Last year, BT and TalkTalk separately appealed Ofcom’s decision concerning access prices to BT’s superfast broadband network, known as ‘virtual unbundled local access’ (VULA). The Competition and Markets Authority (CMA) has today published its determination on those appeals. The CMA largely upheld Ofcom’s decision, agreeing with only one of BT’s challenges and dismissing the challenges in TalkTalk’s appeal.
BT is currently the largest retail provider of fibre broadband services over its network, and is required to allow other operators to use its network to sell superfast broadband to consumers under the VULA remedy imposed by Ofcom. The appeal concerned the charge control regime, which sets a minimum margin between BT’s retail price and the wholesale price BT is permitted to set for other operators to access its network. The regime aims to prevent margin squeeze between BT’s retail and wholesale prices, thus enabling BT’s downstream rivals to trade profitably in providing retail superfast broadband.
Frontier (Europe) regularly advises parties in relation to price control and margin squeeze issues in the telecommunications sector.
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