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Cost of switching superfast broadband provider could drop by 80 per cent

The price of superfast fibre broadband could drop and switching providers could get easier if Ofcom wins support of new suggestions.

The communications regulator wants BT Openreach to cut the cost for ISPs of taking on someone else’s customers if they want to switch providers.

It currently costs £50 to move a superfast FTTC (fibre-to-the-cabinet) connection, but Ofcom wants this to be £10-£15.

Cost of switching superfast broadband provider could drop by 80 per cent
Superfast broadband: coming to a cabinet near you

Read more about Fibre Broadband and the BT Broadband RolloutOfcom’s also suggested capping the wholesale cost of FTTC connections so it’s low enough for other ISPs to profitably match BT Retail’s prices, but not enough to undercut BT Retail at a profit.

New superfast broadband customers would also arrive at an ISP with a one-month minimum contract to Openreach, instead of the 12-months Openreach insists on today.

Ofcom’s Fixed Access Market Review said: “There remains uncertainty about future demand for NGA services [Next Generation Access, BT-speak for superfast broadband and beyond] and the profile by which NGA investment should be recovered. 

“Determining the level of charges remains difficult and carries a risk of setting inappropriate price levels that would particularly harm incentives for efficient investment (either expanding the network or improving technology) and BT’s ability to experiment with pricing to encourage fibre take up.”

The proposals go some way to satisfy TalkTalk, which claims BT is setting the price of superfast fibre too high to discourage competition

Ofcom’s latest consultation focuses on the cost and supply of BT’s network through its Openreach subsidiary, which connects customer to their local telephone exchange for services like broadband, phone, and ISDN.

Today’s typical ADSL broadband is mostly provided through Local Loop Unbundling, where ISPs put their own equipment in an exchange and take control of the connection to the customer’s home.

BT’s superfast fibre broadband can’t be physically unbundled, but Openreach sells it to ISPs as Virtual Unbundled Local Access (VULA), as though it was.

The consultation will run until September 25, 2013 – for more details go to: Fixed access market reviews: wholesale local access, wholesale fixed analogue exchange lines, ISDN2 and ISDN30.

 

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