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Ofcom releases latest Business Connectivity Market Review Consultation

November 8, 2018By Preiskel & Co

Ofcom has released its latest Business Connectivity Market Review Consultation (“BCMR Consultation”), outlining its provisional analysis of the Business Connectivity Market, provisional Significant Market Power (“SMP”) assessment, and proposals for remedies.

Key points to note include a commitment to implementing a consolidated review of residential and business telecoms markets and physical infrastructure by 2021, introducing a more holistic approach to regulation of the market.

The BCMR Consultation proposes two separate product markets for Contemporary Interface (“CI”) Services: CI Access services, and CI inter-exchange connectivity services.

In the CI Access service market, the BCMR Consultation proposes a number of geographic markets: (i) BT Only areas; (ii) BT+1 areas; (iii) the Central London Area; (iv) High Network Reach “Metro Areas” – Birmingham, Bristol, Edinburgh, Glasgow, Leeds, and Manchester; (v) all other High Network Reach areas; and (vi) the Hull Area.

The BCMR Consultation provisionally finds that BT has SMP in each one, except for the Central London Area and the Hull Area. Where BT faces competition from two or more rivals in these markets, the BCMR Consultations proposes not to introduce charge controls or quality of service standards. Where there is no or limited competition, i.e. where BT faces competition from either no operators, or from one operator, the BCMR Consultation proposes that the prices are kept flat and have strict quality of service obligations for all bandwidths.

In the CI Inter-exchange connectivity market, the BCMR Consultation proposes that BT has SMP at those exchanges where it faces competition from fewer than two other operators. In this product market, the BCMR Consultation proposes that BT provides other operators with access to its dark fibre, at cost.

Moreover, the BCMR Consultation proposes to deregulate traditional interface leased line services throughout the UK.

Published simultaneously with the BCMR Consultation, was a new Physical Infrastructure Market Review Consultation (“PIMR Consultation”). This focuses on the infrastructure level of the market, and proposes opening up BT’s ducts and poles to other infrastructure players, with the aim of reducing build costs and thus facilitating and speeding up the roll out of next generation infrastructure.

The BCMR Consultation documents are available here.

The PIMR Consultation documents are available here.

Preiskel & Co acted for CityFibre in an appeal against Ofcom’s 2016 BCMR, alongside BT. In part, our case argued for unrestricted duct and pole access. It also argued for that Ofcom had erred in its geographic market assessment, in particular in respect of Central Business Districts. Following CityFibre’s withdrawal from the market definition aspects of the case, BT picked up some of our points and were successful on them. The result of the judgment in was that Ofcom’s 2016 BCMR was quashed.

Please contact Tim Cowen if you have any questions regarding the BCMR, PIMR, or telecoms regulation more generally.

BCMROfcomRegulationtelecomsTim Cowen
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