INCA Blasts Ofcom for Rejecting Competition Concerns Over Openreach FTTP Price Cut

The Independent Networks Co-operative Association (INCA), which represents many of the UK’s alternative broadband networks, has today expressed its “huge disappointment” after Ofcom rejected the competition concerns they helped raise over a recent price cut to Openreach’s “full fibre” (FTTP) lines where proactive migrations are used.

Just to recap. Proactive migrations arise where an internet provider (ISP), not the end-customer, proposes to upgrade your older broadband service (ADSL, FTTC etc.) to FTTP and, at the same time, books an appointment for an engineer to carry out the upgrade. This forms part of Openreach’s efforts to eventually retire their old copper-line based network, services and exchanges.

Last month Openreach introduced a new offer for ISPs using this process, which essentially enabled customers to potentially be upgraded to their faster “1000/115Mbps [download/upload], 550/75Mbps and 330/50Mb bandwidth tiers for the rental price of 80/20Mbps” – lasting for up to 24 months (details). Suffice to say that this was quite a significant discount and would make upgrading much more attractive for some consumers and their ISPs.

However, a number of rival altnets told ISPreview that they viewed the new promotion, which is due to run until 9th April 2026, as being potentially anti-competitive (here). But the end of last week saw Ofcom largely reject those concerns (here), while at the same time pledging to carry out more work “over the coming months“, such as to understand the impact of the offer on Openreach’s average FTTP price levels and ISPs’ behaviour.

In response, INCA has today criticised Ofcom’s decision and accused Openreach of having “gone back on its word regarding further discounted offers”.

Paddy Paddison, CEO of INCA, said:

“This is extremely disappointing and inconsistent with Ofcom’s own objectives of promoting network competition. Altnets and their investors have responded to the government’s policy of promoting competitive network investment. They’ve invested billions of pounds in building full fibre networks in recent years to deliver faster, more reliable and highly competitive broadband services on the back of the government’s commitment to gigabit-capable roll out.

We have been pivotal to the UK’s rapid fibre deployment, bringing in much needed competition and choice into the broadband market and spurring BT Openreach to start its own fibre deployment. Despite that, BT Openreach is yet again allowed to squeeze margins below a reasonable level. It is Ofcom’s job to create a level playing field to foster network competition that will deliver the best deal for customers in the long run. The value offered by Altnets is clearly illustrated by the fact that last year three quarters of a million customers switched to Altnets.

Despite the government’s clear support for competitive network investment, including Project Gigabit funding for rural and high cost areas, it appears as if Ofcom intends to design regulation that instead allows BT Openreach to retain its stronghold on the market. The government’s recent Statement of Strategic Priorities consultation indicated clearly that government wants to promote network competition, Ofcom actions suggest that that it thinks otherwise.

This latest discounted offer risks undermining network competition by setting prices below that of a reasonably efficient operator (as calculated by Ofcom). The decision by Ofcom gives unfair advantage to BT Openreach, who have gone against their word, with their CEO previously stating to the regulator: BT Openreach does not have any current plans to change its Equinox 2 FTTP rental prices once launched and does not intend to initiate any further such changes during this market review.

Ofcom’s decision is likely to result in less choice, higher prices, and reduced innovation for consumers. We expect such an offer will encourage ISPs to accelerate the migration of their existing customer bases on copper broadband services to BT Openreach’s FTTP network, before they are able to migrate their bases to an Altnet.”

Openreach would perhaps argue that their special offer is of a different type and limited to a specific group of users on older copper lines, which is perhaps not directly comparable to the wider remit of Equinox 2. But that clearly isn’t going to hold much water with INCA, which sees a bigger picture of concerns emanating from the new offer.

Openreach’s CCO, Katie Milligan, also touched on this in October last year (here): “There are no plans for [Equinox 3 discounts on FTTP] at the moment. Openreach will do entirely what’s rational … but the priority for us at the moment is building the network at pace, and being the lowest cost builder and connector”. But as we said at the time, it’s always wise to take the phrase “no plans” with a pinch of salt, since it’s easily one of the most used and abused in the PR arsenal. Plans can and often do change, frequently at short notice.