BT Wholesale has a had a two tier approach to its BT IPStream product pricing for a while, and with Ofcom now granting a variation in undertaking as asked for by BT, there is wider scope for the prices of IPStream products to vary across the country.
Ofcom has effectively divided the UK into a number of market areas based on the amount of competition in the area. The definitions were covered back in our news during November 2007. The area that Ofcom has granted the variation in is Market 3, which is defined as those areas with 4 or more principal operators and the exchange serves more than 10,000 premises. Market 3 covers 69.2% of UK premises.
The full document detailing the variation and comments from interested parties during the consultation period can be found on www.ofcom.org.uk, but be warned it is a 30 page document that is not a light read.
The proposal, while affecting IPStream now, covers the 21CN WBC product range also, which while available is still relatively low volume due to low coverage and the small number of providers (believed to be 8) supplying it. The freedom in pricing means it is impossible to know what BT Wholesale will do, it may try and take on the competition from LLU providers and reduce prices, or it may decide that those remaining with them in Market 3 will remain even if prices are raised slightly, and this may then be used to fund new product roll-out such as the fibre products, or simply subsidise the costs for providing broadband to the remaining 4000 or so telephone exchanges.
One interesting aspect is that the removal of the rules means BT Wholesale in the Market 3 area could release a product for a single provider, so if BT Retail or anyone else for that matter wanted a new Video over Broadband product that maybe had servers closer to the consumer, reducing network costs or ideally in the exchanges BT Wholesale can work on and release this without any requirement to offer the product on the same basis to all other providers.