Broadband delays will cost you £140m

Tuesday, 6 June, 2017

Vodafone, TalkTalk and Sky have all complained over Ofcom’s decision to delay the introduction of proposed wholesale price reductions on BT’s Openreach.

This, they claim, could cost consumers £140 million.

At the beginning of the year, Ofcom called for the wholesale cost charged by Openreach to ISPs to install superfast broadband should be cut from £88 to £57.77.

But Ofcom decided to hold off on the decision until they could examine the findings of a review into the telecoms sector.

Openreach legally split off from BT in a landmark move earlier this year.

A spokesperson for Openreach said: “Ofcom is consulting on the new price control that should apply to our Mbps
product and the various responses show there’s no consensus yet on what the appropriate price should be.”

Openreach said they are holding prices at 2016 levels “to avoid uncertainty”.

But ISPs say this will just heap more misery costs onto their customers.

A spokesperson for Vodafone said: “We estimate that as a result of the 12-month delay in implementing this initial charge control and the subsequent delay in further reductions, UK consumers are being overcharged by around £140 million.

TalkTalk agreed with Vodafone’s statement and Sky said the cost of supplying superfast broadband to their customers would be, ‘higher than necessary’. The company warned: “Competition will be further distorted and consumers harmed.”

Responding to the criticism Openreach said: “We believe the current price is fair and reasonable, which is our regulatory obligation and we’ll respond to Ofcom’s consultation and give our view on the future.

“They of course argue prices should come down, and Ofcom needs to consider the evidence and reach an independent decision. That consultation is ongoing so it would be wrong for them to pre-empt the outcome now.”

Last year BT lost a court case brought against Ofcom over broadband prices when they introduced price controls that limited the amount BT could charge rivals to access its superfast broadband network.

At the time Ofcom forced BT to keep a gap between its wholesale prices and the costs of its bundled broadband, phone and TV packages, so that rival companies could offer more competitive prices.

Tim Bamford author picture


Tim is a veteran freelance journalist writing extensively on internet news and cybersecurity.