British telecoms regulator Ofcom has launched a consultation following its publication of a review of the wholesale broadband access market. The watchdog’s review sets out its initial assessment of competition within the UK’s wholesale broadband access (WBA) markets, as well as making a number of provisional conclusions and outlining proposed new regulation. With regards to market definitions, Ofcom said had determined that services provided via copper, cable and fibre access networks should be classified as being in the same market segment, but it considers broadband connectivity via mobile, wireless and satellite networks to be outside the relevant market. Meanwhile, Ofcom believes it is now appropriate to consider superfast services provided over fibre when producing its geographic market analysis, noting that, taking account of competition delivered over copper, cable and fibre-access, networks, the size of the geographic areas where consumers have ‘limited choice’ of broadband provider has reduced significantly – to around 2% of UK premises.
In terms of competition in the relevant market, Ofcom has said that fixed line incumbent BT holds significant market power (SMP) in the provision of WBA services in ‘Market A’, which accounts for around 2% of UK premises. However, it claims no operators holds SMP in the provision of WBA services for ‘Market B’, which incorporates 97.3% of premises. The remaining 0.7% of UK homes and business are in the ‘Hull Area’ and Ofcom has launched a separate consultation on proposals for wholesale broadband regulation in this market.
Ofcom has proposed several measures to protect existing competition in Market A, though it has notably confirmed it does not intend to put a charge control in place on any of the WBA services. It said it would not do so on the basis that this could lead to excessive retail prices in Market A ‘as a result of indirect constraints from BT’s retail national pricing and the level of competition in the rest of the country’. Among the proposed elements of regulation that would apply to BT, meanwhile, Ofcom has said there should be: a requirement to provide network access on reasonable request and on fair and reasonable terms, conditions and charges; a prohibition against discriminating unduly in the supply of services; and a requirement to publish a reference offer.
With regards to the Hull area, Ofcom has defined this as a separate geographic market for the provision of both WBA and wholesale local access (WLA) services. Its analysis of these markets has led it provisionally to conclude that KCOM has SMP in both markets in the Hull area, on the back of which it has proposed several general remedies.
Ofcom is now seeking feedback from interested parties on its proposals, and has set a deadline of 14 September 2017 for submissions to both consultations. Looking ahead, it has said it aims to publish its final conclusions regarding the matters in March 2018, with these then expected to take effect from 1 April 2018.