Openreach fiber broadband discounts do not raise competition concerns – Ofcom

Openreach’s plan to offer discounted rates on its fiber broadband products does not raise competition concerns, regulator Ofcom has said provisionally.

The broadband infrastructure firm announced plans last month to offer lower wholesale prices to other internet providers to access its fiber network, as part of its Equinox 2 scheme.

But network rivals raised competition concerns and argued that Openreach, which is part of telecoms giant BT Group, was using its dominant market position to price out smaller infrastructure companies.

Virgin Media boss Lutz Schuler said in December that it was “crucial” that Ofcom “scrutinized” the proposals.

Ofcom was informed of the recommendations and carried out a “careful assessment” of the offer – considering the interests of consumers, and the impact on competitors and other broadband providers.

But the telecoms regulator said on Friday that it does not think it should intervene to prevent Openreach from introducing Equinox 2, as it does not consider the proposals to be anti-competitive.

An Ofcom spokesman said: “Our main objective is to bring faster and better broadband to people across the UK – promoting competition and investment in high-speed networks, and ensuring a level playing field for all companies.

“With this in mind, we have assessed Openreach’s new pricing plans and, based on the evidence available to us so far, we do not consider them to be anti-competitive.

“We have set out our provisional reasons for this and are now seeking the views of all interested parties, which we will take into account before making a final decision.”

The regulator is seeking responses to its consultation by March 4, before deciding how to proceed.

It is aware of concerns that Openreach’s lowering of full-fibre prices “could act as a barrier to the entry and expansion of competitors in the market”, Ofcom stressed.

He is therefore gathering evidence to decide whether the matter should be investigated further.

Mark Shurmer, managing director of regulatory affairs at Openreach, said: “Our initial view from Ofcom is that our new fiber offer is not entirely anti-competitive.

“Our customers wanted sharper pricing to help them upgrade their customers to faster and more reliable broadband connections, so this is good news for UK consumers and businesses.

“It also supports our continued investment of one billion pounds to upgrade the UK’s broadband infrastructure.”

Openreach is to roll out a new pricing offer for full fiber broadband from 1 April.

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