Ofcom consults further on LLU and WLR charge controls
The price changes that Ofcom makes to services like shared (SMPF) or fully unbundled (MPF) broadband services and wholesale line rental (WLR) are often small, but it can affect further investment by providers in services, as well as affecting the consumers bills. A lengthy consultation document was published in March 2011, and now a further consultation period is to run seeking further feedback on Ofcom plans.
One reason for the further consultation was to reassess the Significant Market Power (SMP) determination which states that BT holds SMP in the UK (apart from the Hull area). The 112 pages consider the changing market, and the emergence of fibre based connections and possible influence from BDUK funded projects. The end result is that at present BT still retains its SMP, the situation will be reassessed in the future, since BDUK projects may create an alternate local loop network.
Two areas of interest for broadband consumers are:
- A re-consult on the Ofcom proposal to align the migration processes between MPF and SMPF products, in terms of pricing. Particularly with regard to the higher costs of providers who use WLR combined with SMPF to provide a voice and broadband service. Current pricing means WLR+SMPF is around twice the cost to connect up compared to a full LLU service.
- Re-consult on the Ofcom proposal to set cease charges to zero, with the cost of the work being recovered in rental charges. So rather than the current Openreach charge of £5.22, it would be part of all SMPF/MPF line rentals, running to £0.51 (MPF) and £0.28 (SMPF) per year.
The cease charges are not levied very often by the retail providers, generally getting lost in various termination charges or where a customer has stayed beyond any minimum contract period simply absorbed. When they are charged it can make for an unpleasant surprise, if someone has worked out the cost of a migration down to the penny.
For the average consumer a bigger impact is the shuffling around of charges for things like paper bills and not paying by Direct Debit. BT Retail is raising the price of its basic line rental by 70p for those getting a paper bill now, and £1.95 for those that take paperless billing, which effectively removes that discount (changes in effect from 3rd December 2011). Also BT Retail broadband and calls bundles will rise in price by 70p to £1.40 per month. Sky customers also need to pay heed to mailings, which indicate a £1 price rise in January 2012 if they don't elect for paperless billing.