Statement: Existing Openreach FTTP offers with geographic pricing

Published: 18 March 2021
Consultation closes: 29 April 2021
Status: Closed (statement published)

Statement published 2 July 2021

In the wholesale fixed telecoms market review (WFTMR) statement, we decided to prohibit geographic pricing for some services to address our concern that Openreach could use targeted discounts to undermine new alternative network build. Openreach can apply to us for consent to use different geographic prices where this would otherwise be prohibited.

At the time of the WFTMR statement, Openreach had three live offers which result in differences in rental pricing on a geographic basis, which would in principle be prohibited by the geographic discrimination prohibition. In order to avoid disruption to the market, we temporarily exempted these offers from the geographic prohibition until 1 August 2021 while we consulted on whether to consent.

Having considered responses, in this statement we confirm our decisions to grant consent in relation to these three offers. This permits the existing geographic pricing to continue until the current offer periods end.

This consultation relates to three offers that were introduced before publication of our WFTMR statement on 18 March 2021. These offers result in differences in rental pricing on a geographic basis, and would in principle be prohibited by the geographic discrimination prohibition introduced in the WFTMR statement. In the consultation, we assessed these offers and our provisional view was that the geographic pricing in these offers does not raise concerns.

On 28 May 2021, Openreach notified the industry via ACCN OR721 of an update to one of these offers, FTTP only offer v2. The update includes a revision to the secondary offer area so it includes areas covered by Openreach’s Fibre Cities programme that are declared as ready for service from 1 April 2020 to 30 September 2021. Currently, the offer covers areas ready for service from 1 April 2020 to 31 August 2021. This extends the secondary offer area to include one additional month (i.e. September 2021) of FTTP build in Openreach’s Fibre Cities programme. We understand that the reason for this extension is that Openreach is in discussion with communications providers about a new pricing offer, but this new offer will be subject to the requirement to provide 90 days’ notification. Therefore, this new offer will not be in place by 1 September 2021.

We are still considering responses to the consultation. However, we do not consider this change to be material to our analysis set out in the consultation. Therefore, we propose that our final decision on whether or not to grant a consent in relation to the FTTP only offer v2 will apply in relation to the updated offer. If stakeholders wish to make additional representations in relation to the small change to the geographic footprint of the FTTP only offer v2, they should do so by 5pm on Thursday 17 June.

In relation to paragraphs 3.16 and 3.24 of the consultation, we are issuing the following clarification:

To be eligible for inclusion in the Local Marketing Offer or FTTP only offer v2, FTTP orders need to be placed by 30 September 2022. For the period until 30 September 2022, the rental prices for the Local Marketing Offer and FTTP only offer v2 are specified on Openreach’s website. After this point, rental prices for FTTP connections included under either offer are subject to a maximum CPI increase up to 31 March 2025 for FTTP only offer v2, and up to 30 September 2026 for Local Marketing Offer respectively.

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