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Ofcom reconsult on wholesale broadband access markets
Friday 20 August 2010 17:26:51 by John Hunt

Back in March, Ofcom published a consultation on their review of the wholesale broadband access (WBA) market. Since that time Orange signed an agreement with BT to supply wholesale broadband access which effectively reduces the number of large operators in the market from seven to six (BT, C&W, O2, Sky, TalkTalk and Virgin Media). Ofcom's original proposal to define the markets were as follows:

  • The Hull area: (0.7% of UK premises);
  • Market 1: exchanges where only BT is present (14.2% of premises);
  • Market 2: exchanges where two or three POs are present or forecast (13.8% of premises); and
  • Market 3: exchanges where four or more POs are present or forecast (71.3% of premises).

The changes to operators has repercussions on these definitions of the WBA markets which are used to determine if BT has significant market power (SMP) and this is used as a basis as to how BT sets wholesale prices for broadband. In addition, the European Commission questioned whether the geographic definition of markets based on number of operators was sufficient to identify differences in competition. As such, Ofcom is proposing new market definitions and these are based upon current confirmed roll-out plans from the relevant operators.

  • The Hull area: (0.7% of UK premises);
  • Market 1: exchanges where only BT is present (11.7% of premises);
  • Market 2: exchanges where two POs are present or forecast and exchanges where three POs are present or forecast but where BT’s share is greater than or equal to 50 per cent (10.0% of premises); and
  • Market 3: exchanges where four or more POs are present or forecast and exchanges where three POs are present or forecast but where BT’s share is less than 50 per cent (77.6% of premises).

The increase in premises within Market 3 means that BT is treated the same as any other operator in this area and so is free to set pricing at a level of choosing. This could mean reduced pricing for some broadband users, if their broadband operator uses BT wholesale services and if they offer price reductions if you are in a Market 3 area. The consultation is open until the 1st October and can be found here.

Comments

Posted by JNeuhoff over 6 years ago
When will Ofcom start doing some useful things and stop promoting the digital divide in the UK?
Posted by CARPETBURN over 6 years ago
Around the same time hell freezes over ;)
Posted by opticalgirl over 6 years ago
isn't "or forecast" just a bit vague and open to abuse?
Posted by c_j_ over 6 years ago
BTw have been offering geographic pricing for ages now. How many ISPs are actually passing on the discounts in a similar way? Do BT Retail? The only one I'm aware of is BT-owned Plusnet...

Didn't the Tories say, pre election, that one of their cuts was going to be the abolition of Ofcon? How will we survive without them?
Posted by Legolash2o over 6 years ago
Why do Ofcom/government over-complicate things? although if it makes broadband cheaper in Market 3 areas then it can only be good?
Posted by Legolash2o over 6 years ago
Im sure we could survive without Ofcom, they do nothing anyway except get in the way.
Posted by wirelesspacman over 6 years ago
If Ofcom went, something else would replace them - they might even simply hand it all over to Brussels! Now that is something that simply does not bear thinking about...
Posted by New_Londoner over 6 years ago
At least Ofcom are prepared to have a crack at Sky's pricing of TV, force it to wholesale sport to Virgni, BT etc.

Okay the current price levels need to be improved but its a good start. Its notable that the press (including that independent of News Inc) and many politicians seem to fight shy of taking on Sky et al, so if Ofcom went, who's be left?
Posted by CARPETBURN over 6 years ago
This is nothing to do with TV, and Ofcom need to keep their dumb noses out of that as well. If the BBC, BT, Virgin or anyone else want some of the content sky broadcast they can bid and pay for it just like sky do.
The BBC did it with F1, winning the rights back from ITV. The BBC, Virgin, BT or whoever can do it with other sports if they want to flog them to their users that bad.
Posted by otester over 6 years ago
^Amen to that!
Posted by Legolash2o over 6 years ago
http://www.prnewswire.com/news-releases/lantiq-samples-industrys-lowest-power-smallest-footprint-vdsl2-chipset-to-drive-broadband-innovation-101276219.html

Shame BT can't use those chipsets, supports both ADSL and VDSL. Which would mean people on ADSL sync at their full rate :P

Correct me if im wrong
Posted by Legolash2o over 6 years ago
i mean in the FTTC cabinets
Posted by Somerset over 6 years ago
Lego - why is it a shame? Who says they or their suppliers can't/won't? As they are only announced today it's a bit soon to moan.
Posted by Legolash2o over 6 years ago
im sure BT will have a contract with another supplier and im sure they have already chosen which chipset they are going to use and prob won't change in the middle of the rollout.
Posted by Legolash2o over 6 years ago
and who said i was moaning :)
Posted by Somerset over 6 years ago
Huawei provide the FTTC kit.
Posted by Legolash2o over 6 years ago
any specifics about the kit? :)
Posted by Somerset over 6 years ago
No, but see http://www.greenwoodscomms.com/news_events/case_studies/fttc-casestudy.htm

Posted by Legolash2o over 6 years ago
thanks for the link, although i was looking hardware specs, etc.. Good link though so thanks again :)
Posted by warweezil over 6 years ago
So OFCOM propose to allow Btw to continue to Rip off market 1 areas. Time this worthless quango was disbanded. we pay the highest costs for the lowest speeds and allowances, and BT are allowed to degrade our line performance targets to save on actually doing maintenance on them to keep them up to full potential.

In any other market you pay a lower rate for a poorer service - time this was applied to market 1.
Posted by New_Londoner over 6 years ago
@warweezil
You could also add that many market 1 areas are the least attractive (so least economic - costliest to serve) which means that you should be paying more for the same service as a market 2 or 3 area.
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