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Ofcom is set to tighten regulations on how BT shares its high-end fibre lines, as part of its Business Connectivity Market Review published today, but the telecoms giant isn’t happy.

The review proposes to maintain and extend some of the existing regulation on BT, the major provider of wholesale services, but decrease it in London due to the increased amount of competition in the capital.

The regulatory authority said its proposals were necessary to meet growing demand for fast data services from businesses and consumers, and due to the number of changes which have occurred in the market since the last review in 2008.

BT told TechWeekEurope it was “disappointed” by some of the proposals, but welcomed the recognition of increased competition in London.

London competition

Ofcom said the combined measures were designed to sustain competition and ensure the UK had a number of high speed business networks capable of supporting services such as superfast broadband.

For products with speeds of up to and included 1Gbps, Ofcom is proposing to maintain existing regulation, including charge controls and the requirement of BT to provide access on a strictly non-discriminatory basis. Outside of London, Ofcom is proposing to regulate wholesale leased line services above 1Gbps as BT is expected to have “significant market power” in this relatively new market in all parts of the UK except for London and Hull, which is served by Kcom.

However, there will be a less strict form of price regulation on BT wholesale Ethernet prices for services of up to 1Gbps in London, due to greater competition. Ofcom said London benefits from a “substantial, competitive fibre infrastructure” in a wider geographic area than previously thought, meaning it will propose significantly extending the deregulated area for legacy high speed networks westward towards Heathrow.

“From an initial read of the document, we are disappointed that Ofcom has found that BT has market power in the highly competitive high bandwidth market and still intend to regulate declining legacy retail services,” a BT spokesman. “However, we welcome Ofcom’s intention to simplify and add certainty to pricing remedies in business connectivity, as well as their greater recognition of competition in London. We will continue to engage with Ofcom and other stakeholders throughout this consultation process.”

Ofcom will now launch a new consultation, which will close on 24 August and will outline the prices BT can charge for these products soon.

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