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BT wants Ofcom to stop making it subsidise Sky and Talktalk

Wants a level playing field
Fri Feb 28 2014, 16:14
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BT HAS ASKED Ofcom to let it stop subsidising the price of broadband to Sky and Talktalk.

It said that it wants a level playing field, and complains that the rival companies have had an easy ride for too long.

In a statement John Petter, BT Consumer CEO, reacted to the news that £1bn could be lost through subsidies with a plea to the telecoms regulator.

"Talktalk and Sky have enjoyed subsidies for the best part of a decade but it is time for that to end. Both are successful companies and both are more than capable of standing on their own two feet. It is particularly unfair that BT has to give Sky a commercial leg up when they consistently refuse to provide us with fair access to their own services," he said.

"Ofcom should be given credit for driving competition deeper into the network but that success needs to be reflected in current regulation. We know that Ofcom want to tackle this distortion but we want them to act now given this is a highly dynamic and competitive market. All we are asking for is a level playing field where prices reflect costs and consumers benefit as a result."

BT said that a report from a company called Plum Consulting found that its rivals have already benefited to the tune of around £600m and are closing in on £1bn in unfair subsidies.

Talktalk is unmoved and apparently not threatened by the noise from its rival, and used the opportunity to besmirch BT and flatter the regulator.

"The people who have benefitted from Ofcom's regulation are consumers. What BT are actually calling for is for consumers and businesses to pay more for broadband, and for that money to go straight into BT's pockets," said a Talktalk spokesperson.

"Ofcom should be proud of how their approach to regulation has led to the UK having one of the most competitive markets in the world and they must keep it that way. We urge Ofcom to ignore this self-serving request."

BSkyB has also responded, saying that rather than costing the industry money, firms like it were investing in the broadband network. It added that any regulatory changes should be slow-moving, and reminded anyone who was listening that BT might not offer the best consumer deals.

"We have already invested more than £1bn in our broadband network to create more choice and competition for consumers, and which has helped drive down prices for millions. We've been able to do this thanks to certainty over the regulatory framework against which our investments are made. It's this very principle of regulatory certainly that BT itself argues for when making investments of its own," it said in a statement.

"If regulatory charges are to change, this should happen gradually over time as Ofcom proposes. In any event, we believe that Openreach's customers are currently paying too much based on inappropriate costs being loaded onto its customers, which hits UK consumers in the pocket." µ


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