Openreach’s fibre broadband discounts do not raise competition concerns – Ofcom

Openreach’s plan to offer discounted rates on its fibre broadband products does not raise competition concerns, regulator Ofcom has provisionally said.

The broadband infrastructure firm announced plans last month to offer lower wholesale prices to other internet providers for access to its fibre network, as part of its Equinox 2 scheme.

But network rivals raised competition concerns and argued that Openreach, which is part of telecoms giant BT Group, was using its dominant market position to price out smaller infrastructure companies.

The boss of Virgin Media, Lutz Schuler, said in December it was “vital” the proposals were “thoroughly scrutinised” by Ofcom.

Ofcom was notified of the proposals and “carefully assessed” the offer – considering the interests of consumers, and the impact on competitors and other broadband providers.

But the telecoms regulator said on Friday that it does not think it should intervene to prevent Openreach from introducing Equinox 2, as it does not consider the proposals to be anti-competitive.

An Ofcom spokesman said: “Our overriding objective is to bring faster, better broadband to people across the UK – promoting competition and investment in high-speed networks, and making sure there’s a level playing field for all companies.

“With this in mind, we’ve assessed Openreach’s proposed new pricing plans and, based on the evidence available to us so far, we don’t consider them to be anti-competitive.

“We’ve set out our provisional reasons for this and are now seeking views from all interested parties, which we’ll take into account before making a final decision.”

The regulator is inviting responses to its consultation by March 4, before deciding how to proceed.

It is aware of the concerns that Openreach lowering full-fibre prices could “act as a barrier to competitors’ entry and expansion in the market”, Ofcom stressed.

It is therefore gathering evidence to decide whether the issue should be investigated in more detail.

Mark Shurmer, managing director of regulatory affairs at Openreach, said: “We share Ofcom’s initial view that our new full fibre offer isn’t anti-competitive.

“Our customers wanted sharper pricing to help them upgrade their customers to faster, more reliable broadband connections, so this is good news for UK consumers and businesses.

“It also supports our continued multibillion pound investment to upgrade the UK’s broadband infrastructure.”

Openreach is due to roll out its new pricing offer for full-fibre broadband from April 1.