OFCOM introduce Market 1 price controls

on IPStream Connect 8M services currently used by BT Retail, TalkTalk, Sky, Orange,
Virgin Media and Entanet

Prices to fall in real terms over coming years, about 11% less than inflation.

http://media.ofcom.org.uk/2011/07/20/better-value-ru...

Don't you love it regulator has two slightly different pages on same issue...

http://consumers.ofcom.org.uk/2011/07/better-value-r...
http://media.ofcom.org.uk/2011/07/20/better-value-ru...

Just written news item, which John should pop up soon.

presumably http://consumers.ofcom.org.uk is the "Dumb Britain" version with a picture.

At that rate how long before OFCOM think BT should pay the other suppliers for using their service?

Well if BT doesn't like the price cuts, roll out more WBC and remove the IPStream

the news item isn't clear about the single specific product - IPStream Connect 8M services currently used by BT Retail, TalkTalk, Sky, Orange, Virgin Media and Entanet

IPStream Connect, i.e. implemented using 21CN/WBC hardware I think is exempt.
Only lines running IPStream Max on the older DSLAM's.
In an exchange where both kits are available, only if using ADSL on the old hardware will the reduction apply.

Only once the accountants at each ISP have done their sums will we see any changes. Those with most opportunity for a price cut would be those who are surcharged for being on a non-LLU exchange by e.g. O2, Sky, TalkTalk

IPStream Connect, i.e. implemented using 21CN/WBC hardware I think is exempt.

I think you have the wrong end of the stick. From OFCOM PR on web site :-

"Charge control only BT's IPStream Connect Max and Max Premium products"

"Scope of the charge control the majority of stakeholders agreed with the our proposal to charge control IPStream Connect only"

see also original consultation document. Argument was that over 80% of Market 1 consumers are on IPStream Connect anyway.

1.9 Our decision on the WBA charge control to be applied in Market 1 is as set out in this statement. This statement constitutes our impact assessment.
We are charge controlling BT's 8Mbit/s IPStream Connect product
1.10 We are imposing this charge control on the IPStream Connect 8Mbit/s (Max and Max Premium) product only. It is the maximum downstream speed currently available and the product most used by end users in Market 1. We conclude therefore that charge controlling this product directly protects most consumers in Market 1 and constrains BT from excessive charging on the other products available in Market 1.

I know - wrong way around in what I said...more coffee needed.

I remember the days when the market was simpler and did not need to be an accountant to work out the implications of price changes.

Surely this applies to Market 2 exchanges too? My exchange is marked as Market 2 because Virgin Cable is available to the lucky ones who's houses are a few years old when they last bothered to connect people up.

So isn't it any exchange where the only option via a phone line is BT?

In reply to a post by MrSaffron:

Well if BT doesn't like the price cuts, roll out more WBC and remove the IPStream

Or just pack up and go home. Leave M1 exchanges to mobile and dial-up. There's no USC in place and even the one proposed allowed BT to withdraw from areas it didn't like.

Three years or more notice to withdraw a service in place without a similar spec or better replacement.

In reply to a post by MrSaffron:

Three years or more notice to withdraw a service in place without a similar spec or better replacement.

Ah, thanks I didn't know that. That does make a difference then.

"However, in Market 1 - made up of exchange areas in which BT is currently the only provider of wholesale broadband services - we decided that BT should be subject to a charge control."

So Market 1 only

Great. So we could find that the worst exchange to be on is a Market 2 one because they may not have to lower the charges and wont have the incentive to do upgrades.

Could we see Market 1's changing to 3's fairly rapidly?
Could we see BT encouraging (or paying for!!) one other provider into a Market 1, making it a Market 2 and thus the cost reductions are not imposed and BT sit pretty again?

Or am I just being too cynical again?

I see where you're at - Market 2 exchanges with 2 or 3 principal operators could turn out to be the highest price exchanges where there isn't enough competition and there isn't any price control. They cover 10% of the population, apparently.

Cynical becomes a level headed approach when Ofcom and BT are mentioned together. It�s like seeing the true definition of Love or Profit perhaps both, I can�t decide.

Of course ISP's may just decide to not pass the cut on anway, 60 odd pence a month from a small proportion of customers, versus figuring out managing which market that customer is in.

My person vote is for the money to go on extra capacity

It's not the cut that I'm bothered about (although cheaper broadband is always welcome as long as it's reliable), it's trying to encourage at least one LLU operator into my exchange that I'd like (and any others in the same situation).

Having been on O2 LLU before moving house, I preferred my lower sync speed LLU connection to my (at least double the sync) IP Stream connection. Better upload speed, less disconnects, none of this nonsense speed profile, etc.

Financially, small exchanges are not worth any upgrades to speed up the broadband network, I completely get that and I don't blame anyone (or rather any company) for not wanting to spend a few K on an investment that could take years (if ever) to make a return. It's just very frustrating to see old houses with high speed broadband via cable, LLU/FTTC in bigger exchanges yet new housing estates connected to new(ish) but small exchanges end up with IP Stream.

Hopefully it wont be too many more years before my type of connection is seen as the one to be targeted for upgrades because everyone in the countryside and everyone in the big towns/cities will have FTTC and us stuck in the middle will be the broadband lepers of society.

In reply to a post by MrSaffron:

Well if BT doesn't like the price cuts, roll out more WBC and remove the IPStream

Would that mean that Market 1 would see WBC roll out before markets 2 & 3?