Ofcom consults on regulation of Ethernet and leased line services
The leased line market which is worth some £2bn per annum across all providers, while not of immediate interest to the average consumer, does influence the amount of capacity available through cell-towers and backhaul for LLU providers. Ofcom has launched a consultation which runs until 24th August to which interested parties can respond, though be ready for a long read, as the consultation runs to several hundred pages. The full conclusions will be published in 2013, but Ofcom will outline proposed pricing that BT can charge in the coming weeks.
London was already seen as a competitive place for leased line services, and the amount of competition is such that Ofcom is proposing extending the area of London where it believes BT does not have significant market power out towards Heathrow. The consultation is looking at allowing BT more freedom in setting prices in the London area, where competition is high.
Two main speeds of service are considered, for services that run at up to 1 Gbps by and large existing regulation is likely to remain, plus a requirement for BT to provide access on a strict non-discriminatory basis. For services faster than 1 Gbps, where outside of London and Hull BT has significant market power, Ofcom is proposing regulation to ensure BT does not abuse its dominant position.
While this review must be welcomed, it would have been much better happening in 2010, so that the various BDUK/Local Authority projects would have a clearer idea of what state the backhaul market was in. Lower backhaul costs might have encouraged more players to bid for the BDUK projects, or even more radically in some areas encouraged commercial players to roll-out fixed wireless services offering superfast broadband.