February 7, 2016
Ofcom has agreed to review the price that BT is allowed to charge companies for sharing its network.
The communications regulator has agreed to a preliminary review, which could result in BT being given greater flexibility on pricing.
The decision is likely to cause concern among companies such as Carphone Warehouse and Tiscali, who could have to pay more for products such as local loop unbundling (LLP) – the process where BT gives them access to its local network so they can supply their own fast internet services.
According to analysts, the review could allow BT to charge rivals up to an additional £3 per fully unbundled line per month – a fully unbundled line currently costs £6.67.
BT’s Openreach division was created to manage LLP in 2003, after Ofcom reviewed BT’s control of connections between people’s homes and the local telephone exchange. Openreach’s remit was to ensure fair access to its network for all operators.
When Openreach was created, BT was promised that it would make a 10 per cent regulatory return on investment through this arrangement. The company now claims that it is unable to achieve this under the current arrangements.
Ofcom will initially conduct an informal review into the matter, and if a formal review is necessary, this will take place later this year.