Home / News / Peripheral News / Ofcom Proposes Broadband Price Reductions

Ofcom Proposes Broadband Price Reductions

David Gilbert

by

Ofcom Proposes Broadband Price Reductions

Ofcom has announced that it will be recommending a price reduction which could lead to as much as a ten percent price reduction in home telephone and broadband costs for some users.

The proposed cuts come as a result of Ofcom revising the rates that Openreach, which manages BT’s network, should charge other providers such as TalkTalk and Sky who rent BT lines and exchanges. While it will be good news for some customers, Virgin customers won’t see a cut in prices as it uses its own network to provide telephone and broadband. Ofcom has announced that there will be two ways by which the cost reductions will be passed on to the customer. The first is called Local Loop Unbundling, and allows BT's competitors to place their own equipment in local BT exchanges.

Ofcom is proposed that Openreach reduce prices when an operator takes over the lines completely by between 1.2 and 4.2 percent every year. Where lines are shared it wants prices to drop by between 11.6 and 14.6 percent every year. The second area where it is recommending price reduction is Wholesale Line Rental, which involves telecoms firms simply renting lines from Openreach. Ofcom wants the prices of these to drop by between 3.1 and 6.1 percent every year.

In a statement the regulator said: "Ofcom expects its proposed prices to lead to real term price reductions for consumers, as communications providers pass on savings to their landline and broadband customers." Responding to the proposals, BT said: “BT invests more than any other company in the UK's communications infrastructure, so it is critical that it is able to achieve a fair rate of return in order to continue its investment in copper and fibre-based services."

The consultation phase of the process will now continue until June 9 with results being published this autumn. Should the recommendations go ahead customers could see price reductions as soon as the end of the year.

Source: Ofcom and BBC

chessnuts

April 1, 2011, 12:08 am

And what will be the unintended consequences of this new regulation? Have they thought about that? I doubt it even crossed their mind.

Martin Leventon

April 1, 2011, 1:01 am

It would be interesting to see if the savings were actually passed onto us consumers, I for some reason highly doubt it.

xenos

April 1, 2011, 3:28 am

BT Wholesale is still way too expensive, my area STILL!!! has no LLU so were stuck with £35 a month subscriptions for an 8 meg service that's not throttled to hell (IDNET), and we're still stuck with miserable download limits compared to the unlimited packages BE offer virtually anywhere with LLU. Sad face.

Enigma

April 1, 2011, 6:04 am

ANOTHER Ofcon!!

>> Ofcom isn't time we paid £5/month fixed line rental?
>> Ofcom isn't time you did something about premium rate charge for 0845 by Virgin Media.
>> Ofcom isn't time you did something about the Virgin Media's BOOK of 100s of different charges for telephone numbers beginning with........

>> Ofcom isn't time you did something about the extortionate charges for mobile telephony.

Instead of this phoney effort to give the Tax Payers and the Customers that you are doing something!!!

Simon

April 1, 2011, 2:21 pm

@Enigma "Ofcom isn't time we paid £5/month fixed line rental?" Great idea.

Stelph

April 1, 2011, 2:58 pm

But im not too bothered about paying less, what I want is for highspeed broadband to be available where I live! Currently I can get about 1-2mb max, rather than force prices down Ofcom, force BT to provide proper broadband everywhere

Enigma

April 2, 2011, 1:15 am

@Simon, I would at least like to know HOW the telcos arrive at their line rentals? Thus I am probably being generous when it probably should be £1/month! Why am I being charged "call connection charge" by Virgin Media when I am paying a ruddy Line rental?

Indeed, the least Ofcom should be doing at ALL TIMES is keeping a very keen eye on the structure and source(s) of the charges.

In the case of Consumer products we have seen a MASSIVE drop in the price while a MASSIVE increase in specs and quality. We don't see such trend in the telcoms industry. Instead they find ever more ingenious and/or devious ways to rip off the Customer for selling it the OLD ROPE.

If you look at the record of Ofcom it acts largely in favour of the telcoms industry and ONLY acts for the Customer when there is a MASSIVE public outcry or campaign by some Consumer organisation(s).

The Broad Band charge presumably is for the Customer Service/Technical Support (on the blue moon occasion one rings them about a fault), Server/local exchange, fibre cable and profit margin.

I haven't seen VM laying new cables for their higher speed BB. Presumably they give me less than half what I am supposed to get while upping someone else's? Oh sorry it is "upto" what I am supposed to get!!! I seriously question theirs and Ofcom's parentage.

Here's a Times article @ http://www.timesonline.co.uk/t...

"The stealth charges that double broadband bills: Internet firms are pushing up the cost of their services with extra payments hidden in the terms and conditions"

for when my Scottish 'pal' @simonm turns up!!!

TR should send a Journo to question Ofcom's CEO about the above sort of issues of it's readers.

comments powered by Disqus