Significant developments have taken place in the wholesale broadband access markets since Ofcom concluded its previous review in May 2004. Between May 2004 and October 2006, the total number of broadband subscribers has increased from c.4 million to c.12 million. At the same time, LLU has developed from a low volume niche product to one that allows Communications Providers to bypass the incumbent’s wholesale offerings and to instead provide their own. Increased competitive pressure, particularly from LLU, has resulted in BT geographically de-averaging its wholesale broadband prices and in providers offering retail prices and products that vary by geography.
Ofcom has attempted to capture these developments in its approach to reviewing the wholesale broadband access market and to propose regulatory remedies that are appropriate to the prevailing market conditions. This consultation document sets this approach out in detail and Ofcom is keen to hear the views of all interested parties. Ofcom has followed the procedure under the regulatory framework of defining markets, assessing competitive conditions and considering remedies in reaching the conclusions set out in this document.