20 May 2014
Telephone and broadband customers can expect improved line repairs and installations, under draft decisions which Ofcom has notified to the European Commission.
Under the changes, the vast majority of phone and broadband faults would have to be repaired within two working days, while most customers wanting a new line must receive an appointment within 12 working days.
These targets are expected to apply from this summer and are set out in new minimum performance standards for Openreach, the company that installs and maintains connections to BT's network on behalf of competing providers.
Should Openreach fail to meet the new targets, it would face sanctions from Ofcom, which could include fines.
The new targets are designed to ensure better service for telephone and broadband customers in future. Ofcom will monitor Openreach's performance closely and intervene further if required.
Under the draft measures, Openreach must in future:
The targets escalate over three years, reaching their full level in April 2016.
Separately, Ofcom will also review the standards of redress, which could include compensation, that landline and broadband providers offer to consumers when things go wrong.
Today's draft statement is part of Ofcom's Fixed Access Market Reviews, a wide-ranging set of decisions in the wholesale telecoms markets used by companies to offer telephone and broadband services to UK consumers. Different broadband providers sell superfast services over BT's network. There are now around 2.7m such connections in the UK.
Currently, if a consumer wishes to change superfast broadband provider, the company they are switching to must pay a £50 fee to Openreach - which is often passed on to the customer. Ofcom intends to cut this wholesale fee to £11, which would allow providers to offer lower retail start-up fees.
Also, where an existing superfast customer switches to a different supplier, the minimum length of the wholesale contract between BT and the new supplier would reduce from a year to one month. This gives flexibility for telecoms providers to offer shorter retail contracts.
Ofcom is not intending to set the level of wholesale prices for Openreach's fibre service, as it believes the price of fibre broadband is currently constrained by the availability of standard broadband services, and by competition from Virgin Media's cable network. Ofcom will soon propose new guidance on its future approach to the 'margin' that BT sets between its wholesale and retail fibre prices.
Ofcom has also today notified draft controls on the prices that Openreach can charge other telecoms providers for some of its standard broadband, wholesale services.
These 'charge controls' make reference to the consumer price index (CPI) measure of inflation, an approach which incentivises Openreach to become more efficient. They can bring about price cuts where providers pass on savings to retail customers.
The charge controls would come into effect on 1 July 2014 and run until 31 March 2017. They cover wholesale charges for telephone and standard broadband services delivered to homes and businesses over Openreach's copper network in three ways:
All of today's draft decisions are subject to review by the European Commission, following which Ofcom expects to publish final statements in June.
Ofcom conducts these reviews every three years under the European telecoms framework. In the UK, there are also legally-binding undertakings that were agreed between Ofcom and BT in 2005. These resulted in the 'functional separation' of BT and the creation of Openreach to provide access for competitors to the telecoms network. This combination of regulation has resulted in strong competition in the supply of broadband and telephone services, which has benefited consumers.
As next year is the tenth anniversary of the undertakings with BT, Ofcom anticipates that this will provide a sensible opportunity to take stock of their effectiveness in light of general market developments.
NOTES FOR EDITORS