Wholesale local access market review

Published: 31 March 2017
Consultation closes: 9 June 2017
Status: Closed (statement published)

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.

Update 22 May 2018: Modification to the SMP conditions

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).

Update 24 November 2017: Regulatory financial reporting consultation

Our November 2017 regulatory financial reporting consultation sets out our proposals to address reporting issues arising out of this consultation.

Update 14 September 2017: Further consultation on specific issues

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.

Update 17 August 2017: Clarification on efficiency assumptions

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.

  • We calculated the expected cost for each component in year [x] across all services by taking the restated cost in year [x-1] and estimating price and volume impacts using the formulae that underpin the top-down model;
  • We then weighted the actual and expected cost for each component in year [x] using that component’s volumes for the Relevant Services relative to all other services1;
  • We then calculated the absolute efficiency gain (in £) for each component as the difference between the expected and actual cost for that component in year [x]; and
  • Finally, we calculated the overall efficiency gain in year [x] as the sum of the absolute efficiency gain across components in year [x] divided by the sum of the expected cost across all components in year [x].

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.

Update 9 August 2017: Consultation on amendments to charge control proposals

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.

Update 9 June 2017: Clarifications on models

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.

Clarifications on Ofcom WLA Charge Controls Consultation (PDF, 509.0 KB)

Update 2 June 2017: Updated version of annexes 1-19

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.

Update 20 April 2017: Clarifications and corrections

Read our clarifications and corrections to the WLA Market Review consultation document of 31 March 2017 (PDF, 293.4 KB)

Older documents

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:

  • Volume 1 sets out our analysis of the wholesale local access market and our decisions to impose a number of remedies on BT.
  • Volume 2 sets out the detail of the charge controls we are imposing on BT’s MPF local loop unbundling and ‘up to 40 Mbit/s’ wholesale services.
  • Volume 3 sets out the details of the physical infrastructure access (PIA) remedy we are imposing on BT giving duct and pole access (DPA).

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.

Draft statement volume 1: Wholesale local access market review (PDF, 2.3 MB)

Draft statement volume 2: Wholesale local access market review (PDF, 1.1 MB)

Draft statement volume 3: Wholesale local access market review (PDF, 2.3 MB)

Datganiad drafft: Adolygiad y farchnad mynediad lleol cyfanwerthol (PDF, 285.6 KB)

Draft statement annexes 1–9 (PDF, 3.4 MB)

Draft statement annexes 10–16 (PDF, 2.5 MB)

Draft statement annexes 17–27 (PDF, 4.3 MB)

Draft statement annex 28 (PDF, 1.9 MB)

Draft statement annex 29 (PDF, 1.2 MB)

Draft statement annex 30 (PDF, 338.1 KB)

Draft statement annex 31 (PDF, 2.9 MB)

Draft statement annex 32 (PDF, 942.0 KB)

Draft statement annex 33 (PDF, 1.3 MB)

Supporting documents

WIK-Consult report – The Benefits of Ultrafast Broadband Deployment (PDF, 2.2 MB)

Consultation: Wholesale local access market review (31 March 2017)

Consultation: Wholesale local access market review volume 1 (PDF, 1.7 MB)
Consultation: Wholesale local access market review volume 2 (PDF, 1.1 MB)

Ymgynghori: Crynodeb Gweithred (PDF, 188.0 KB)

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)

Supporting documents

Broadband Residential Research (PDF, 616.8 KB)
Wholesale Local Access consultation models (ZIP, 11.9 MB)
QoS intermediate model (XLSM, 678.5 KB)

Related consultations

WLA market review: Promoting network competition in superfast and ultrafast broadband (Nov 2017)

Regulatory financial reporting: Consultation on proposed directions to BT arising from the wholesale local access and wholesale broadband access market reviews (Nov 2017)

Further consultation on proposed charge control for wholesale standard and superfast broadband (Sept 2017)

Further consultation: Quality of Service for WLR, MPF and GEA (Sept 2017)

WLA market review: Recovering the costs of investment in network expansion (Aug 2017)

Pricing proposals for duct and pole access remedies (Aug 2017)

WLA market review: Duct and pole access remedies (Apr 2017)

Quality of Service for WLR, MPF and GEA (Mar 2017)

MPF Rental at Service Maintenance Level 1 (Mar 2017)

WLA market review: Initial proposals to develop an effective PIA remedy (Dec 2016)


Contact information

WLA team
Floor 4
Ofcom, Competition Group
Riverside House
2A Southwark Bridge Road
London SE1 9HA
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