The UK Telecom watchdog, Ofcom has set rules and guidelines for BT to make sure the network provider keeps a sufficient margin between its wholesale and retail super-fast broadband charges.
Ofcom has implemented price margin controls to ensure BT does not exploit its dominant position and so that rival ISPs can fairly compete for fibre customers.
“The rules would mean that BT has to maintain a sufficient margin between its wholesale and retail superfast broadband charges to allow other operators profitably to match its prices,” Ofcom said.
“The proposals are aimed at ensuring that different operators can compete in the growing market in years to come, so that consumers benefit from competitive prices and high-quality, innovative services.”
TalkTalk, which had previously complained that BT was unfairly setting its wholesale prices too high and retail prices too low, claimed to have won a crucial battle.
However, the telecom regulator ruled out broadband provider TalkTalk’s complaint, which accused BT of not allowing it enough of a profit margin between wholesale and retail prices.
“Ofcom has investigated TalkTalk’s complaint under the Competition Act 1998, and has provisionally decided there are no grounds for action,” the watchdog said.
The decision was welcomed by BT, who said “We are pleased that Ofcom has rejected TalkTalk’s competition complaint and shown that BT’s fibre pricing is completely fair.”
“We hope it results in regulatory clarity and certainty, and discourages spurious claims such as that made by TalkTalk.”
TalkTalk also welcomed the proposal and said it expected the margin test to ultimately result in full price regulation.
“Not taking it as a snub at all,” a spokesman at the budget ISP told us.
“We’ve been 100 per cent focused on getting fibre robustly regulated for the next three years and that’s exactly what Ofcom is setting out today.”
