On 19 March 2009, we published a consultation document setting out the initial findings of our review of the state of competition in the retail narrowband telephony markets, which cover analogue and digital (ISDN) telephone lines, and calls for consumers and businesses (the March Consultation).
We have now completed our review. Our conclusions are that most of the UK retail markets, with the exception of Hull, are now effectively competitive and, specifically, BT no longer has significant market power (SMP) in the provision of retail fixed narrowband analogue access and retail calls markets in either the residential or business sectors. While we consider that BT still has SMP in the retail ISDN2 market, we consider that it is appropriate to rely solely on wholesale remedies in this market as the existing retail remedies no longer offer additional benefits to the downstream competitive process. We have decided that we need to undertake a further review of the ISDN30 market before we conclude on whether or not this remains an appropriately defined market and, if so, whether it is effectively competitive.
These decisions represent the next stage in a process of deregulation at the retail level, which has been supported by changes to the regulation of BTs wholesale services. In 2006, we lifted retail price controls, given the improvement in competition in the market.
We consider that this deregulation will lead to a further increase in competition in these retail markets. BT will be able to more freely compete in the supply of bundles of services which include fixed telephony together with other telecommunications service such as mobile communications, broadband and television. This should ensure that competition will continue to lead to enhancement in services and greater value for money for consumers.
Our decisions do not, however, affect BTs continued universal service obligations under the Universal Service Order (USO) to provide basic telephony services (including access). Equally, Ofcom will continue to regulate the retail activities of BT, on an equal basis with other Communications Providers, through other sector regulations. We will continue to monitor consumers experience of these services and will intervene, if appropriate.