Statement published 28 March 2018
Broadband and fixed telephone services typically rely upon a fixed connection between the local telephony exchange to a home or business premises. We have undertaken a review of the regulation of the wholesale local access (WLA) market for services that use this fixed connection.
Ofcom issued a modification (PDF, 370.8 KB) (the Modification) to the SMP conditions on regulated charges for access to some of BT’s copper-based wholesale broadband services. Ofcom also issued a note explaining the Modification (PDF, 144.2 KB).
Our November 2017 regulatory financial reporting consultation sets out our proposals to address reporting issues arising out of this consultation.
In light of stakeholder responses and our own further analysis, we are now consulting further on specific issues, that have the effect of changing the levels of our proposed charge controls.
In response to a stakeholder query on some of the calculations comprising the efficiency assumptions in Ofcom’s WLA charge control consultation, we set out our clarification below.
Efficiency – regulatory cost analysis
In paragraphs A15.112-117 of the March 2017 WLA Consultation we described the analytical approach underlying our regulatory cost analysis. This analysis, in combination with other sources of evidence, helped to inform our proposed efficiency forecast used in the top-down model.
Following a stakeholder query relating to paragraph A15.117 of the consultation on our approach to weighting the calculated pairwise efficiencies across all components in each year, we have provided a more detailed explanation of our approach below.
1. In Annex 15 of the consultation we defined ‘Relevant Services’ as the set of services covered by the top-down model. Table 3.1 of the March 2017 WLA consultation contains a list of the services covered by the top-down model. See Wholesale Local Access Market Review – Volume 2.
On 9 August 2017 we published a consultation that sets out how we propose to amend our charge control proposals, in the light of the additional relevant costs that BT would incur, should BT enter into a clear and public agreement with the Government committing BT to make the investment in universal broadband.
In response to stakeholder queries on the Ofcom WLA charge control consultation, specifically the Wholesale Local Access Consultation Models, we set out several clarificatory statements. The questions are arranged by the model they relate to, and worksheet or cell range references are provided where necessary.
Following publication of the WLA market review consultation, BT requested that we publish an unredacted version of table A15.17 in Annex 15, which shows Ofcom’s estimates of BT’s divisional efficiency. This has now been published in an updated version of the Annexes 1-19 document.
This document sets out the conclusions of our wholesale local access market review in relation to the UK excluding the Hull Area.
Wholesale local access refers to the connections from the local telephone exchange to a home or business premises, which are used to provide broadband and other services at the retail level.
We have concluded that BT continues to have significant market power in the wholesale local access market and have imposed a package of remedies to address the competition concerns arising from BT’s SMP, which are designed to promote investment and competition.
This document consists of three volumes and detailed annexes we refer to in Volumes 1-3:
We have separately published our Quality of Service statement, which sets out the detailed requirements we are imposing to ensure quality of service on BT’s network.
Annexes 1–19 (PDF, 5.6 MB)
Annex 20 – Cartesian report bottom-up model (PDF, 1.3 MB)
Annex 21 – NERA – beta of mobile vs fixed (PDF, 747.7 KB)
Annex 22 – Cartesian GEA allocations (PDF, 1.9 MB)
Annex 23 – Legal Instruments (PDF, 952.6 KB)
Quality of Service for WLR, MPF and GEA (Mar 2017)
MPF Rental at Service Maintenance Level 1 (Mar 2017)
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