Ofcom rounds on BT Broadband

17 Dec 2003

The UK’s new super-regulator for the communications industry, Ofcom, yesterday accused the country’s dominant telco BT of abusing its near monopoly position in the broadband internet access market. In its 220-page report into the country’s wholesale broadband market Ofcom concluded that, as a significant market power, BT should reduce the wholesale tariffs it charges other telecoms operators for using its local network to gain access to customer premises. The ruling mirrors a similar report conducted last year by Ofcom’s predecessor, Oftel, which demanded that BT introduce a new product called Datastream to allow its rivals to offer wholesale broadband services to their ISP customers on a more cost-efficient basis. However, the uptake of Datastream has been below the regulator’s expectations due to a series of technical glitches encountered by BT’s competitors in connecting with BT’s local exchanges. Companies such as Thus and Cable & Wireless have also complained that the tariffs BT is charging for Datastream are still too high and are undermining the viability of their own business models in the broadband sphere. Consequently, Ofcom has said that it will introduce a new pricing regime in the New Year which will see BT forced to offer Datastream at a price below that which it charges ISP’s for its own wholesale broadband service, known as IPStream.