{"id":35656,"date":"2023-09-13T00:01:43","date_gmt":"2023-09-12T23:01:43","guid":{"rendered":"https:\/\/www.ispreview.co.uk\/?p=35656"},"modified":"2023-09-13T12:45:35","modified_gmt":"2023-09-13T11:45:35","slug":"inca-accuse-bt-of-spiking-broadband-prices-in-uncompetitive-uk-areas","status":"publish","type":"post","link":"https:\/\/www.ispreview.co.uk\/index.php\/2023\/09\/inca-accuse-bt-of-spiking-broadband-prices-in-uncompetitive-uk-areas.html","title":{"rendered":"INCA Accuse BT of Spiking Broadband Prices in Uncompetitive UK Areas"},"content":{"rendered":"

The Independent Networks Co-operative Association<\/a> (INCA), which represents UK alternative networks, will today publish a new report that accuses broadband ISP BT<\/a> of charging customers up to 29% more per month for the same broadband product in areas without infrastructure competition.<\/p>\n

At the time of writing we haven’t yet had a chance to fully read the report, but INCA claims that it – taken across a full range of packages – shows how BT<\/a> charge on average 25% more for the same broadband product if there isn\u2019t a competing network provider in that postcode. In some locations, BT<\/a> allegedly even sells its Full Fibre (FTTP<\/a>) 500Mbps + Digital Line package at 38% higher than its lowest price for that package.<\/p>\n

NOTE:<\/strong> Openreach<\/a>’s (BT) national FTTP<\/a> network covers 11 million UK premises and they aim to reach 25 million, funded by up to \u00a315bn, by December 2026 (c. 80%+ of the UK).<\/div>\n

\"INCA-BT-Full-Fibre-Price-Comparison\"<\/p>\n

However, INCA seems to reserve most of its criticism for Ofcom<\/a>, which it accuses of implementing regulation that assists the incumbent and thus jeopardising a government-supported competitive environment that benefits consumers. The report – “Securing long-term benefits for broadband customers<\/em><\/a>” – urges the government to ensure that Ofcom<\/a> delivers against policy and acts in the interest of consumers by:<\/p>\n

INCA’s Key Recommendations<\/strong><\/span><\/p>\n

\u27a4 Improving the transparency of Ofcom<\/a>\u2019s decision making and showing how each decision delivers against Government\u2019s policy objectives.<\/p>\n

\u27a4 Clearing up consumer confusion over the use of the term ‘fibre’.<\/p>\n

\u27a4 Incentivising large national internet service providers to use Altnet networks.<\/p>\n

\u27a4 Structural reorganisation of Ofcom to ensure prioritisation of telecoms and broadband as a key organisational responsibility.<\/p><\/blockquote>\n

Finally, the report also recommends that BT Group be split, with their physical Openreach<\/a> infrastructure business (its duct and pole company) being sold off into a separate organisation without common ownership with BT. Ofcom has previously rejected this in favour of a different, and less complex and contentious, approach. At present Openreach<\/a> is classed as a “legally separate<\/em>” company from its parent, with its own independent identity, employees and board etc. The operator is also required to treat all ISPs equally and fairly.<\/p>\n

INCA believes that such a change might reverse the current situation where BT, they say, as the largest retail broadband ISP in the country, has publicly stated that it will never use another network provider other than Openreach and to remove any perceived differences in conditions between AltNet fibre network builders and BT. Certainly that’s not impossible, but it might also risk delaying or damaging Openreach’s own FTTP<\/a> build.<\/p>\n

Malcolm Corbett, INCA Chief Executive, said:<\/strong><\/p>\n

“INCA considers the continued integration of the physical infrastructure parts of Openreach with the remainder of Openreach, and with the remainder of BT Group, to be the underlying cause of many of the issues identified in this report.<\/p>\n

Enough time has been allowed for functional and legal separation to deliver and both have failed. It is therefore time for a full structural separation of the passive infrastructure components of Openreach from the remainder of the group.”<\/p><\/blockquote>\n

According to INCA, if the government were to adopt its recommendations, then they could provide a “critical boost to investor confidence that should lead to more than 85% of UK properties having access to full fibre broadband by the end of 2025, potentially exceeding Government\u2019s coverage ambitions<\/em>” (at present FTTP alone covers just over 52%, rising to over 75% for “gigabit-capable<\/em>” lines).<\/p>\n

Admittedly, that\u2019s a big assumption, although no doubt investors would start to view AltNets in a more positive light, again, particularly as many such networks have recently been struggling due to rising build costs, competition and the need to grow take-up to a viable level. But to be fair, even the likes of Openreach have faced some strain from these issues.<\/p>\n

We should also point out that the Government’s target under Project Gigabit<\/strong> isn’t FTTP specific – they are more broadly aiming for gigabit-capable networks to reach \u201cat least<\/em>\u201d 85% of UK premises by the end of 2025 (Virgin’s old HFC lines are helping a lot, but even they’ll be FTTP by 2028 too), followed by \u201cnationwide<\/em>\u201d coverage (c.99%) in 2030 (here<\/a>). Ofcom’s own coverage projection suggests that the 85% mark should be reached by around mid-2025, which will be largely thanks to existing commercial builds doing the first 80%+ (here<\/a>).<\/p>\n

Naturally, INCA represents BT \/ Openreach’s competition and so has a vested interest in weakening their biggest rival, although it’s also fair to say that the notion of broadband services costing more in areas with less competition is nothing new in this market (the term “postcode lottery<\/em>” is often coined). One reason for that is because such areas cost more to build into and maintain, with operators needing to recoup that investment somehow.<\/p>\n

The situation perhaps partly reflects the fact that such areas are often reflective of rural communities, or those patches of urban or semi-urban areas where delivering such upgrades can be more costly than normal. As such, it’s not unusual for the delivery of services into these areas to be priced higher, which is not merely an issue of competition – we’ve seen plenty of rural focused AltNets charging more than their urban counterparts too.<\/p>\n

However, on this point, INCA’s report does cause some confusion as one example they gave us was between two fairly urban locations. Upon checking, both locations had access to at least 2-3 gigabit-capable networks. A second postcode example was then supplied that made more sense as it was in a rural area, where only Openreach’s FTTP was present. But after checking, we found this was for a new build homes site – those can be a bit of a special case. In total, we’re told that tests in 62 postcodes were used to create the report.<\/p>\n

Finally, when looking at this topic, we think INCA would have been wise to remember that there are hundreds of other ISPs on Openreach’s network (the prices they charge ISPs for FTTP have no geographic discrepancy), often via a variety of different wholesale suppliers (e.g. Talk Talk Wholesale, BTWholesale etc.). Taking a deeper dive here would thus help to establish whether the pricing disparity is restricted to specific providers – competition in this market is a lot more diverse than just BT.<\/p>\n

In fact, we often find it difficult to pin down BT’s own consumers prices ourselves due to issues of A\/B product testing, periodic regional\/localised pricing discounts and affiliate offers – meaning that we sometimes get 3-4 different prices for the same product across different postcodes, which irrespective of local network competition. Suffice to say, there’s a risk that this could have also polluted or confused INCA’s data.<\/p>\n

BT Spokesperson told ISPreview:<\/strong><\/p>\n

“The UK broadband market is highly competitive. Even in areas where Openreach is the only network provider, there remains huge competition at a retail level, with over 600 companies able to provide services over their network.”<\/p><\/blockquote>\n

As it stands, in 2021 Ofcom gave Openreach a “fair bet<\/em>” (here<\/a>) to encourage their investment into rolling out FTTP more widely by pledging some regulatory certainty, at least until 2030 (i.e. softer regulation to help foster deployment). Put another way, we think it highly unlikely that the regulator will fundamentally change their approach anytime soon.<\/p>\n

On the other hand, INCA probably has one eye on Ofcom’s next batch of market and strategic industry reviews. Not to mention the fact that a different government may be elected in the not-too-distant future, which may or may not usher in a more receptive set of ears. Getting a first mover advantage in that debate won’t do INCA any harm.<\/p>\n","protected":false},"excerpt":{"rendered":"

The Independent Networks Co-operative Association (INCA), which represents UK alternative networks, will today publish a new report that accuses broadband ISP BT of charging customers up to 29% more per month for the same broadband product in areas without infrastructure competition.<\/p>\n","protected":false},"author":1,"featured_media":33111,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"ngg_post_thumbnail":0,"footnotes":""},"categories":[1],"tags":[474,56,36,38],"class_list":["post-35656","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-uk_isp_news","tag-bt","tag-fttp","tag-ofcom-regulation","tag-politics"],"share_on_mastodon":{"url":"","error":""},"yoast_head":"\nINCA Accuse BT of Spiking Broadband Prices in Uncompetitive UK Areas - ISPreview UK<\/title>\n<meta name=\"description\" content=\"The Independent Networks Co-operative Association (INCA), which represents UK alternative networks, will today publish a new report that accuses broadband\" \/>\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\/2023\/09\/inca-accuse-bt-of-spiking-broadband-prices-in-uncompetitive-uk-areas.html\" \/>\n<meta property=\"og:locale\" content=\"en_GB\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"INCA Accuse BT of Spiking Broadband Prices in Uncompetitive UK Areas - 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