Ofcom is about to reset the price of LLU – these are the products that most UK ISPs rely on to offer broadband services.
We are really worried that the telecoms regulator Ofcom is going to let BT get away with charging excessive LLU prices that could result in you paying £20 to £30 a year more than you should do for your broadband. Openreach – the part of BT that runs the access network – is already making huge profits above Ofcom’s target rate. These rises will in effect mean you will being taxed to fund even more excess profits for BT. These LLU price rises will make us probably the most expensive in Europe (and possibly the laughing stock too).
These unnecessary price rises will have two other downsides. Firstly, the price rise will exclude some of the poorest from enjoying the benefits of broadband. A leading UK economist has calculated that over 1.5 million people could be excluded.
Secondly, the rise might weaken the intense competition that UK consumers have enjoyed over the last three years that has been allowed us to have world leading services at some of the lowest prices. BT seemingly want to return to the good ol’ days (for them) of a monopoly in the ADSL market with high prices and limited choice.
Not surprisingly, TalkTalk are fighting this ‘tooth and nail’. Even though BT and Ofcom have refused to share much information with us we have identified areas where we think BT have exaggerated their costs by £100s millions to try and justify these huge price rises.
- They have claimed they can only improve their efficiency by 0.6% per year – analysis by Ofcom’s own consultants and others suggest they should be able to improve their efficiency by 5% a year
- BT have unfairly loaded costs and losses from BT Global Services and other parts of BT onto these LLU products
- They are insisting they should get a return on their copper network of 12% – a rate that given their ‘utility’ status is arguably bordering on profiteering
We are submitting our response to Ofcom later this week. We’re hoping Ofcom will see sense and clamp down on this potential rip-off.
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D Wycherley
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Andrew Heaney
Andrew Heaney
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