Briain’s telco watchdog, Ofcom, is delaying a decision on Openreach’s proposed Equinox 2 wholesale pricing scheme for fiber broadband.
The move concerns discounts Openreach, the infrastructure arm of the UK’s former national telecoms monopoly BT, will offer to ISPs that use fiber networks to serve their customers.
The issue has already proven controversial with rival network operators Complain that Openreach is unfairly devaluing themDespite this, regulator Ofcom has previously indicated that it would not stop Openreach from introducing Equinox 2.
Ofcom was expected to announce a final decision on Equinox 2 at the end of March following a consultation process. However, it has now announced that it has received a number of detailed responses, some of which “raise issues requiring further evaluation”.
As a result, Ofcom said it expected it would take another two months to complete the necessary additional analysis and reach a final decision. However, Equinox 2 offers he was due to start on April 1st.
“In order to provide certainty and stability to the industry, we do not believe it is appropriate to launch an offer until we have made a final decision,” Ofcom said in a statement.
Additionally, Ofcom has hinted that it is prepared to exercise its powers under the 2003 Communications Act to block the launch unless Openreach voluntarily postpones it.
This does not seem necessary as Openreach has issued a statement deferring the new pricing scheme.
“While we continue to share Ofcom’s initial view that our offer is not anti-competitive, it is important that the regulator takes time to fully and fairly consider all the feedback it receives, so we have decided to take full fiber into consideration. The discounted price is April 1st,” said Openreach.
The company also said that if Ofcom’s initial valuation is confirmed, customers will definitely benefit from the Equinox 2’s pricing, which dates back to April 1.
Equinox 2 is an extension of the original Equinox contract, effective October 2021. This provided ISPs with an incentive to sign up for fiber-to-the-premises (FTTP) for new subscribers over the next decade instead of using traditional connections. Copper cables are part of a move to get more in the UK for fiber optic broadband.
These incentives were primarily discounts for wholesale access to Openreach’s fiber network. The alternative network provider (altnet) complained that this gave Openreach an unfair advantage.
CityFibre, one of the altnet providers, took Ofcom to the Court of Competition Appeals for its decision to allow the original Equinox scheme. Appeal dismissed.
Openreach’s position was perhaps not helped by an article published in the Financial Times in February. In the article, BT Group CEO Philip Jansen is quoted as saying that his company’s broadband network is an “unstoppable machine” and that the situation will “end in tears”. Many rival networks.
Ofcom has taken the next step publishing In a correspondence with Jansen on the matter, Ofcom CEO Dame Melanie Dawes explained that his comments were “taken out of context” after telling him the report had raised “serious concerns.” I’m here.
The delay in Ofcom’s decision therefore raises the possibility that regulators will not grant approval for Equinox 2, which was supposed to include an additional set of incentives to encourage the use of higher bandwidth services. .
PP Foresight’s media and telco analyst Paolo Pescatore thinks Ofcom may be having second thoughts now.
“Is Ofcom changing its minds about rival infrastructure suppliers like Virgin Media O2 and other Altnets? [Openreach] Is the price too low to keep it out of the market?” Pescatore said.
He added that regulators are now facing difficult decisions. Previous comments suggested that he would not block Equinox 2, but there were protests among the altnet about the impact on competing abilities.
“Ofcom now has the difficult task of assessing the impact of these new prices and whether it will adversely affect the market and choice,” Pescatore said.
Virgin Media O2 declined to comment, other than to say, “Ofcom’s decision to postpone is clear.”
Openreach, on the other hand, claimed it was only trying to do its part to help upgrade the country’s infrastructure to a modern fiber network.
“Our proposal is a response to customers looking for low prices and long-term certainty to help them switch to faster and more reliable broadband connections. We are also upgrading the UK broadband infrastructure. We also support continued multi-billion-pound investments to
In response to the news of Ofcom’s decision to extend its review of the Equinox 2, CityFibre CEO Greg Mesch said today: UK consumers and businesses will benefit in the long term from a healthy competitive market. ®
