Ofcom chief expects to regulate BT duct and pole rates

Wednesday, May 4th 2011
The body's chief executive is anticipating having to step in to regulate BT's infrastructure access prices.
Ofcom chief expects to regulate BT duct and pole rates
Ofcom chief executive Ed Richards has said he expects the body to have to regulate the amount BT charges its rivals for access to its ducts and poles.

Speaking at a Department of Culture, Media and Sport committee meeting, Mr Richards explained the watchdog will step in and put price limits in place if necessary in order to help rival internet service providers (ISPs) compete with BT.

A consortium of major ISPs and network operators - including Fujitsu, TalkTalk and Virgin Media - last month threatened to boycott the government's rural broadband pilot schemes if steps to control BT's pricing structure were not taken.

The group warned the proposed rates, terms and conditions for utilising BT's infrastructure make it "unviable" to compete with the telecoms giant. It would be more cost effective to duplicate BT's network than pay to use the existing infrastructure, the companies argued.

Mr Richards has now waded into the debate, stating that while it would be "much better" if the parties involved in negotiations can reach a satisfactory market rate, it currently looks "unlikely" this will be achieved.

"If after that there is no agreement and there is a dispute brought to us, we will end up setting a price," he said. "[But] we have to let the commercial negotiation process conclude first.

"We'll know quite quickly if we have to regulate or not."

However, BT hit back by claiming there is no need for Ofcom to step in at this point.

In a statement, the company insisted it is "extremely early" to speculate about the regulator's involvement, pointing out trials of duct and pole access only commenced last week.

Existing analysis from BT has found the draft pricing structure it has created compares favourably with the rates charged in other European markets.

"It is our hope that we can reach agreement with industry on this issue," the company added. 

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