BT has Significant Market Power in the retail markets which include exchange line services, inland calls and low bandwidth leased lines. In these markets BT is obliged, amongst other things, to offer services at standard published prices, terms and conditions, and is prohibited from unduly discriminating.
For some time, Ofcom has faced pressure from business users, as well as from BT itself, to allow BT to respond to the demands of individual business customers by offering unpublished bespoke prices for services in business retail markets where BT still enjoys SMP. Ofcom has also been concerned that the requirement to adhere to standard published prices may be muting competition by facilitating price following by BT’s competitors. Regulation of wholesale markets is intended to facilitate the development of competition in downstream retail markets, by enabling competitors to use BT wholesale services to compete with BT in those retail markets, fairly and on level terms.
On 7 September 2005, Ofcom published a consultation document, Regulation of Business Retail Markets, which invited comments on what form regulation of BT’s retail business exchange line services and business inland call services should take when these are deemed to be replicable by BT’s competitors. Stakeholders were invited to respond to this proposition by 16 November 2005.
Having considered the 14 responses received, Ofcom has concluded an appropriate and proportionate proposition, which should be given legal effect when the relevant services are considered replicable.