The Guernsey Competition and Regulatory Authority (GCRA) has launched a consultation on price control for wholesale on-island leased lines and is seeking comments on the matter by a deadline of 11 February 2022.
In publishing its consultation paper, the GCRA said that it was of the opinion that the prices for ‘very-high bandwidth’ (‘VHB’) retail leased lines – i.e. those offering speeds of 1Gbps and above – were ‘significantly higher than comparable jurisdictions and are excessive’. Further, the regulator suggested that wholesale prices charged by Sure – which it said is dominant in the wholesale market – exhibited a similar pattern.
According to the GCRA, with the financial services sector being a significant user of VHB leased lines, excessive retail prices have the potential to reduce the Bailiwick’s ability to compete in this key economic sector with major offshore competitors, such as Jersey and the Isle of Man. Meanwhile, the regulator has also suggested that excessive wholesale pricing of VHB leased lines also impacts the provision of cost-effective backhaul solutions for current generation mobile network operators, while arguing it could constrain the future cost-effective rollout of 5G infrastructure.
With the non-statutory consultation paper setting out the GCRA’s preliminary views on an alternative pricing approach for Sure’s on-island wholesale leased lines, it said this would replace the retail-minus mechanism for VHB products with a benchmarked price cap that would ‘reduce wholesale prices substantially’.