Has Ofcom done enough to ensure broadband competition? (City A.M.)

CPS head of economic research Daniel Mahoney wrote for City A.M.’s debate section, answering the question “BT Openreach ruling: Has Ofcom done enough to ensure broadband competition?”, Friday 26 February 2016. 

“Ofcom has rightly drawn attention to the anti-competitive nature of the UK broadband infrastructure market, but it should have done more. The current set-up gives BT Openreach an incentive to make broadband infrastructure decisions in the interests of BT, rather than other companies using Openreach’s infrastructure. And Ofcom has, like so many regulators, chosen to duck the main issue: should BT Openreach, as a quasi-monopoly owner of the essential infrastructure used by its competitors, be separated from BT (which through BT and EE competes directly with other broadband providers)? An analogous situation would be if Eddie Stobart owned UK motorways, which it then charged its competitors to use. The regulator must now set clear milestones so that, if greater competitiveness does not emerge within the next 18 months, structural separation becomes the default option – not least as BT and other service providers have argued that the current uncertainty could be bad for investment decisions.”

To read the full debate, visit the City A.M. website.

Date Added: Monday 29th February 2016