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BT could lower wholesale broadband prices by Ofcom

BT could be forced by telecoms regulator Ofcom to lower the prices it charges other IPS to make use of its Openreach network. 

In a nutshell this means that ISPs like Sky, TalkTalk and EE could benefit from lower prices and in theory they could pass savings on to customers. 

Ofcom’s proposed plans would see BT have to reduce prices by a small amount for three years from April 2014 to March 2017. 

BT could lower wholesale broadband prices by Ofcom
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Note that any reduction in price would also benefit BT Retail, which is treated on a fair and equal basis by Openreach, as well. 

As well as this, under separate proposals BT would have to lower prices in rural areas where BT is the dominant provider in order to encourage competition. Ofcom’s figures say that BT is the main provider of broadband and phone in over 11 per cent of areas that are predominantly rural. 

Where BT has been handed the keys to the Broadband Delivery for the UK (BDUK) contracts the dominance of the countryside is likely to continue. By the same token, the availability of faster services in rural areas, typically poorly served by ISPs could galvanise competition without the need for intervention. BT is fond of touting that over 80 ISPs sell services on the FTTC (Fibre to the Cabinet)-based portion of the Openreach network. 

BT spokespeople wouldn’t say anything more about the consultation other than the following: 

“These proposals are complex and we will review them in depth. There are a number of areas where we believe Ofcom have not fully recognised the costs of providing services.” 

Industry bods have until September 25 to give Ofcom feedback on these proposals. 

Image credit: Flickr user Stewart Black

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