Ofcom gives provisional clearance to Openreach FTTP broadband price cut

The UK telecoms regulator, Ofcom, has initiated the final consultation on the recent proposal from Openreach to overhaul its wholesale pricing of Fibre-to-the-Premises (FTTP) broadband products which could potentially result in cheaper broadband pricing for consumers.

The discounts, known as the ‘Equinox’ offer, aim to give ISPs using Openreach’s greater price certainty over the next decade.

Ofcom currently requires Openreach to warn them of any upcoming pricing changes 90 days in advance. The warning allows the regulator, and market, to assess the impact the proposed price changes would have.

If Ofcom gives final approval to the price changes, the discounts will go live from 1st October 2021.

The regulator has launched a new consultation on the pricing changes which will last until 6th September 2021. Alternative network providers, including KCOM, Cityfibre, Virgin Media, and Fern Trading, have all expressed concerns that the changes could have an anti-competitive impact on their respective businesses.

Conversely, providers that piggyback on Openreach’s infrastructure, including Vodafone, Sky Broadband, and TalkTalk, were “generally supportive of the Equinox Offer”.

TalkTalk went as far as to say that the proposed wholesale prices are still too high, saying that “the discounted prices under the Equinox Offer are substantially above cost, leading to consumer detriment”.

Ofcom’s view so far has been that there is no real cause for concern. “Having assessed the offer, and taken account of stakeholders’ initial views on it, our provisional view is that we should not take any action at this time,” the regulator said.

The regulator also said that its “provisional conclusion is that the Equinox Offer is consistent with promoting investment in gigabit-capable networks by Openreach and other operators and promoting network-based competition, ultimately delivering better consumer outcomes”.

With regards to how that pricing changes would affect competition, Ofcom said that it understood that alternative providers “are likely to face stronger competition from Openreach”, however the changes “do not raise concerns in terms of targeting or their impact on altnet build”.

Ofcom is expected to make a statement on their final decision at the end of September.