Ofcom implements BT margin rule
March 19, 2015
UK regulator Ofcom has confirmed it will push ahead with plans to monitor the price BT charges rivals to access its superfast fibre network after taking on board concerns from the European Commission.
Peers such as TalkTalk have long complained that BT overcharges for wholesale access to its infrastructure, helping it fund additional services such as sports programming which it gives to customers free as part of a broadband bundle.
Ofcom had set out a plan in January to apply a margin-squeeze test on BT, that would measure the gap between the wholesale price it charges rivals and the retail price it charges its customers, to make sure there was a sufficient margin for competitors to make a profit from the infrastructure.
But the European Commission voiced concerns, saying the company should be given more flexibility in how it covers its costs, including football rights.
Ofcom has announced it would push ahead with the test from April 1st, after clarifying how it would take into account the way BT charges for sports.
It said BT would currently pass the test, but the new rule would be a safeguard that ensured that any increases in BT’s costs must be reflected in its prices.