The Independent Networks Co-operative Association, which represents UK alternative broadband ISP networks, has today warned Ofcom that “more than £25bn worth of investment” to improve the UK’s digital infrastructure “will be directly threatened” if Openreach is allowed to introduce new FTTP wholesale price discounts (Equinox 2).
Just to recap. Openreach are set to introduce a new round of wholesale discounts on their full fibre broadband products from April 2023 (here). The move is intended to help their ISPs stay competitive with newer alternative networks (Summary of UK Full Fibre Builds) and further reduce the price of related packages, which will in turn boost take-up by consumers and aid the move away from copper lines.
As we’ve previously said, the discounts under Equinox 2 are not as dramatic as Equinox 1, with smaller changes to rentals and some reductions in connection charges. Nevertheless, more than a few AltNets view the move as being anticompetitive (here), with CityFibre even going so far as to lodge a Competition Act complaint with the Competition and Markets Authority (CMA) and Ofcom (here).
Openreach’s smaller rivals carry a lot of risk due to being in the earliest stages of investment and build, but many of which have previously enjoyed a market where the operator was traditionally much more expensive. This made it easier for them to grow take-up, attract investment and gain support from ISPs to join alternative wholesale options. But at the same time, they fear that Openreach’s response (more discounts) may be putting all of that at risk.
However, last month saw Ofcom take the “provisional” position not to intervene (here), which the regulator said was because Openreach’s offer is “not anti-competitive and is consistent with the rules we consulted on before introducing them under our market review in 2021.” INCA has now responded to the related consultation and their reaction is much the same as it was last December (here).