Ofcom deregulates broadband market

Ofcom's moves to increase competition and reduce prices in the UK's broadband market are missing the point, according to price-comparison service Moneysupermarket.com.

The industry watchdog has announced that it will deregulate around 70 per cent of the wholesale broadband market as incumbent communications provider BT is no longer the dominant company.

This is because other providers such as Tiscali, TalkTalk and Sky have LLU - or 'unbundled' - networks of their own, which can provide services to customers without relying on BT's infrastructure.

This means that these companies can sell wholesale services to other, smaller ISPs. Ofcom hopes that by deregulating the wholesale market in areas of the country where four or more companies can provide broadband services it will increase competition in the market, which could ultimately result in lower prices for customers.

Ed Richards, Ofcom's chief executive said: "This is a major step forward in the UK broadband market reflecting the success we have had in promoting effective competition."

But Moneysupermarket.com, while welcoming Ofcom's decision, said that the focus should be on regional pricing structures, which it says are unfair.

"Although Ofcom is deregulating 70 per cent of the wholesale market it needs to focus more on the unfair regional pricing structure. To do this it needs to ensure providers accessing wholesale areas are charged a fair amount in order for the provider to then pass on the best value deal to the consumer," said Rob Barnes of Moneysupermarket.com.

www.ofcom.org.uk
www.moneysupermarket.com