This document covers Ofcom’s decisions in two areas:
- the limits on what BT can charge its competitors to use certain parts of its network during 2005-9, so that they can compete with BT in selling narrowband services, such as phone calls, to residential and business customers; and
- the withdrawal of all regulation in one economic market, and its relaxation in another, following Ofcom’s reviews of competition in those markets.
Where BT has a dominant position that makes it hard for other companies to compete, Ofcom can make sure that BT lets its competitors use parts of its network, at a controlled price, using ”network charge controls” (“NCC”s). This protects consumers from the effects of BT’s dominance by promoting competition, bringing more choice, better quality and lower prices.
In this document, Ofcom sets out required cuts in BT wholesale charges on a range of services during the four years to 2009. Over that period, this should save retail customers about £350 to 400 million (relative to letting BT’s prices for these services rise by the rate of inflation), as those cuts get passed on as lower retail prices. The parallel steps that Ofcom is taking in its strategic review of telecommunications should increase retail competition, by causing more of the wholesale savings to be passed on to consumers.