Ofcom made a slew of announce-ments last week in its ongoing attempt to put further regulations on BT's market dominance.
Ofcom introduced new checks to BT's bundled business services deals, ruled that it must continue to reveal its prices for the deals, and that it must examine the pricing of its IPStream and DataStream products, which are key to Digital Subscriber Line and Local Loop Unbundling.
Ofcom said BT had significant market power (SMP) in certain areas of the market, and must be regulated. BT had asked to be allowed to keep the information on bundled pricing confidential, but after consultation, the regulator decided BT had too much power in the market.
"This is a positive outcome. The pricing visibility remains for 'bundled deals' in areas where BT has SMP," said Nathan Francis, general manager for products and commercial at Tiscali UK. "
In addition, there are now two further checks on such bundled deals: a net revenue test, which ensures BT cannot act in an anti-competitive manner by bundling, and an implicit price-cost test.
This, in turn, sees that BT cannot sell an additional product in an area where it doesn't have SMP as part of a bundle at below cost."
Stephen Carter, chief executive of Ofcom, said last month that he wants to reduce the migration charge to users switching from IPStream to DataStream from £50 to £11 per user, and welcomed BT's decision to reduce the charge unilaterally.
Richard Sweet, head of regulation at Thus, is positive about Ofcom's ruling. "This is about relative pricing on DataStream and IPStream," he said.
"BT will have to satisfy an array of tests. It could lower the price of DataStream or increase the price of IPStream, but it's up to BT to decide what to change. It can pull different levers, but the result is DataStream will be more attractive than IPStream."
Stephen North, director at InPurple, which uses the bare bones of DataStream to offer tailored WAN connections, said: "If DataStream is crude oil, IPStream is more like petrol; it's a finished product.
"We take DataStream and refine it ourselves, but most service providers wouldn't find it economical to go for DataStream.
"If I could get DataStream - an uncontended connection - at the price of IPStream, a contended service, the world would be a whole lot fluffier for InPurple."
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