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BT has gained an important ally in its fight to retain control over pricing for its wholesale broadband network.

The European Commission has urged Ofcom to redesign proposals geared at preventing 'margin squeeze' and protecting BT's wholesale customers.

Back in January, the communications regulator published draft rules relating to wholesale costs, and the prices BT can charge rivals such as Sky and TalkTalk for accessing its broadband infrastructure.

Ofcom proposed that BT Sport should be considered part of its wholesale costs, because the service provider does not charge customers for access separately.

However, the European Commission said Ofcom’s approach "lacks the necessary flexibility, in particular with regards to the treatment of costs for BT Sport".

The Commission added that the draft rules could lead to BT increasing retail prices or reducing costs for BT Sport, in order to maintain levels of profitability.

Ofcom has agreed to consider the comments, which come after BT agreed to pay £960 million for three years' worth of Premier League TV rights from 2016-17.

This is almost a third more than the operator pays under the current television deal.

The commission believes BT should be able to recoup the costs of BT Sport over a longer period of time than the five years proposed by Ofcom.

It said this is particularly important given "uncertainties relating to scale and costs of future auctions".

A spokesperson for BT welcomed the European Commission's comments on wholesale pricing.

"The view that BT should be allowed to recover its sports costs over a longer period needs to be addressed by Ofcom," the representative stated.

"We expect the proposed test will now be amended accordingly."

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