UK regulator moves to block BT Openreach broadband offer
Ofcom Proposes Intervention in Broadband Market
LONDON, July 28 (Reuters) - British regulator Ofcom proposed blocking a new commercial offer from BT's wholesale network arm Openreach to protect broadband competition, marking its first move to stop such a deal from the dominant provider.
Details of the Proposed Block
Ofcom said the offer was aimed at customers who were key to the ability of alternative networks providers, such as CityFibre and Hyperoptic, to grow their customer bases.
Reasoning Behind Ofcom's Decision
"We propose to intervene to direct Openreach to withdraw its 'Incremental New to Openreach Offer', as we consider the charges are not fair and reasonable and could harm the development of network competition," Ofcom said on Tuesday.
Impact on Internet Service Providers
BT's Openreach network, which serves internet service providers (ISPs) such as Sky and Vodafone as well as BT, was targeting aggressively discounted pricing at new customers, while keeping prices for others unchanged - a move Ofcom said could undermine "sustainable competition".
The deal, which would apply only to customers above an ISP's normal number of sign-ups, offered providers discounts of up to £9.50 per customer for up to 30 months.
Ofcom's Stance on Market Competition
"Openreach must be able to compete, but they cannot use their significant market power to drive other networks out of the market," said Natalie Black, Ofcom's Group Director for Infrastructure and Connectivity.
Britain's fibre broadband market is still developing, with around half of households that can access full-fibre broadband yet to sign up.
Other Openreach Deals Under Review
Ofcom said it was not minded to block two other deals proposed by Openreach, saying they were unlikely to prevent other networks competing.
Virgin Media Targeted Offer
One takes aim at Virgin Media by offering a one-off £50 discount for new full-fibre customers above the usual number of sign-ups in areas where the second-largest network operates.
Price Cap on High-Speed Connections
The second caps how much providers pay for new high-speed connections.
(Reporting by Yamini Kalia in Bengaluru and Paul Sandle in London; Editing by Nivedita Bhattacharjee and Kate Holton)
