{"id":24998,"date":"2020-11-29T11:29:51","date_gmt":"2020-11-29T11:29:51","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=24998"},"modified":"2020-11-29T11:29:51","modified_gmt":"2020-11-29T11:29:51","slug":"talktalk-considers-legal-action-to-stop-openreach-price-rises","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2020\/11\/talktalk-considers-legal-action-to-stop-openreach-price-rises.html","title":{"rendered":"TalkTalk Considers Legal Action to Stop Openreach Price Rises"},"content":{"rendered":"

Budget UK phone and broadband ISP TalkTalk<\/a> has reportedly approached Sky Broadband<\/a> and Vodafone<\/a> about the possibility of combining forces in a legal challenge to halt a key change in Ofcom<\/a>’s Wholesale Fixed Telecoms Market Review 2021-26 (FTMR), which could result in Openreach<\/a> (BT<\/a>) charging higher wholesale prices.<\/p>\n

The regulator’s FTMR – see our summary<\/strong><\/a> – is currently attempting to improve the business case for operators’ that are investing in the rollout of gigabit-capable “full fibre<\/em>” networks. At present the biggest of those is Openreach<\/a>, which has pledged via BT<\/a> Group to invest \u00a312bn<\/strong> in order to ensure that their new Fibre-to-the-Premises<\/strong> (FTTP<\/a>) lines can reach 20 million UK homes by the mid to late 2020s (i.e. 2025 – 2030).<\/p>\n

NOTE:<\/strong> At present c.34% of the UK<\/a> can already access a gigabit network (via HFC DOCSIS<\/a> and FTTP<\/a> combined), while FTTP<\/a> by itself covers c.18%.<\/div>\n

As part of this Ofcom<\/a> is intending to move away from cost-based charge controls on copper services, such as fully unbundled lines (MPF) and FTTC<\/a> (i.e. encouraging ISPs like Sky Broadband<\/a> and TalkTalk<\/a> to go fibre), which will increase by inflation (CPI). Meanwhile, for the hardest to reach premises (e.g. rural), they will allow Openreach<\/a> to spread the cost of investment in fibre across a wider group of consumers (e.g. allowing them to recover some investment costs from both copper and fibre products).<\/p>\n

However, this means ISPs that have previously invested a lot in their copper services, such as TalkTalk<\/a>, Sky Broadband<\/a> and Vodafone<\/a>, may be forced to stomach bigger price increases at the wholesale level and that in turn will have to be passed on to their broadband customers (not something any provider enjoys having to do).<\/p>\n

TalkTalk has previously warned that “this proposal would lead to consumers\u2019 broadband bills being about \u00a3900m<\/strong> higher over the charge control period compared to cost-based prices,<\/em>” while a separate study from Vodafone<\/a> suggests that the extra cost impact could hit \u00a33.2bn<\/strong> for the 2021 to 2026 period in total.<\/p>\n

According to the Sunday Times<\/a> (paywall), TalkTalk is now mulling over the possibility of taking legal action to stop or change Ofcom<\/a>’s proposal and they’ve called on Sky and Vodafone to join. The newspaper claims that Vodafone has already declined the proposal, while Sky are said to be considering it.<\/p>\n

Meanwhile the regulator, which has the incredibly difficult job of having to balance all these competing considerations (each side has its own vested interests and inevitably will always be winners and losers), remains adamant that Openreach deserves the chance to make a “fair return<\/em>,” particularly given the huge private investment they’re intending to make (BT<\/a>’s plan to invest \u00a312bn is partly based on Ofcom’s direction in this review).<\/p>\n

At the same time, we shouldn’t forget that Openreach is facing rising competition from alternative FTTP networks, many of which have adopted aggressive pricing in the hope of peeling away some of the incumbents base as they rollout. Suffice to say that Openreach may soon be able to gain a greater return via existing products, but today’s market for full fibre is much more competitive than the copper-centric one that existed ten years ago.<\/p>\n

As it stands TalkTalk may well wait to see Ofcom’s final decision, which is due before March next year, before deciding whether to launch a legal appeal against the changes.<\/p>\n","protected":false},"excerpt":{"rendered":"

Budget UK phone and broadband ISP TalkTalk has reportedly approached Sky Broadband and Vodafone about the possibility of combining forces in a legal challenge to halt a key change in Ofcom’s Wholesale Fixed Telecoms Market Review 2021-26 (FTMR), which could result in Openreach (BT) charging higher wholesale prices.<\/p>\n","protected":false},"author":1,"featured_media":22885,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[474,36,69,66,74,96],"class_list":["post-24998","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-bt","tag-ofcom-regulation","tag-bt-openreach","tag-sky-broadband","tag-talktalk","tag-vodafone"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"\nTalkTalk Considers Legal Action to Stop Openreach Price Rises - ISPreview UK<\/title>\n<meta name=\"description\" content=\"Budget UK phone and broadband ISP TalkTalk has reportedly approached Sky Broadband and Vodafone about the possibility of combining forces in a legal\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.ispreview.co.uk\/index.php\/2020\/11\/talktalk-considers-legal-action-to-stop-openreach-price-rises.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"TalkTalk Considers Legal Action to Stop Openreach Price Rises - 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