Communications regulator Ofcom has controversially granted approval for KC ( Karoo ), the incumbent telecoms operator and broadband ISP for Hull and East Riding in Yorkshire UK, to bundle broadband, landline and other services.

The move will lead to slightly cheaper services for residents, though some rivals (e.g. TalkTalk UK) believe that the regulatory change is an "admission of defeat" by Ofcom (here), which has failed to force KC into making the market more competitive for rivals.

The outcome follows Ofcom's incredibly short one month consultation during August 2010 (here), in which the regulator claimed that allowing KC to offer bundles would be more helpful to local consumers than attacking their position of Significant Market Power (SMP) in the area.

However Ofcom has extracted several weak concessions from KC, which read more like advertising tips.

Restrictions on bundling will be removed provided that:

* bundles are made available to all residents and businesses in the Hull area;

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

* prices 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.

Up until last year both BT and KCOM were restricted from bundling their services because of their market dominance. BT was of course freed from this, 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.

KC does offer some degree of wholesale solution, although rivals have persistently complained that these are insufficient and note that no effective equivalent of BT Openreach's WLR3 services, or even SMPF/MPF wholesale access, exist.

Thankfully it's not all bad news for KCOM's rivals. Ofcom are consulting separately on enhancements to the processes involved in securing wholesale access to KCOM assets, although they've been attempting that for quite awhile. Meanwhile KC has wasted no time in getting ready to launch some new deals - http://www.k-c.co.uk/bundles#tab=home-bundles.

UPDATE 12th October 2010

KC's new bundles video.