UK communications regulator Ofcom has issued a decision not to prevent Openreach from launching its new pricing for full-fibre broadband, known as 'Equinox 2'.
The plans, originally proposed in December, aim to reduce the price of full-fibre products for internet service provider (ISP) customers, as well as the cost of migrating customers away from copper. The consultation on Equinox 2 closed on March 4, and Ofcom planned to announce its final decision by the end of March. But it said at the time that it had received "a number of detailed and extensive responses to the consultation, some of which raise issues that require further evaluation. In order to properly assess these issues, we intend to gather and analyze some additional information."
The regulator now says in a statement that "having carefully assessed the range of evidence available to us - including the responses to our public consultation - we have decided not to block the launch of Equinox 2. " It went on to say that Openreach must notify Ofcom of certain proposals before they come into force in order to assess them before they are introduced and allow intervention if necessary to prevent them being introduced.
Ofcom said it had taken into account the impact on citizens and consumers, alternative networks, internet service providers (ISPs) and Openreach itself in making its decision. An Ofcom spokesperson said: "Our primary objective is to bring better broadband to the people of the UK by promoting competitive investment in high speed networks and ensuring a level playing field for all companies. With this in mind, and based on the evidence available to us, we do not believe that Openreach's new pricing discounts are anti-competitive."
The regulator went on to reveal that it had considered the price levels under Equinox 2 and the concerns of some market participants about Openreach's approach to discussing and developing discounts with retail providers. However, it said that after carefully evaluating information from suppliers and alternative networks, it currently has no concerns that warrant further investigation. More importantly, Openreach informed Ofcom that, in response to the concerns raised, it plans to make certain commitments regarding its future conduct, including that it does not currently have any plans to change its Equinox 2 lease prices and has no intention of initiating further changes until at least 31 March 2026.
Responding to the announcement, Malcolm Corbett, chief executive of the Independent Network Co-operative Association (INCA), said: "While we are still fully reviewing Ofcom's statement, INCA is initially disappointed with Ofcom's decision. Not only do we believe that this outcome will have a negative impact on competition and investment and ultimately on consumers, we also believe that Ofcom's approach to this decision is flawed. This initially appears to be an illogical decision based on a flawed process. Government policy and regulatory decisions in relation to infrastructure competition appear to us to be out of sync. We call on the Government to clarify its statement of strategic priorities to Ofcom to ensure that the regulator is forced to place infrastructure competition and investment issues at the heart of its decision-making process."
Greg Mesch, chief executive of independent operator CityFibre, also issued a response, saying, "We are disappointed that Equinox 2 has been approved and will conduct a thorough review of Ofcom's decision. However, we are pleased to see that Ofcom's pressure has led to the end of Equinox and Openreach's commitment not to make further changes to its wholesale prices until April 2026. We must not forget that in introducing price discounts to discipline its wholesale customers while harming emerging competition, BT has simultaneously increased prices significantly for its millions of retail consumers. If consumers are to benefit, Ofcom must ensure that competition is effective and sustainable."
