Just something I have been pondering recently...
What would fundamentally break, or anything, if Ofcom forced "line rental" to be a fully transparent pass-through charge (akin to airport taxes on flight tickets) shown as a separate item on a broadband bill, and everything else would need to be bundled to internet service and telephone service?
Now we have the regulated line rental charge from OR, which forms less than a half of "line rental charge" from an ISP, and then especially with ADSL connections, a minuscule "broadband" charge. It is not uncommon to find offers where "broadband" component is zero for a fixed term. ISP line rental charges seem to also be more or less fixed - they all charge the same.
It is obvious ISPs hide most of their operating costs and probably profit generation as well - inside the "line rental" that is not subject to much competition. I remember deals from years ago where there was a discount on line rental if the customer paid 12 months in advance, but even those seem to have disappeared. Line rental charges seem to go up every year, despite Openreach line rental charges staying level or going down.
I as a customer do not benefit anything from an arbitrary split into Broadband charge and ISP part of line rental charge. To me they are just the same, and include backhaul costs, hardware, service, advertising and profit. But as ISPs do not really compete with the line rental component that has very little to do with Openreach line rental, they have actually managed to hide most of their business into a component not subject to competition.
If this split was removed and OR line rental would be the only "line rental", there would be some benefits. First, of course, would be the pass through nature. If OR charges go down, so does a customer bill. Another benefit would be the disappearance "FREE (subject to line rental)" deals, and the whole non-regulated price would be visible there as a lump sum. If the price subject to competition would be around £14 instead of £2, I have a hunch it would actually create better deals for customers.
The worst thing that could happen is nothing. If there is no slack in the ISP line rental, then everyone just keeps paying exactly the same.
Is there a reason for the current model? I have always found the split between broadband and ISP component of line rental confusing, and it obfuscates the true cost of providing an internet service.