Ofcom has issued an update to its original proposed price controls for 2014 to 2017, this is after they found some errors in how the charges were calculated.
"Ofcom has today issued a revised version of its consultation on the Fixed access market reviews: Approach to setting LLU (local loop unbundling) and WLR (wholesale line rental) charge controls which was published on 11 July 2013.
The revisions correct errors identified in the calculation of non-pay operating costs in the Cost Model and make an adjustment to the ranges for SMPF rentals, MPF rentals and WLR rentals to reflect the sensitivity for broadband line testing which was not reflected in the published ranges.
The correction of these errors has resulted in changes to the Base Case ‘X’ and the ‘X’ ranges included in the original consultation as explained further below.Correction: Fixed access market reviews: Approach to setting LLU and WLR charge controls
We have updated our original item retaining the incorrect prices, so people can easily see what difference the corrections make. The one change that pops out, is that full LLU rental may increase by 11 pence per month in 2014/2015, bucking the trend of the last few years for it to go down at wholesale level.
Usually when Ofcom announce price controls the press has a frenzy of cheaper telephone services and broadband coverage, but the general trend has been for 50p to £1 rises in basic voice line rental over the years. If you go back three years to July 2010, we were covering the price rises from BT Retail when telephone line rental was available for £12.04 per month. Looking at the total bundle price is interesting as the basic 10GB broadband service was £15.99 a month (total £28.03) and in 2013 we are looking at £15.45 (telephone) + £13 (broadband) a total of £28.45 for the same 10GB allowance. (We have ignored the various reduced price and voucher promotions in this comparison e.g. the basic 10GB product is £10/month for the first 12 months).