Proposals for WBA charge control

Summary

Introduction

1.1 Broadband is increasingly central to the lives of UK consumers and the success of businesses. It allows consumers to access and interact with a wide range of content and services and allows businesses to exploit new market opportunities and more efficient operating models. Competition has driven the success of the current generation of broadband services. The result has been greater choice, innovation, lower prices and high levels of broadband adoption.

1.2 Competition in the provision of these retail services depends on effective competition at the wholesale level, or, where this is not occurring, effective regulation. The Wholesale Broadband Access (WBA) market sits between the Wholesale Local Access (WLA) market and the retail broadband market ^(-1-) . The WBA market relates to the wholesale broadband products that communications providers (CPs) provide for themselves and sell to each other. It is important for consumers because these services are one of the building blocks of the retail broadband offers that consumers buy.

1.3 In our review of the WBA market ("the 2010 WBA Statement") ^(-2-) we found there is effective competition in areas covering almost 80% of the UK premises. However, in just over one-fifth of the UK what we call Market 1 and Market 2 we concluded there is not sufficient competition and so we have imposed regulation to protect consumers.

1.4 The aim of these regulations is to enable CPs to purchase wholesale products from the dominant providers at prices that allow them to compete effectively in the provision of retail services. In Market 1 made up of exchange areas in which BT is currently the only provider of wholesale broadband services we have decided that BT ^(-3-) should also be subject to a charge control. This consultation document explains Ofcoms proposals for the WBA charge control in Market 1.

Footnotes:

  1.- The WLA market concerns access to the connection between the consumer and the telecommunications network. As such it is critical for all fixed line services. We published our conclusions on our review of the WLA market on 7 October 2010. http://stakeholders.ofcom.org.uk/binaries/consultations/wla/statement/WLA_statement.pdf

  2.-http://stakeholders.ofcom.org.uk/binaries/consultations/wba/statement/wbastatement.pdf

  3.- Our decision on the WBA charge control is addressed to BT plc. as a whole. It should be noted that however that the charge controlled product is supplied by BT Wholesale ("BTW").