Altnet trade body slams regulator for spiking UK broadband prices

A report from UK independent broadband provider trade body Independent Networks Cooperative Association (INCA) has claimed the country’s leading broadband provider, BT, is charging customers up to 29% more per month for the same broadband product in areas without infrastructure competition, and condemns UK comms regulator Ofcom for putting the market at risk by implementing regulation that assists BT.

INCA was established in 2010 as a co-operative trade association for next-generation broadband services with the aim of creating new digital infrastructure in the UK and Ireland. It said its report, Securing long-term benefits for broadband customers, shows how much the incumbent drops its prices when there are competing networks in an area, and that regulatory “inaction” harms new infrastructure builders such as the alternative network providers (altnets) it represents – especially in rural areas.

Fundamentally, INCA noted that UK government policy to encourage broadband infrastructure competition has transformed the UK from a full-fibre laggard into having the fastest full-fibre network growth in the world. It added that these plans were also delivering clear benefits to consumers in the form of lower prices, better service and greater reliability.

Yet INCA said failure to regulate the market in a way that supports infrastructure competition risks the UK’s reputation as a destination for inward private infrastructure investment. “No regulatory intervention can replicate the impact of real competition, and this has been proven in recent years in UK telecoms,” said INCA chairman Tim Stranack.

“The government adopted the right policy, the market responded with enthusiasm and INCA’s research shows that consumers are already benefiting from lower prices and better services – where competition exists,” he said. “The differences between government policy statements and Ofcom actions are putting these benefits, to businesses and consumers, at risk.”

The report recommends that BT group be split with the physical infrastructure business (its duct and pole company) being sold off into a separate organisation without common ownership with BT. This, said INCA, would reverse the current situation where BT, as the largest retail broadband ISP in the country, has publicly stated it will never use another network provider other than BT broadband division Openreach.

Furthermore, INCA insisted that by adopting a number of key recommendations, the UK government could provide a critical boost to investor confidence that should lead to more than 85% of UK properties having access to full-fibre broadband by the end of 2025, potentially exceeding the government’s coverage ambitions.

Namely, it urges the UK government to ensure the regulator delivers against government policy and acts in the interest of consumers by: improving the transparency of Ofcom’s decision-making and showing how each decision delivers against policy objectives; clearing up consumer confusion over the use of the term “fibre”, incentivising large national internet service providers to use altnet networks; and structural reorganisation of Ofcom to ensure prioritisation of telecoms and broadband as a key organisational responsibility.

“INCA considers the continued integration of the physical infrastructure parts of Openreach with the remainder of Openreach, and with the remainder of BT Group, to be the underlying cause of many of the issues identified in this report,” said chief executive Malcolm Corbett.

“Enough time has been allowed for functional and legal separation to deliver, and both have failed,” he said. “It is therefore time for a full structural separation of the passive infrastructure components of Openreach from the remainder of the group.”