Ofcom introduces new regulation on BT broadband pricing

UK media and telecom regulator Ofcom will, from April 1, oblige BT to maintain a sufficient margin between its wholesale and retail superfast broadband charges, in order to allow other providers profitably to match its prices. 

According to Ofcom, BT will continue to be able to set its wholesale fibre prices, but not at a level that could prevent other operators from competing profitably for superfast broadband customers.

The regulator said that its indicative assessment of BT’s virtual unbundled local access pricing showed that BT is currently maintaining a sufficient margin between wholesale and fibre prices. However, the new rule has been introduced as a safeguard, limiting the telco’s ability to squeeze retail margins in the future.

Ofcom said that the new pricing rule took into account the costs and revenues of BT’s sport channels, offered free to high-speed broadband customers, as well as other elements included by BT in its retail superfast broadband bundles. The regulator’s move follows an intervention by the European Commission, leading it to clarify how it will take account of changes to how BT distributes and charges for sport content, such as Champions League football, when assessing BT’s compliance with its rule.