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Ofcom consults on changes to rules for telephone market
Thursday 19 March 2009 10:55:42 by Andrew Ferguson

Consultations from Ofcom are something that most people do not ever expect to read, but the decisions taken as a result of the consultations can have far reaching effects that affect us in the telephone and broadband markets.

Today sees Ofcom publish three consultations, the one most clearly of concern to the consumer is the review of narrowband retail markets. Narrowband refers to telephone and ISDN services, and the proposal on the table is to deregulate BT Retail in the areas of the UK where Ofcom has found competition to be healthy. The main effect of deregulation would be to allow BT Retail to offer bundles comprising, voice, broadband, mobile or TV, just as other providers do. BT Retail already markets all these products but with the removal of price controls, there is scope for deals whereby you get free calls if you take the broadband and TV package along with line rental. Additionally regional pricing may come into play.

The other consultations look at BT Network Charge Controls, and a proposal to allow BT to increase its charges above the Retail Price Index, whereas for the last few years cost reductions have been used to allow BT's competitors to get a good foothold in the market.

The third consultation considers the removal of some regulations for wholesale telephone products (e.g. Wholesale Line Rental - WLR) where Ofcom feels the market is competitive.

The narrowband market has been a fairly steady market in terms of overall numbers, but what has happened over the last few years is that BT has lost out on customers as products such as full LLU have taken off. One example is the rapid growth in size of Opal and its retail offering TalkTalk. Virgin Media has had a pretty static showing in terms of telephone lines, with no significant rise or fall. The mobile market is said to be killing off the traditional telephone line but there is no widespread evidence of this, although some interesting data does arise from the reports. 24% of households with an income of £11,000 or less do not have a landline, but for households with an income of £30,000 or greater this drops to 5%.

To reassure anyone who is panicking that these proposals may mean a removal of the USO for landlines, that is not under consideration. Unleashing the marketing power of BT Retail may however set alarm bells ringing at providers who have, to date, competed on just value for money- BT Retail may be able to pull a 'free' broadband option out of the bag.

Comments

Posted by CARPETBURN over 8 years ago
ofcom sucking up to BT again, or should that be sucking something of BTs again?
Posted by Dawn_Falcon over 8 years ago
Yea, like OFCOM suck BT's blood with their insistance on LLU. Wow, they're sucking a little less of it, when they shouldn't be sucking at all!
Posted by Spectre_01 over 8 years ago
lol @ CB, do you even bother to read the articles or just blindly post drivel?
Posted by andrew (Favicon staff member) over 8 years ago
Didn't cover this in the item, but the report shows how Ofcom has made BT reduce the costs at RPI - X for some years. Current changes will allow RPI + X.

Given RPI is probably lower than it has been for some years the difference may not be that great.
Posted by chrysalis over 8 years ago
the prime reason the landline market is surviving is that a landline is required for adsl.
Posted by comnut over 8 years ago
er, no. the landline *exclusively* covers more than 70% of the country, and cheaper than any wireless form there...
Posted by andrew (Favicon staff member) over 8 years ago
If people feel that naked DSL, i.e. no voice rental should be available then make representations to Ofcom.

Andrews & Arnold offer this, but the cost is the same as taking a cheap WLR deal.
Posted by CARPETBURN over 8 years ago
quote"lol @ CB, do you even bother to read the articles or just blindly post drivel?"

Drivel me? Im not the one that doesnt comprehend this equals price increase and some deregulation which is never a good thing, well maybe it is to BT fanboys that like to pay the heaven and earth to them.
Posted by CARPETBURN over 8 years ago
Oh and id address Dawn, but ITS constant wrongfull LLU rants are pretty boring now, i think IT is jealous they have a dog slow connection while others on LLU laugh in ITS face with there cheap well performing non capped and throttled to death nonsense
Posted by Somerset over 8 years ago
Would these be the LLU companies who pick and choose the exchanges. Great for the rest of the population.

CB - you are a sad person in the way you write. Try and grow up.
Posted by Dawn_Falcon over 8 years ago
Yea, we couldn't possibly remove most of the burdner of regulation from BT, let them slash their costs and see their prices fall, noo.
Posted by CARPETBURN over 8 years ago
quote"Would these be the LLU companies who pick and choose the exchanges. Great for the rest of the population."

Can i suggest you read some articles on ofcoms site. Its not just LLU companies that pick exchanges.

quote"CB - you are a sad person in the way you write. Try and grow up."

I could attack you in reply to this, but rather than that, as ive promised a staff member i wont and instead will just do as the BT fans do and report direct insults if they continue.
Posted by CARPETBURN over 8 years ago
quote"Yea, we couldn't possibly remove most of the burdner of regulation from BT, let them slash their costs and see their prices fall, noo."

Interesting you think deregulation even in a minor form will lead to lower prices... That so happened with the rail industry and gas and electricity didnt it? Oh no hang on it didnt and i forgot for a second you are easily confused.
Posted by CARPETBURN over 8 years ago
Maybe the BT fans could for a second comment on the story itself rather than my comments? Then again as is the case with most BT stories the compulsion to defend them is obviously too great for the regular BT huggers.
Posted by carrot63 over 8 years ago
Typically responses to Ofcom's 'consultations' run into the tens from consumers, and even then only if it's a contentious one. The truth is, it's a total waste of time and typing. Ofcom generally have their mind made up in advance, and will only take notice of the slick submissions from the 'stakeholders' (for which read 'industry paymasters').

I'd love to see someone cite a single example where there's evidence of a public submission making the slightest difference. I really hate to agree with CB, but all this will bring is more opaque and confusing pricing, and ultimately higher bills.
Posted by Dawn_Falcon over 8 years ago
Carpet, and neither were they spending a massive amount of their money on services the government demanded they offer. A small fraction of what BT is forced to spend, indeed.

The situations are not equivalent.

And the response to the story, again, is OFCOM should have NO role in this.
Posted by CARPETBURN over 8 years ago
quote"I really hate to agree with CB, but all this will bring is more opaque and confusing pricing, and ultimately higher bills."

Im glad someone else was able to put business like thought into this and not just blindly support BT like certain so called obviously brainwashed lifeforms.
Posted by Dawn_Falcon over 8 years ago
Well yes, Carpet, if you increase the regulation, you'll get higher prices, less clarity on pricing and so on. If they entirely stood aside, market forces would be able to act. And they don't favour the inefficient or the slow to react.

Again, this is blindingly obvious except to people who try and deny realities like their dependence on BT lines.
Posted by CARPETBURN over 8 years ago
quote"Well yes, Carpet, if you increase the regulation, you'll get higher prices, less clarity on pricing and so on."

WHAT!! That makes no sense, an UN-regulated company or little regulation in specific areas means increased pricing to whatever that company wants, not the other way round.
You only have to look at the railway and how we pay the most in Europe for an average journey ticket.
Posted by Dawn_Falcon over 8 years ago
It makes perfect sense.

BT is forced to spend a vast amount of it's operating capital on it's competitors services, allowing it to compete freely in the market as it should would allow it to save massively, and cut prices.

Also, lots of other European countries have private railways, with lower costs. Why? Less regulation and sensible lenghts on operating liscences, which are overly short and force companies to seek immediate returns.
Posted by CARPETBURN over 8 years ago
quote"Also, lots of other European countries have private railways, with lower costs. Why? Less regulation and sensible lenghts on operating liscences"

OMG you really have no clue at all, though go on im listening which European country has shorter operating licenses..... In fact hold on if the license is shorter why are prices cheaper, again that makes no sense..... 'We have only a short term license, so lets not make any money and keep things cheap for the customer'
You really do like to try to argue but ALWAYS FAIL trying backing up your gibberish for a change.
Posted by CARPETBURN over 8 years ago
DE-REGULATION = COMPANY CAN DO AS GOOD AS THEY PLEASE..... If a company can do as it pleases its gonna charge as much as it can not as little, my god you obviously never studied business or economics.

Cheaper service indeed if prices are not regulated LOL, that ladybird maths book really isnt cutting it.
Posted by Dawn_Falcon over 8 years ago
No, they have *longer* operating liscences. Allowing companies to make sensible medium-term investments in things like rolling stock. In the UK, they have to start showing a profit very quickly, limiting investment.

And cutting the massive burden of regulation, allowing prices to fall? This is called economics, not "ladybird maths". Yes, technically they "could" raise prices.

Less regulation | No regulation. A simple assurance that they won't raise prices for the average consumer, for example, compared to the massively detailed tests on every aspect of service which occur now...
Posted by CARPETBURN over 8 years ago
You have no clue how railway licencing works in the UK... Its actually very short amounts of time they are given. The french TGV as an example has had the same operator for much longer than some areas and rail companies in the UK... Im still waiting on your example of Rail companies in Europe where licencing is shorter than the UK.
Posted by CARPETBURN over 8 years ago
quote"Less regulation | No regulation. A simple assurance that they won't raise prices for the average consumer, for example, compared to the massively detailed tests on every aspect of service which occur now..."

OMG talk about talking nonsense... Lets say i currently regulate what you can say, if i remove some of that regulation then according to you, you would start to talk common sense... FAT CHANCE!
Posted by CARPETBURN over 8 years ago
Maybe you could explain how privatised gas and electric firms (another good example) whacked their prices up yet the wholesale price they pay has been on the decrease since mid(ish) FEB. I suppose you think they reduced prices we should all get within the next month out of the kindness of their heart and no regulatory body got involved?
Honestly get a clue, Less regulation any idiot knows means a company can do more as they please...
Posted by CARPETBURN over 8 years ago
Business exists to make money, even an idiot can comprehend if they are not regulated or less regulated they will make as much money as they can, NOT reduce what they charge and only reduce it when someone whacks their knuckles.
Posted by CARPETBURN over 8 years ago
In fact i dont even have to argue with you about this, there has been TWO recent news stories on this very site about BT increasing charges..... (ill link if you are incapable of finding them) You like to try to brain wash people with dribbling BT are good nonsense like they have brain washed yourself. I suspect you missed that though.
Posted by Dawn_Falcon over 8 years ago
No, you don't, and indeed you can't because "to argue" would indicate you have an argument. (See: You completely *agreeing* with what I said on railways)

Yes, BT are forced to charge high because of the massive regulatory burden on them, and when their costs rise they can't afford to absorb them, and have to pass them on.

And the gas and electric firms, the government forced them to take out long-term contracts on gas at the HEIGHT of gas prices, so the wholesale price drop simply isn't something they're benefiting from!
Posted by CARPETBURN over 8 years ago
quote"BT are forced to charge high because of the massive regulatory burden on them"

What exactly do they regulate apart from rip off prices to other ISPs?

Oh and no idea about what happened with Gas pricing either... Back in your box now please.
Posted by Somerset over 8 years ago
'Back in your box now please.'

Meaning?
Posted by CARPETBURN over 8 years ago
quote"'Back in your box now please.'

Meaning?"

Being the grammar police that doesnt like text speak ill leave you to consult your litrature and figure it out.
Posted by Dawn_Falcon over 8 years ago
Meaning he's afraid of the truth as usual.

"What exactly do they regulate apart from rip off prices to other ISPs?"

Um, if you even have to ASK that question...
Posted by CARPETBURN over 8 years ago
quote"Meaning he's afraid of the truth as usual."

Oh that will be the mythical truth DE-regulaton will lower BT prices in your bubble world even though this site has recently reported 2 seperate BT price hikes? If im afraid of the truth then by your own admission news on this site lies and your the only one speaking the truth. I ask again what do BT regulate, they are nothing more than a private business they dont regulate anyone.
Posted by Dawn_Falcon over 8 years ago
BT has to hike the prices. Why? Becuase they are spending massive amounts of revenue on complying with regulation, and seeing revenue bleed to the LLU companies across their network
rather than them. This means higher prices, period. Remove them, and investment goes up and prices fall. (Not no regulation, sensible minimal regulation)

And... er... government regulation. That was a silly statement even for you, Carpet.
Posted by CARPETBURN over 8 years ago
quote"BT has to hike the prices. Why? Becuase they are spending massive amounts of revenue on complying with regulation, and seeing revenue bleed to the LLU companies across their network
rather than them."

Please point to evidence that shows on a monthly basis LLU costs BT more than what BT are making.
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