National Broadband News

Fibre optic broadband could get cheaper under new Ofcom proposals

20th June 2014
Fibre optic broadband could get cheaper under new Ofcom proposals

Ofcom is looking at what BT charges other providers and people for fibre optic broadband, which could see prices go down.

The telecoms regulator has proposed new requirements on BT to promote competition in the growing market for superfast broadband 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.

Different operators currently retail superfast broadband over BT’s network, using a process known as ‘virtual unbundled local access’ (VULA). BT has flexibility to set the wholesale price for providing this access to its network.

Ofcom is proposing to put in place a regulatory condition requiring BT to ensure that the margin between its wholesale VULA charges and its retail superfast broadband prices is sufficient for rival operators to compete and make a profit.

BT currently provides BT Sport free to its superfast broadband customers, and the proposed new rules would take into account the costs and revenues of these sport channels.

When Ofcom introduced the requirement for BT to offer other providers access to its fibre network, there were fewer than 100,000 superfast broadband connections provided this way. That number has now risen to 2.7 million, and take-up is expected to increase further over the coming years.

According to recent Ofcom research, one in four UK residential fixed broadband connections is now ‘superfast’, offering a headline speed of 30 Mbit/s or more.

Ofcom’s proposals are aimed at ensuring that different operators can compete in the growing superfast broadband market in years to come, so that consumers benefit from competitive prices and high-quality, innovative services.

Ofcom expects to publish a final statement on its decisions regarding BT’s superfast broadband margin later in the year.