British telecoms regulator Ofcom has opened an investigation into BT’s compliance with price regulations related to Excess Construction Charges (ECCs). ECCs are charges levied by BT to recover the costs of customer-specific network construction that is required to extend the telco’s existing infrastructure out to where a customer requires a new connection. Since 16 May 2014 BT has been subject to an obligation to exempt certain new provisions of business connectivity services from the first GBP2,800 (USD3,495) of excess construction costs (i.e. the ECC exemption). BT is then allowed to make up the resulting loss of revenue with a balancing charge which is part of the standard connection charge for all relevant business connectivity services.
Now though, Ofcom says it has been provided with information by BT indicating that the telco may not have correctly applied the ECC exemption to a number of relevant business connectivity orders since the beginning of the exemption regime. As such, the regulator said it had opted to open an investigation to ‘examine whether there are reasonable grounds to believe that BT has failed to comply with its obligations’ under a number of specific significant market power (SMP) conditions.