Ofcom proposes new wholesale charge controls for Openreach

Ofcom has notified the European Commission of provisional new charge controls that will apply to certain services provided by Openreach, BT’s wholesale access division. Ofcom will adopt the new controls, subject to the outcome of the European Commission’s new consultation process.

The prices are regulated by Ofcom because Openreach has been found to have significant market power in the delivery of these services.

Ofcom is publishing its draft decision to provide transparency of the European Commission notification process as this is the first time this new procedure has been used for a major regulatory decision on telecoms in the UK.

Ofcom is proposing the following controls on annual rental charges (which are expected to run until 31 March 2014):

A fully unbundled line to a property – where a communications provider takes over the line to provide broadband and telephone services. The price currently charged by Openreach is £91.50. Under Ofcom’s draft decision this will be set to £87.41 for financial year 2012/13 and decrease further in the next year in accordance with the formula RPI -5.9%.

A shared unbundled line to a property – where a communications provider uses a proportion of the line only for the provision of broadband. The wholesale price today is £14.70 per year. Under Ofcom’s draft decision this will be set to £11.92 for financial year 2012/13 and decrease further in the next year in accordance with the formula RPI -15.9%.

Wholesale line rental – used by communications providers to offer telephone services to consumers using lines rented from Openreach. The price today is £103.68 per year. Under Ofcom’s draft decision this will be set to £98.81 for financial year 2012/13 and decrease further in the next year in accordance with the formula RPI -7.3%.

Ofcom expects to publish a final decision in early March.

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