A widespread reduction in the cost of broadband may be on the way, after Ofcom proposed that BT substantially reduces the cost of its leased lines.
As part of a review of the market, the telecoms regulator has suggested "significant real-term price reductions" for anyone that purchases buy BT’s high-speed wholesale leased line links.
The links are an integral part of the country's broadband network and are used by the likes of broadband providers, mobile operators, businesses and public sector organisations.
After last month noting that BT has 'significant market power' in a number of wholesale leased line markets, and claiming that 'charge controls' could protect buyers of such products, the regulator has now consulted on the level of those controls.
The introduction of such controls could lead to significant real-term price reductions for the majority of leased line customers. which can then be passed on to customers.
In addition to the proposals, Ofcom last month proposed that companies providing leased lines should be granted access to BT's networks through the so-called 'dark fibre' process.
This would involve BT giving competitors physical access to its fibre-optic cables, allowing them to take direct control of the connection, with pricing based on BT's existing 1Gb service.
The price controls have been linked to inflation based on the Consumer Price Index (CPI), in a bid to incentivise BT to make efficiency gains, with its traditional interface services with bandwidths up to and including 8Mb having an overall basket cap of CPI - 12.25%.
Meanwhile, for BT's Ethernet services with bandwidths up to and including 1Gb, the regulator proposes an overall basket cap of around CPI - 13.75%. Such wide-ranging changes will take time as well as numerous consultations, however, and as such Ofcom expects to publish its final decisions in the first quarter of 2016, taking effect from April 1st next year.