Following a first consultation initiated in May 2004, the UK regulatory authority Ofcom has today published its final proposals resulting from its "Review of the Wholesale Local Access Market".

The market concerned corresponds partially to Market 11 of the European Commission's Recommendation on Relevant Markets Susceptible to Ex-Ante Regulation, i.e. "wholesale unbundled access (including shared access) to metallic loops and sub-loops for the purpose of providing broadband and voice services" but Ofcom includes not only the PSTN loops but also the metallic networks of Cable-TV operators.

In tems of geography, Ofcom distinguishes the territory of Kingston-upon-Hull (where there is a separate fixed incumbent operator) from the remainder of UK, but notes that: "the broad UK geographic market is characterised, to some extent, by local characteristics including some variation in the degrees of competitive pressure."

As regards the designation of Significant Market Power (SMP), Ofcom’s preliminary conclusion is that BT holds a position of SMP in the wholesale local access market for the UK excluding the Hull Area, and that Kingston supplies around 100% of the relevant local access connections within the Hull Area, and therefore has SMP.

From page 48 of the (205 page) consultation document, Ofcom outlines the proposed regulatory obligations on the SMP operators. In essence, these obligations all concern local loop unbundling and related facilities, and in extreme summary they are as follows.

Regulatory obligations proposed to apply to BT:

  • requirement to provide Network Access on reasonable request
  • requirement not to unduly discriminate
  • basis of charges (i.e. cost orientation)
  • requirement to publish a reference offer
  • requirement to notify charges and terms and conditions
  • requirement to notify technical information
  • quality of service
  • requests for new Network Access

Ofcom also puts forward new proposed wholesale charges for BT's local loops, as follows:

  • connection shared access: £37.03
  • monthly rental shared access: £1.053
  • connection ULL: £50.70 for transfer, £192.64 for new loop
  • monthly rental ULL: £8.75 until review in Spring 2005

Wholesale charges for co-location and co-mingling are not put forward (there are proposals for tie-cables etc.), but Ofcom proposes to impose regulatory financial reporting obligations on BT in the wholesale local access market and in respect of co-location in the UK excluding the Hull Area.

The full text of the Ofcom consultation document can be accessed by clicking here.

The deadline for responding to the consultation is 8 Oct 2004.

T-REGS Note: Also today, Ofcom published its Direction Setting the Margin between IPStream and ATM interconnection Prices. For a discussion, please contact Yves Blondeel.