Agreement between BT and Ofcom paves new path for regulation
BT and Ofcom have today agreed on new regulation policies that should bring more equality of access to the wholesale market. Six objectives have been set out that should encourage competition,
increase the services offered, and lower the cost to the consumer.
- to drive down the price of calls, connections and services for consumers and businesses;
- to support more innovation through the growth of competitive products and services, such as faster broadband, television and voice over the internet and video-on-demand, from a range of credible companies;
- to provide regulatory certainty for providers and investors so that they commit to developing, marketing and extending these products and services for UK consumers and businesses;
- to re-focus regulation where it is truly needed, with swifter remedies to tackle anti-competitive behaviour and a structure which delivers equivalence to a timetable with real penalties and incentives;
- to remove regulation wherever competition is effective and the effect of open markets - rather than regulatory intervention - ensures the delivery of choice, value and quality for consumers;
- ensure the necessary level of consumer protection through a combination of codes, sanctions and effective consumer information.
The actions being taken by BT involves the creation of a new and "operationally separate" business unit based around the provision of Access Services, staffed by around 30,000 current BT employees who are responsible for the operation and development of the current local access networks.
The new company will be required to offer the same products to all customers (including BT Retail) at the same price and using the same day-to-day processes for ordering and maintenance etc. This is being referred to as "Equivalence of Input".
Following this, LLU pricing has been announced as getting a 24% cut from £105 rental to £80 per year for a fully unbundled line, with effect from August, and confirming that IPStream and DataStream rental prices will not fall until 1.5 million unbundled lines are installed. A £10 reduction in the connection charge to IPStream and DataStream has, however, been announced to take effect from September.
More information can be found within the Ofcom documents, available here and here.