Ofcom mulls future of UK wholesale broadband

The Comms regulator has published new proposals on the future of wholesale broadband.

Regulatory obligations would be removed in those areas of the country where competition is good.  Ofcom says the retail broadband market is performing well and gives consumers choice.  More than 80% can choose between two or more wholesale providers, whilst 65% can choose from 4 or more.  Some areas offer consumers the choice of around 8 providers.

Ofcom proposes to maintain consumer protection in those parts of the UK where wholesale broadband provision is still weak.

Ofcom previously classified the UK into 4 distinct market areas, according to the level of competition.  These are:

• The Hull area.  Kingston Communications (KCOM) is the only operator (0.7 percent of UK premises).
• Market 1.  BT is the only operator (19.2% of UK premises).
• Market 2. There is a choice of 2 or 3 wholesale operators (15.7% of UK premises).
• Market 3.  There is a choice of 4 or more wholesale operators (64.4% of UK premises).

Ofcom believes the Hull area, and markets 1 and 2 need further competition.  KCOM dominates the Hull market and BT enjoys a similar position in markets 1 and 2.  Existing rules for consumer protection will be kept in those areas.

The rules will require KCOM and BT to open up their networks in these areas on a fair and equivalent basis and provide adequate wholesale products on which retail services can be built.

Ofcom also proposes to remove current regulation imposed on BT in Market 3, effectively meaning BT does not have to provide wholesale broadband access in those areas.  Ofcom thinks that consumers have enough protection in this market as they can choose between 4 or more providers.

The consultation closes on 7th February 2008.