UK: BT loses battle with Ofcom over broadband prices

BT has lost a court showdown with Ofcom over broadband prices, one year after launching an appeal against the watchdog’s restrictions on the wholesale price of superfast broadband.

BT appealed to the Competition Appeals Tribunal last May when Ofcom introduced a “margin squeeze” test – price controls that limit the amount BT can charge rivals to access its superfast broadband network.

The decision applied to BT Openreach’s “fibre-to-the-cabinet” network, which provides superfast speeds of around 24 megabits per second. Nearly six million households are connected to the network, whether they buy broadband from BT, or a competitor such as Sky or TalkTalk.

Ofcom forced BT to keep a gap between its wholesale prices and the costs of its bundled broadband, phone and TV packages, so that rival companies can offer competitive prices while turning a profit.

BT accepted that there should be some sort of price control, as it owns Britain’s biggest broadband infrastructure, but also competes with operators that use its network when it comes to selling these services.

However it claimed that Ofcom’s calculations were “manifestly inadequate”, saying it hurt its plans to challenge Sky in the pay-TV market, where it is battling with its rival over sports rights.

BT and TalkTalk have until July 5 to launch an appeal.

Full Content: Telegraph

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