Ofcom has rejected claims by TalkTalk that BT is unfairly pricing its fibre broadband services for broadband providers.
However, the telecoms watchdog has proposed new requirements on BT to stimulate competition for superfast broadband.
ISPs including TalkTalk, Sky, Zen Internet and Plusnet all offer FTTC (Fibre to the Cabinet) services using BT’s Openreach network. Openreach charges each ISP for the use of its network.
Last year TalkTalk complained to Ofcom, saying that that wholesale prices for FTTC were too high while at the same time the BT Infinity products were priced aggressively low.
Ofcom said that it had “investigated TalkTalk’s complaint under the Competition Act 1998, and has provisionally decided there are no grounds for action.”
A BT spokesperson said that the firm was “pleased that Ofcom has rejected TalkTalk’s competition complaint and shown that BT’s fibre pricing is completely fair.
“The consultation is welcome. We hope it results in regulatory clarity and certainty, and discourages spurious claims such as that made by TalkTalk.”
While Ofcom has rejected TalkTalk’s complaint of margin squeezing, the regulator wants to put controls in place to prevent BT from potentially doing such a thing in the future. A separate consultation, which closes on August 28, has been launched to discuss how big the margin between BT’s wholesale and retail charges for superfast broadband can be.
TalkTalk argued that without regulation, BT’s dominance of the market would become impossible to compete with after 2017.
In a statement, TalkTalk said that it had: “long maintained that the time has come for fibre to be more robustly regulated, starting with a margin squeeze test.
“This leads naturally towards full price regulation in 2017. What matters most is ensuring a level playing field and competition for fibre in the future. Once implemented, these new rules will make British consumers and businesses better off.”
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