Get ready for another round of the UK's broadband battles, as industry regulator Ofcom’s consultation into how much BT can charge its rivals for leasing its broadband lines closes tomorrow.
After a month-long consultation, part of its Business Connectivity Market Review, Ofcom’s review into BT’s cost attribution methodologies closes tomorrow, leaving the watchdog with a choice on whether to reduce the prices that BT can charge its competitors for using its broadband network.
As former state monopoly, BT is subject to regulatory financial reporting obligations imposed by Ofcom.
BT’s rivals Sky, TalkTalk and Vodafone have been vociferously arguing for Openreach to be split off from BT for some time now and a TalkTalk spokesperson said to City A.M. that the Ofcom review into the BT’s cost attribution only strengthened this case:
Businesses are paying dearly for BT's cost inflation and regulatory gaming. This is disappointing but hardly surprising given BT's track record over the last ten years.
This just strengthens the case for structural separation of Openreach, which would remove the ability to inflate the costs and make the entire regulatory accounting process far more transparent.
Vodafone chief Vittorio Colao recently accused BT of trying to “re-monopolise” the sector, and was immediately backed by Sky and TalkTalk – although their rival furiously refuted the claims.
Ofcom has launched a probe into the market, and is due to deliver its verdict on whether or not Openreach should be carved out from BT by January.