All Sections

TalkTalk vs BT fibre broadband price war goes to Ofcom

TalkTalk has turned its war of words over the cost of BT’s fibre broadband into a formal complaint that could see cheaper superfast connections for all ISPs.

Communications regulator Ofcom will now decide whether it needs to launch a full investigation into the prices BT Openreach charges for FTTC (fibre to the cabinet) broadband.

A win for TalkTalk could see Ofcom impose prices on Openreach lower than its current wholesale tariff, which might be passed on to consumers.

TalkTalk vs BT fibre broadband price war goes to Ofcom
Is BT overcharging ISPs for fibre? Ofcom will decide

Read more about the BT Broadband RolloutTalkTalk said: “We have long maintained that there needs to be tighter regulation in superfast broadband to ensure a level playing field and therefore deliver real benefits for consumers and businesses. 

“We are pleased that Ofcom is taking this matter seriously and have decided there are reasonable grounds to investigate BT’s wholesale fibre pricing.”  

There won’t be a quick resolution to the dispute which has been brewing for more than a year, with Ofcom unlikely to take this first step until Autumn 2013.

Given the timescale, it’s unlikely that the investigation will endanger BT’s £2.5 billion fibre rollout programme, which is due to be completed by 2015, or its co-funding of any BDUK projects.

BT said: “BT is disappointed that Ofcom has opened this case despite the lack of any evidence. 

“We are confident that there is no case to answer but it would be better if the industry’s and Ofcom’s focus was on investing in the future of the country rather than on spurious actions designed to hold up fibre in the UK.”

TalkTalk accuses BT of squeezing its competitors by setting the wholesale cost of FTTC too high, at the same time as undercutting them with its own BT Infinity service.

Recombu Digital understands that BT Retail actually pays a slightly higher wholesale price than other ISPs.

BT claims TalkTalk is simply protecting the heavy investment it has made in unbundling the copper local loop for up-to-20Mbps ADSL, which is being made redundant by FTTC.

Based on previous investigations, Ofcom will be onto a loser whatever it decides, and the case will be dragged through appeals in various courts, with only the lawyers getting fat. 

One thing we can guarantee is that those costs will be passed on to consumers, probably outweighing any long term benefit if TalkTalk wins.

Comments