BT Told to Keep Prices up and Profits Down to Create Competition

By Gary Cutlack on at

Regulator Ofcom is moving to create new rules restricting how BT manages its broadband division, demanding it maintains a wide margin between the prices it charges us for broadband and what it charges rivals to resell internet access.

ISP rivals like TalkTalk and BSkyB aren't happy that BT's potentially able to undercut them on price, by charging them high wholesale access costs to use its network. These restrictions would change that, putting in a "regulatory condition" that would require BT to sell its broadband at a price that allows its reselling competitors to make a profit too.

Worryingly for BT, Ofcom says it will now take into account the costs and revenues that come from its BT Sport operations when calculating broadband wholesale price margin levels, suggesting that if it starts making too much money from selling football it may be forced to abandon its sporting ambitions altogether. [Ofcom via Guardian]