CMA rejects BT, TalkTalk appeals related to Ofcom’s wholesale broadband price rules

21 Jun 2016

Appeals by both British fixed line incumbent BT and alternative operator TalkTalk against an Ofcom ruling relating to wholesale broadband prices have been rejected by the Competition and Markets Authority (CMA), according to The Telegraph.

BT launched a challenge in May 2015 against a regulatory ruling which introduced price controls that limit the amount it can charge rivals to access its superfast broadband network, with the decision applying to its fibre-to-the-cabinet (FTTC) infrastructure. While the telco accepted that there should be some sort of price control, it had claimed that Ofcom’s calculations were ‘manifestly inadequate’, further arguing that the regulator was ‘undermining its own attempts to promote competition’ by introducing barriers for it to expand in pay-TV markets. Meanwhile, TalkTalk had launched its own appeal against Ofcom’s workings-out, claiming that it should not have included landline call costs, because BT customers are more likely to use a landline than TalkTalk customers, meaning the comparison was unfair.

Now, with the Competition Appeals Tribunal (CAT) having referred both challenges to the CMA, the latter body has ruled that Ofcom’s ‘margin squeeze’ was fair, having made its own calculations. Despite this, BT was reported to have said that it was pleased with the decision, as one minor change was made; while under the initial ruling price caps were to be revised every month, such revisions will now take place every six months instead.