due to be swapped before the end of 2016 when the service will have become available to around 42,000 local premises.