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UPDATE UK Competition Tribunal Forces BT and Ofcom to Cut Broadband ISP Prices

Posted: 13th Oct, 2010 By: MarkJ
bt uk cheap broadband and phoneThe Competition Appeal Tribunal (CAT), a specialist UK judicial body that rules on cases involving competition or economic regulatory issues, has ordered BT to cut its unbundled ( LLU ) broadband and phone line access prices to rival ISPs.

The ruling revealed that BT's price controls, which Ofcom imposed during May 2009, had been set too high because they failed to factor in account efficiency and inflation. However BT believes their prices are already too low and expects any adjustment to be in the form of "minor changes".

Rivals ISPs TalkTalk and Sky Broadband (BSkyB), which brought the original complaint, will be disappointed to learn that the overall adjustment equates to approximately £4 Million. That might sound like a lot but it quickly diminishes in significance over tens of millions of connections.

Ofcom has been told to adopt the new price controls ASAP, which has to happen before BT is legally bound to comply. We do not expect ISPs to pass such a meagre saving on, although it will depend on how the regulator chooses to make its final adjustments.

UPDATE 14th October 2010

Ofcom has now published full details of its new price adjustments (Download the PDF) and, much as expected, they're tiny and won't make a difference to end users.

Until the ruling Ofcom had planned to charge £90.46 for the annual rental of a fully unbundled line (MPF) and £15.63 for a shared unbundled line (SMPF). This has now been reduced to £89.10 and £15.04 respectively.
As per the Tribunal’s Directions:
2.2.1 the MPF services annual rental charge is amended to £89.10 for the remainder of the charge control period;

2.2.2 the SMPF services annual rental charge is amended to £15.04 for the remainder of the charge control period;

2.2.3 the ancillary service MPF New Provide is moved out of the basket of MPF Ancillary Services;

2.2.4 the MPF New Provide Charge.
We should like to clarify that this does not affect BT Wholesale based services, it is primarily focused upon LLU ISPs like Sky Broadband , TalkTalk and O2 etc.
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