Broadband News

Ofcom publishes more documents

Ofcom has released two documents that many have been waiting for.

  1. Wholesale price proposals for competitive broadband market
  2. Statement on Direction Setting the Margin between IPStream and ATM interconnection Prices

With all the issues surrounding the BT interpretation of the Margin Squeeze Test, the second document is going to be read very carefully by all industry players.

An initial read of the ATM Interconnect and IPStream document appears to suggest that Ofcom consider the new proposed BT IPStream prices are compliant with the MST (section S.8). This will not please a number of IPStream providers, in fact reading the document there would appear to be little discussion of the effect on what is the larger market at present, the document is mainly concerned about kick starting Datastream with ISH. Interestingly in section 1.17 BT suggests that the MST may force them to sell some products below cost, but in section 1.22 Ofcom tells BT that it is free to reduce the Datastream pricing or increase IPStream so long as the MST is met.

We can see this discussion going on for a long time between all the various parties, obviously Datastream providers and potential market entrants are looking for more margin, but there are also a vast army of smaller suppliers reliant on IPStream to reach the currently 3000+ enabled exchanges who do not have the resources to use Datastream. The result may be the rise of three or four large Datastream wholesale providers, though with the recent withdrawal by C&W/Bulldog from that arena, providers may be reluctant to go this route.

As seems to be usual with regulatory investigations by Ofcom, the actual end result for the companies and individuals using ADSL are given little regard. While the BT Group is far from been a friendly cuddly giant, it currently does provide a service that many can afford and is very widely available. To date the Datastream services have generally only been available to a subset of ADSL enabled exchanges, and are often of variable quality, if the reports on our forums are anything to go by.


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