The incumbent telecoms operator and broadband ISP for Hull and East Riding in Yorkshire (UK), KC ( Karoo ), could soon benefit after Ofcom today proposed to remove restrictions on service bundling. In theory the move could result in residents and businesses of Hull being able to benefit from cheaper broadband and phone bundles.

Up until recently both BT and KCOM (KC) were restricted from bundling their retail services because Ofcom ruled that both still had Significant Market Power (SMP); this provides a benefit to their rivals by restricting the kind of products that both could offer.

BT was of course freed from such restrictions at the end of last year, due in no small part to how aggressively competitive the UK phone and broadband markets had become. However KCOM continued to have SMP in its own somewhat isolated market, thus restrictions were retained.

Curiously, and without much else having changed in KCOM's situation, Ofcom now believes that these restrictions could leave Hull consumers disadvantaged. Hull residents would, Ofcom claims, be unable to access such bundles which are increasingly a major part of telecommunications competition.

The proposal's are subject to a number of conditions. In particular, Ofcom requires that:

* Bundles are made available to all residents (and businesses) equally in the Hull area; and

* Prices for bundles are published on KC’s website; and

* Prices for bundles are set in a way that will not discourage other communications providers from offering their services to consumers in Hull, should they wish to do so.

One distinct problem with this is that, as it stands, there is still precious little non-KC competition in the area. The two concessions that Ofcom seek to extract don't appear to be terribly tough either. The last one in particular is potentially a little too ambiguous.

According to Ofcom’s latest figures, half of UK consumers bought a bundle of two or more communication services in the first quarter of 2010, up from 29% in 2005. However we note that they also said exactly the same thing in 2009, suggesting that bundling itself has remained fairly static over the past year.

The consultation is only open until 2nd September 2010, which doesn't give rivals much time to have their say. Certainly giving consumers in the area a greater number of potentially cheaper package choices would be good news, though many would rather have an equally large number of alternative ISPs to choose from.