Market A pricing on FTTC

I have a relative on an exchange with no LLU, and Market A pricing, as confirmed by a price check on Plusnet ADSL.

When doing a price check on fibre, after intro discounts end, Plusnet comes out at £22.49 for unlimited fibre instead of Plusnet's usual £14.99 price - which suggests Market A pricing, inflated like their ADSL offering.

Sky on the other hand comes out at £20 for unlimited fibre, which is their usual price, and is not inflated unlike their Sky Connect ADSL Market A offering.

So my question, does Market A wholesale pricing affect FTTC or not?

Short answer, it looks as if it does, but it isn't justifiable.

Long answer, Openreach WLR3 pricing, which is for the copper phone service, doesn't appear to distinguish between Market Categories.

That suggests to me that the price differential seen on Plusnet's services is coming from BT Wholesale prices for broadband. I.e. that the Ofcom rules are to cause higher broadband costs for its ISPs rather line costs. The idea being, as we all know the categorisation is for, to allow LLU suppliers to compete by placing their kit in the exchange.

In relation to the exchange in question, Sky Connect will be paying the higher BTW price for the ADSL service. On FTTC they will not. Just the normal line rental plus the FTTC cost at the headend exchange direct from Openreach as well.

Plusnet will be paying the higher BTW FTTC rate because of the subscriber exchange's market rating. Madness. I wonder if Plusnet or BT Wholesale have it wrong, and that on FTTC the Market Category should be that of the headend exchange?

Edited by RobertoS (Sat 07-Nov-15 15:04:05)

In reply to a post by RobertoS:

Plusnet will be paying the higher BTW FTTC rate because of the subscriber exchange's market rating. Madness. I wonder if Plusnet or BT Wholesale have it wrong, and that on FTTC the Market Category should be that of the headend exchange?

On Market A exchanges, I don't think Plusnet are paying more for FTTC on a wholesale level than Sky are. I've checked a couple of other WLR3 providers and none of them are inflating the FTTC price based on the exchange being Market A.

I suspect therefore that Plusnet are inflating the FTTC price on a retail level despite them not paying a premium on a wholesale level, in order to make more profit in Market A areas.

Unless the others offer lower ADSLx prices in Market B, as Plusnet do, their FTTC price is irrelevant. It just means they are overcharging for ADSLx. The old fallacy that Plusnet charge a premium in Market A. They don't - they cut the price in Market B where the others don't.

EE can't be used for comparison either, as their pricing is based on what was Orange LLU or not.

Edited by RobertoS (Sat 07-Nov-15 16:38:56)

Isn't Plusnet's propaganda that they offer lower prices in "low cost areas" so that must be exchanges now classed as Market B, not sure if a single LLU provider makes an exchange's classification A or B

In reply to a post by RobertoS:

EE can't be used for comparison either, as their pricing is based on what was Orange LLU or not.

Zen can be used for comparison, since on ADSL they have different pricing for Market A and Market B, their Market A price for unlimited ADSL for instance is an eye-watering £79 per month, vs £49.50 for Market B exchanges (both Office products, Zen have no unlimited Home product for ADSL on Market A exchanges). On VDSL, Zen charge £22.50 for unlimited VDSL on both Market A and Market B exchanges.

So it does look to me like Plusnet are charging a premium on FTTC on Market A exchanges despite there being no increase in wholesale costs.

Edited by Oliver341 (Sat 07-Nov-15 22:24:10)

Looks a bit that way.

In reply to a post by Oliver341:

Zen can be used for comparison, since on ADSL they have different pricing for Market A and Market B, their Market A price for unlimited ADSL for instance is an eye-watering £79 per month, vs £49.50 for Market B exchanges (both Office products, Zen have no unlimited Home product for ADSL on Market A exchanges). On VDSL, Zen charge £22.50 for unlimited VDSL on both Market A and Market B exchanges.

Are you sure that Zen draw a distinction on Market A and Market B? I thought - maybe wrongly - that Zen charge higher ADSL prices on 20CN only exchanges, reflecting the higher backhaul costs. If Zen have a PoP or WBC is available (which is always the case for FTTx), there is no premium.

I think you've picked up on something important in the discussion David, in that we can't be sure if Oliver is referring to 20CN ADSL or 21CN WBC ADSLx.

Plusnet charge extra even when WBC is present on Market A exchanges. I think you are right that Zen charge extra when WBC is absent, and I believe that is the case even if LLU is available. (Their own backhaul provision isn't full LLU. I don't know if they have it at any non-WBC exchanges).

Zen is different in that it is using its own backhaul network for WBC data where ever possible, which can undercut WBC backhaul pricing.

Thanks Andrew.

What I've never got anyone to answer is how they connect at the exchange, as they don't have their own MSAN. Standard LLU ISPs do. The samknows listing doesn't distinguish.

This is the ADSL package EE have for my connection (EO) to the 20CN exchange:-


http://s8.postimg.org/9y0qgqk8l/EE_package_via_20_CN...


A non starter compared to what I now pay Plusnet.

Edited by Apprentice (Mon 09-Nov-15 10:29:04)

In reply to a post by RobertoS:

I think you've picked up on something important in the discussion David, in that we can't be sure if Oliver is referring to 20CN ADSL or 21CN WBC ADSLx.

It's an IPstream Connect (20CN) exchange, Market A with no LLU.

In reply to a post by David_W:

Are you sure that Zen draw a distinction on Market A and Market B? I thought - maybe wrongly - that Zen charge higher ADSL prices on 20CN only exchanges, reflecting the higher backhaul costs.

It's very common for Market A exchanges to be IPstream Connect/20CN only, since it's the arrival of LLU which usually spurs BT on to install WBC.

But the arrival of WBC for whatever reason does not result in the exchange being regraded. Plusnet still charge the higher price, as I said earlier. Zen would presumably go to the lower price on transferring their customers to WBC.

In reply to a post by RobertoS:

But the arrival of WBC for whatever reason does not result in the exchange being regraded. Plusnet still charge the higher price, as I said earlier. Zen would presumably go to the lower price on transferring their customers to WBC.

All of which is getting a bit off topic. Plusnet, Zen and other WLR3 providers charge a higher price for ADSL on some exchanges either

a) because the exchange is Market A and wholesale charges are higher, or
b) because WBC is not present at the exchange resulting n higher backhaul charges

Or both. As I say in the case of this exchange, it is both Market A and IPSC, so whether it's because of a) or b) doesn't really matter.

But the purpose of this thread is to ask why, on this particular exchange (and I'm sure all others matching its criteria), Plusnet have split level pricing on FTTC whereas other providers do not, and to determine if indeed there is a wholesale reason as to whether FTTC costs are higher on these exchanges, or whether it is purely a business decision on Plusnet's part to make more profit from FTTC connections on Market A/IPSC exchanges.

I answered that .

The subsequent protracted discussion came about because you cited Zen in reply, which works to entirely different criteria. Also "Zen can be used for comparison, since on ADSL they have different pricing for Market A and Market B, their Market A price for unlimited ADSL for instance is an eye-watering £79 per month" simply isn't true. An exchange can be Market B without WBC and Zen will charge the higher ADSL price.

Prior to that, the only clue to it being IPSC rather than WBC was the "ADSL" you referred to. As many people on these forums fail to distinguish ADSL from ADSL2 or 2+ when comparing with FTTC I thought it best to query which you meant. Wisely as it turns out.

I agree with you long ago that it seems to be Plusnet getting it wrong, not BT Wholesale. What's the problem?

In reply to a post by RobertoS:

I agree with you long ago that it seems to be Plusnet getting it wrong, not BT Wholesale.

Fair enough. It just seemed like the examples I provided of ISPs with split-level pricing for ADSL but not for VDSL, i.e. Sky and Zen, were being dismissed as poor examples of the issue I was trying to highlight. If the additional information I have supplied shows that Zen is a valid example then I suppose all is sorted.

I'm still not clear what you are trying to demonstrate with Zen.

Zen use their own backhaul network if they can, and BT Wholesale if there is no Zen network presence. If Zen have to use BT Wholesale, they use 21CN WBMC if available - and in that case, they charge the same prices they charge customers served by the Zen network. Zen charge higher prices if they are forced to use IPSC, as their backhaul costs are higher on that network.

In practice, BT Wholesale offer 21CN WBC / WBMC from all Openreach GEA-FTTx handover nodes. (I'm not sure there's a formal guarantee of this, but I don't recall anyone mentioning Openreach GEA-FTTx being available to them but service is not available from ISPs using BT Wholesale 21CN). This means Zen's FTTx pricing is the same for everyone within the Openreach coverage footprint.


Zen don't price based on Market A / Market B designations. If BT Wholesale upgrade their offering at a Market A exchange to 21CN WBC / WBMC, it would remain Market A if reclassified and no other operator has presence (though, in practice, Ofcom designations are based on a snapshot in time). Nevertheless, the cheaper Zen ADSL products would become available to those who are newly within the 21CN WBC / WBMC footprint.


In other words, Zen pricing depends on the backhaul network, not the Ofcom Market designation.

In reply to a post by David_W:

I'm still not clear what you are trying to demonstrate with Zen.

The reason Zen charge more for ADSL on exchange X is not relevant here, suffice to say that they do, and so does Plusnet.

It's a straight price comparison between Zen vs Plusnet, exchange X vs exchange Y, ADSL vs VDSL. The comparison leads me to believe Plusnet charge more for VDSL on exchange X than they do on exchange Y despite there being no justification in terms of increased wholesale costs.

Edited by Oliver341 (Tue 10-Nov-15 13:49:11)

You still miss the point, or are wriggling to justify something you said that is completely incorrect.

Both Zen and Plusnet have two charging structures. The Plusnet one is based on Market A or Market B. The Zen one is based on the presence or absence of WBC.

There is no direct relationship between Market A/B classification and WBC/not-WBC.

Market A can have WBC, so Plusnet would be high but Zen low. Market B can fail to have WBC, so Plusnet would be low but Zen high. Comparing the ADSL prices as you did at the beginning is therefore invalid.

That fact that Plusnet charge a premium for FTTC in Market A appears to be not driven by BT Wholesale pricing, as Zen and probably most or all others do not charge such a premium. But the whole question of that has absolutely nothing to do with Zen's differential pricing structure for "up to 8Mbps" ADSL.

In reply to a post by Oliver341:

Zen can be used for comparison, since on ADSL they have different pricing for Market A and Market B ....

That is simply not the case. It is wrong; it is incorrect; it is untrue; it is a dead parrot.

Edited by RobertoS (Tue 10-Nov-15 14:04:06)

In reply to a post by RobertoS:

Market A can have WBC, so Plusnet would be high but Zen low. Market B can fail to have WBC, so Plusnet would be low but Zen high. Comparing the ADSL prices as you did at the beginning is therefore invalid.

It's perfectly valid because the exchange in question is both Market A and IPSC, so it satisfies both criteria. So maybe Zen charge more because it's IPSC and Plusnet charge more because it's Market A. The key point here is that they both charge more for ADSL.

Then we look at the next exchange, Market B and WBC, again satisfying both criteria, but this time Zen do not charge more for VDSL and Plusnet do. So by the reasoning given in this thread, Zen charge less here because FTTC can use WBC at the head-end exchange. Plusnet also have this, and in addition it's Market B, i.e. no justification for the increased price.

Or do you just want to beat me over the head with the fact that I said that Zen charge more on Market A for the sake of it, even though the exchange is also IPSC so both criteria for pricing differentials were satisfied here and it makes no difference to my original point on Pluset's pricing structure? If so, that's a bit petty.

Edited by Oliver341 (Tue 10-Nov-15 14:21:18)

And yes, I do tend to assume IPSC where Market A is concerned because the exchanges around here are all like that. In hindsight I should have added IPSC into the discussion earlier, but as I say the exchange is both Market A and IPSC.

I'm not sure Plusnet have actually implemented Market A/B. Do you happen to know?

The reasons I ask are that if they haven't, they may still be applying Market 1 rates, and if they have the question arises as to whether or not they have revised the price for existing customers at such exchanges.

All depends on the contract they have signed with BT Wholesale, which can have volume discounts applied and there may be nuances that are not obvious.

I'd forgotten that aspect, but yes. They clearly had something like that under the 1/2/3 scheme, as it started at cheaper on Market 3 then changed to 2 and 3.

But they are charging a £7.50pm premium for FTTC outside "low cost" areas, which doesn't sound right.

Edited by RobertoS (Tue 10-Nov-15 17:15:19)

In reply to a post by RobertoS:

I'm not sure Plusnet have actually implemented Market A/B. Do you happen to know?

Certainly the exchange which has never had LLU or WBC is either Market 1 under the old classification or Market A under the new one, and Plusnet price it higher than Market 3/Market B. Whether Plusnet are using Market 1/2/3 rules or Market A/B rules I don't know, but they are using one of them, or maybe like Zen it is based on WBC availability.

I've never actually checked out an exchange with WBC and no LLU but if someone knows of one I'd be interested since I'd like to compare the Zen pricing on it to the Plusnet pricing. Does anyone know of one?

Just to throw my 2p in.

I'm on Plusnet FTTC paying 7.50 month premium. My exchange is Market A, was 1.
In the last month or so, ADSL2 has become available so I assume its been WBC enabled.

I have previously posted on here asking why the plusnet non low cost area premium is due on FTTC connections, when there doesn't appear to be an increased cost to plusnet.

My understanding/assumption was that since my exchange didnt (when i got fttc) have WBC the fibre cabinet was being fed from another exchange in the area (which was WBC / unbundled / market B). This makes the price premium even more disappointing.

Its soon my time to renegotiate or move.

I really don't get plusnets pricing, the whole 40/20 (Which I'm on) was a ridiculous idea imho and demonstrates the price charged doesn't relate to costs incurred.

The only reason I can think of is that selling fibre at £22.49 to a Market A customer who is currently paying £17.99 (I think?) for ADSL is a reasonable increment for the improved service. Were they to learn that they should be paying £14.99 they might be reasonably unhappy, but chances are they will never know this and so the upsell to fibre becomes possible at the inflated price.

By the way can you mention or PM me the name of your exchange please? I'm interested to do a price comparison on WBC enabled exchange which has never had LLU.

In reply to a post by Oliver341:

By the way can you mention or PM me the name of your exchange please? I'm interested to do a price comparison on WBC enabled exchange which has never had LLU.

Actually no need now, just found one.

Interestingly this particular exchange has WBC, but Zen are charging their higher price on it. So it does not look like Zen's lower prices are solely dependent on WBC availability.

http://i.imgur.com/QSinM9c.png

http://i.imgur.com/eErTUK0.png

I am with zen and i was only made aware of the difference after i had agreed to forgo my cheap £11.00 line rental in favour of a cheaper overall cost to upgrade to adsl2 when it was made available in august this year.

I was told initially it would be £17.00 L/R + £13.33 totally unlimited B/B.
The e-mail i got quoting what i had ordered was very different.
£16.99 L/R + £48.00 for the same allowance i had previously (500gb).

So i went from £34.78 to £64.99 for the same service albeit faster.
Our exchange is WWCHLL in devon and the dsl checker says we are now connected to cabinet 1 as we were exchange only lines so i know we will have fibre soon, It will be interesting to see what price i am offered then.

BT can set whatever price they like for WBC ADSL, albeit on Market A exchanges the price they can charge is capped by Ofcom. Until competition arrives at these exchanges I don't think BT will offer ISPs a lower price on a wholesale level, and this is what in turn leads to the higher pricing with Zen and others at these exchanges despite WBC being available.

Edited by Oliver341 (Tue 10-Nov-15 21:48:47)

Unless the A/B system has changed in one important respect from the 1/2/3 system, which as far as I remember it hasn't, the subsequent arrival of LLU kit at a Market A exchange does not change its classification. As such, any minimum price requirements imposed on BTW by Ofcom do not change.

BT Wholesale will not be able to offer lower prices if competition arrives. Only with WBC can they do that, and even that will be subject to the Ofcom minimum price.

Are you sure Ofcom impose a fixed price as opposed to a charge cap?

Because there are exchanges classified Market A, but with WBC-based providers selling products at their lower prices. If the WBC wholesale prices are fixed high by Ofcom at these exchanges then I can't see how the retail providers could afford to offer their lower cost products.

Ofcom's site specifically mentions excessive pricing, indicating the charge control is a price cap and not a fix, but I am unsure of the exact details.

In reference to stakeholders.ofcom.org.uk/consultations/review-wba-markets/summary:

1.22 We also propose that BT's services in Market A should be subject to a price control in order to ensure that BT does not set excessive prices for wholesale broadband services which would ultimately be passed on to consumers.