Ofcom deregulates 70 per cent of broadband market

Could mean better deals for consumers

Andrea-Marie Vassou, Computeract!ve 23 May 2008

Telecommunications regulator Ofcom has announced that it will deregulate around 70 per cent of the UK's wholesale broadband market in a move that could mean cheaper broadband for customers.

Until now, BT has been required to sell broadband connections to other Internet Service Providers (ISPs) at a price set by Ofcom. Recently, however, other providers, such as Tiscali, Talktalk and Sky have set up "unbundled" networks of their own, which means that they, too, can sell broadband services to other, smaller ISPs.

Ofcom will now deregulate these wholesale broadband connections in areas where four of more companies can provide them. This could increase competition and lower the final price of broadband for consumers.

Although areas with fewer than four wholsale broadband suppliers will continue to be supervised, around 70 per cent of the UK will be affected by the change.

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

"It shows that we are determined to deregulate wherever we can in a way that is consistent with the broader public interest. We now need to build on these foundations and see timely investment and a competitive market emerge for next generation access as well."

However, not everyone is as enthusiastic. Moneysupermarket, while welcoming Ofcom's decision, said that the focus should be on regional pricing structures, which it says are unfair.

The website's Rob Barnes said that Ofcom "needs to ensure that 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".

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