Ofcom Plans Superfast Broadband Changes

Ofcom Plans Superfast Broadband Changes
Regulators have proposed new measures they say could lead to better deals for superfast broadband customers.

Ofcom is proposing to cut the costs paid by broadband providers when switching customers, and shorten the minimum length of contracts. It said it hoped the changes would promote competition among providers, who would then pass the savings on to customers.

Currently around 13% of broadband connections in the UK are superfast. Superfast connections are usually made through fibre-optic cables, providing speeds that are more than double the average for the UK.

In a recent report Ofcom said upgrading from slower connections was becoming cheaper, and is becoming increasingly popular among customers. But the regulator said switching between one superfast provider and another remained expensive.

Currently, providers who use BT’s superfast Openreach network must pay BT £50 if they want to switch a customer on to their service.  Ofcom said this charge is frequently passed on to the consumer.

BT said in a statement it welcomed the plan: “We are pleased that Ofcom is maintaining pricing freedom for Openreach’s fibre products. “BT has already accepted a long payback period for its fibre deployment and its wholesale fibre prices – which are amongst the lowest in Europe – reflect this”.

The new provider is also committed to paying BT to use the network for one year.

Ofcom is also proposing to cut the cost of switching to between £10 and £15, and reduce the minimum contract length to one month. It said the measures were designed to ensure that BT’s charges for access to its fibre network are “fair and reasonable”.

Marie-Louise Abretti, broadband expert at uSwitch.com, the price comparison and switching service, said she hoped price cuts would be passed on to households: “Targeting the market at wholesale level – offering monetary savings to broadband providers that are switching people – means it’ll be up to ISPs [internet service providers] to make sure that cost savings are passed on to their customers. “And with providers potentially saving up to £40 per customer, per switch, Ofcom must ensure this happens. We’d hope this move will see often hefty set-up fees scrapped, or at least reduced.”