Ofcom yesterday warned BT that it might be forced to raise broadband prices for customers or slash what it charges rivals to use its network, under tough new tests.
The proposal is designed to ensure that BT cannot price rivals such as Sky and TalkTalk out of the market.
Under current rules, BT allows rivals to use its network to sell superfast broadband to consumers. In order to allow rivals to make reasonable profits, there needs to be a sufficient gap between what BT charges to use its network and the retail price at which BT sells its broadband. The regulator decided that regular tests are required “to ensure that other communication providers have sufficient margin to be able to compete with BT”.
TalkTalk welcomed the decision, saying: “Robust regulation creates a more competitive market.”
BT, however, said the proposals were “misconceived… We’re not opposed to the principle of a test. Ofcom has said our current prices will also pass this new test when it comes into force.”