BT responds to Ofcom’s price proposals for BT Wholesale lines

BT’s not very happy with Ofcom’s recent proposals to cap prices of its BT Wholesale lines over the next three years.

Yesterday the telecoms regulator proposed to introduce price caps which would tether prices of BT lease lines to the rate of inflation.

“Ofcom have published their proposals for the leased lines charge control as part of its regular triennial review of the market. While we note Ofcom’s recognition of the costs and declining volumes across Partial Private Circuit products, we have some concerns about the proposals for wholesale Ethernet services pricing outside the London area.”

For so-called ‘Traditional Interface’ lines – BT’s older low, medium and high bandwidth lines and trunk services, Ofcom is proposing that BT can’t price these above 6.5 per cent of the current inflation rate.

For newer high-speed connections (referred to above as ‘Ethernet’) including 1Gbps fibre optic broadband lines, Ofcom proposed that BT has to price these below inflation, at minus 8 per cent at the very least.

Though this won’t directly have a knock on effect to most residential broadband consumers, your business or your boss could stand to save a bit of cash if your trunk services are supported by fibre optic lines. On the other side of the coin, this could see your boss having to pay a bit more – so perhaps keep an eye on this story and time your request for a pay rise accordingly.

Outside of London, where there’s deemed to be enough competition to warrant not regulating BT prices, Ofcom wants to make sure that the playing field is levelled for the non-London based competition.

Ofcom’s regulation proposals also don’t apply to the areas of Hull where KC (Kingston Communications) is the incumbent telco.

BT is however concerned that, given the rate of inflation is hard to predict over a three year period, Ofcom’s plans won’t give the company a fair return on its services.

“We will engage with Ofcom to make our views clear. We believe regulation should allow a fair return on leased lines products in order to ensure sustainable investment in the future of the UK’s telecoms infrastructure.”

BT has until the 30th of August to respond to the proposals and work out with Ofcom a pricing structure that’s agreeable to all parties.