ISPs bemoan BT superfast infrastructure pricing

BT defends its superfast broadband infrastructure prices, after competitors complain to the UK Government.

BT

ISPs including Virgin Media and TalkTalk have sent an open letter to communications minister Ed Vaizey to complain about the cost of BT's superfast broadband infrastructure.

In the letter, ISPs claimed BT charged competitors too much to use its ducts and poles, to the extent it threatens the rollout of superfast services to rural areas.

The letter, dated 4 April, said "urgent intervention" was needed if the Government's 530 million Broadband Delivery UK (BDUK) project was to succeed.

BT's pricing also threatened "vigorous competition" in the superfast market, the ISPs claimed.

"We have prepared a body of evidence that demonstrates categorically that BT are charging between four to five times their underlying costs for PIA [physical infrastructure access]," the letter said.

"Moreover we have shown that it would be more cost effective to build an entirely separate duct and pole network in parallel with BT's existing network, than to consume the PIA product."

The letter suggested BT may not be "satisfying its regulatory obligation to provide access to its physical infrastructure estate on fair and reasonable terms."

ISP wars

"The current PIA prices are substantially above cost," a TalkTalk spokesperson told IT PRO.

"This means that other operators cannot compete against BT to build fibre networks using BDUK money so BT will become the only game in town."

The TalkTalk spokesperson described the pricing as "a crude tactic by BT to be the monopoly supplier" for bringing superfast broadband to the final third of the UK.

"Whilst BT shareholders may profit, UK consumers will get worse services, the public purse won't get value for money and rollout will be slower and less extensive," the spokesperson added.

"Ofcom and Government need to crack down on this behaviour quickly and decisively."

Virgin Media declined to comment on the letter.

BT hit back at its rivals, questioning their commitment to the UK's broadband rollout.

"It is highly ironic that we are being criticised by some companies who provide little or no wholesale access to their assets," a BT spokesperson said.

"BT is the only company who has installed broadband equipment in exchanges serving the last 10 per cent of the UK and so we would question whether these companies are genuinely interested in serving rural Britain given their track record."

The telecoms giant said its prices for duct access compared "very well with European averages," whilst claiming its plans for pole access have been held up due to others delaying trials.

"Once those trials are underway we will be in a far better position to understand the costs involved and so we would encourage these companies to start trialling with us as soon as possible," the BT spokesperson added.

"It is very disappointing that this letter was shared with the media several hours before ourselves. It's a shame that some of the companies involved seem keener to spend more time talking about this process than actually working on it."

Last week, Ofcom proposed enforcing cuts to BT Openreach's unbundling prices, providing further evidence the UK comms firm is under pressure to lower costs for other providers.

The letter came after BT announced an extension of its 20Mbps copper broadband, pledging to bring the services to 80 per cent of UK businesses and homes.

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