BT accounts reveal fear of retrospective price adjustments

BT announced its annual results today. Press comment focused on BT’s profit growth and the reduction in their pension deficit. However, both of those stories are not quite such good news for BT as might be supposed. Profit growth came from BT cutting costs faster than the fall in BT’s revenues – trends which are … Read more

Ofcom consults on reductions in LLU and WLR prices

Ofcom today started a consultation on price controls for local loop unbundling and wholesale line rental products provided by Openreach, the functionally separate local access division of BT. This consultation follows on from Ofcom’s finding in its wholesale local access and wholesale fixed analogue exchange line market reviews that BT held a position in those markets … Read more

Ofcom proposes prohibition of evergreen customer contracts

Earlier this week I discussed the changes Ofcom are proposing to the General Conditions of Entitlement to implement the revised European Regulatory Framework. It now seems that Ofcom are also taking the opportunity to look at other changes to the General Conditions, yesterday publishing proposals to amend General Condition 9 to prohibit providers of fixed voice and … Read more

DSAC an appropriate test for assessing LRIC cost-orientation

Today’s CAT judgment confirmed that Ofcom’s use of distributed stand-alone cost (“DSAC“) was an appropriate method to assess whether a regulated Communications Provider who had been found to possess Significant Market Power in a particular market was charging in a way that was ‘reasonably derived from the costs of provision based on a forward-looking long run incremental cost approach, allowing an appropriate mark-up … Read more

UK wholesale broadband access proposed charge control: Ofcom estimates BT’s weighted average cost of capital downwards to between 8.5% and 10%

Ten days ago Ofcom published a lengthy consultation on charge control for Wholesale Broadband Access, accompanied by a report from the Brattle Group on BT’s equity beta. Wholesale broadband access is the ‘current generation’ (i.e. primarily DSL) wholesale broadband access products sold by BT to its retail competitors. Ofcom’s most recent review of this market geographically segmented the … Read more

BT sets prices for passive access to ducts and poles

Before Christmas, this blog flagged that last-mile fibre access (also know as next generation access, or NGA) was a commercial and regulatory issue that would be high on the agenda over the coming years.  On Friday, BT announced its draft pricing and product proposals for ‘passive access’ to its ducts and poles in the UK.  (In the NGA world passive … Read more