If the Line Rental is basically an OPENREACH Charge (to maintain etc the Phone Infrastructure etc), then any cross-subsidising to the ISP part of BT supplying '"FREE" BT Sports' would be illegal; and should be reported to the appropriate Regulator/s.
Can anyone enlarge on this aspect?
It is not illegal.
Service providers purchase a line from Openreach at a regulated price as a component of the service(s) they sell to End Users. The price for the product (or bundle of products) to the End User is not regulated - the SP is free to choose whatever price they like for their product. The rationale being that a competitive market will 'self-regulate' pricing at the retail level.
There is the 'Margin Squeeze test', which is to ensure that pricing is not too low and covers costs and a profit (margin).
This is to prevent predatory pricing where something is sold below cost to the detriment of competitors who would be put out of business if they sold at the same (loss making) price.
An analogy could be a company buys components from suppliers (let say microchips) that they use in building a computer. They buy these chips at the same price as every other customer of the supplier. They can choose to sell the computer at whatever price they like. The purchase of the components is one element of cost (and will no doubt influence the final price as costs need to be less than price), but price won't equal cost.
If the final price of the computer is deemed too high by End Users, they can or will buy from a lower priced competitor.
Edited by deleted (Fri 29-Aug-14 10:25:08)