Recently we heard about BT and Virgin Media planning to hike their broadband charges, but seems like Ofcom has something else on its mind. Ofcom is currently mulling a proposal to put a cap on rental charges that BT can ask for under Openreach program. If the proposal gets a go ahead, then BT may have to slash the rental charges by as much as 19 percent.
However, it is not the first time Ofcom has intervened in this matter. BT owns a major portion of landlines in the country. Ofcom has intervened twice earlier to keep the rental charges low. But BT is now planning to fight back. A company spokesperson said, “Whilst the prices are within the range outlined by Ofcom in November, we disagree with some of the underlying assumptions that they have used to determine these charge controls. Our primary concern throughout this process is to ensure that we are able to achieve a fair rate of return in order to continue our investment in the future of the UK’s communications infrastructure.”
Ofcom proposal needs to be approved by the European Commission and may force BT to drop its telephone and broadband charges fall by 4.5 percent. The decision is likely to be made by early March.