Ofcom to get tougher with BT over superfast broadband

Play fair or else

Ofcom is preparing a set of tougher tests for BT's broadband division, as it looks to make sure the internet marketplace in the UK remains competitive.

As a result, BT may raise its prices or reduce the fees it charges rivals to share its superfast broadband network.

Ofcom already monitors the price BT charges to firms such as TalkTalk and Sky to use its network - a deal known as "virtual unbundled local access" or VULA. Around 3.4 million connections are currently sold on in this way.

Now Ofcom wants to put tighter controls on the gap BT can leave between the wholesale and retail charges levied to its rivals and its customers. Other firms must be able "to compete and make a profit" in the words of the regulator.

Testing times

"We're not opposed to the principle of a test," said a BT spokesman. "Ofcom has said our current prices will also pass this new test when it comes into force.

"However, we do not think our sports costs should be part of any assessment and we reject the notion that Sky and TalkTalk require further regulatory assistance."

BT Sports - which is offered for free to BT's broadband customers - and the company's mooted takeover of EE are also going to be factored in to Ofcom's calculations. If BT's margins are squeezed by Ofcom then it may not be so keen to bid high for sporting rights in the future.

Ofcom's proposals must now go before the European Commission for approval. If accepted, they will come into force in March and continue until March 2017.

Via BBC