Charges for LLU and WLR services from 1 April 2011

Published: 1st December 2010

Charges for LLU and WLR services from 1 April 2011

The current charge controls for local loop unbundling (LLU) and wholesale line rental (WLR) services expire on 31 March 2011. While Ofcom is currently reviewing these controls, this review is not scheduled to complete until after the expiry of the current controls. We would ordinarily expect to complete charge control reviews before expiry of the controls under review. However, in this case, this is not possible, primarily as a result of the appeals of the current controls which were finally determined in October 2010.

In recognition of the above, Openreach has written to Ofcom offering a voluntary commitment to abide by the charge ceilings for LLU and WLR services listed in the table below from 1 April 2011 until the start of new controls (or 31 March 2012 if new controls are not in place by that date).

These charge ceilings were calculated using the financial modelling set out in our statement A new pricing framework for Openreach of 22 May 2009 (which forecasts costs to 2013/14) with the outputs of the model adjusted to reflect the conclusions of the Competition Commission in their Determinations on the appeals of the current controls.

Ofcom consider that basing prices in advance of Ofcom imposing new controls on such modelling adjusted to reflect the Competition Commissions Determinations is a reasonable approach to take. Ofcom has confirmed that Openreachs offer is consistent with this methodology. We have therefore written to Openreach to indicate that, on the basis of its commitment, Ofcom currently does not intend to impose a charge control to apply to LLU and WLR services for the interim period from 1 April 2011 until the point at which we conclude our LLU and WLR charge control review.