BT avoids probe on broadband prices

THE war over broadband prices took a fresh turn yesterday as BT avoided being subjected to a full-blown competition probe over its charges.

TalkTalk previously complained to telecoms regulator Ofcom about the prices BT charges rivals to use its superfast internet network.

TalkTalk claimed that BT was charging competitors too much and using the money to cross subsidise its sports channels, which it offers free to broadband customers.

While Ofcom yesterday rejected this assertion – a move that sent BT shares surging – it added that the group must allow ‘rival operators to compete and make a profit’.

An Ofcom spokesman said yesterday that ‘competition could be dampened’ if BT was able to skew the price so that competitors couldn’t make a return.

It warned that BT could ‘acquire a significant share of superfast broadband subscribers’ by abusing its prices, and that this would ‘weaken retail competition, to the detriment of consumers’.

BT spent £2bn buying sports rights for its new channels, and will fork out a further £897m to show Champions League football from next year.

Ofcom yesterday said it would not probe BT – but said it would look at the margin BT made on its wholesaling every six months.

Ofcom will consult on the proposals, and will make a final decision later this year.

Both TalkTalk (down 1.9p to 321p) and BT (up 13p to 613p) claimed the ruling as a victory for them.

TalkTalk said in an official statement: ‘We have long maintained that the time has come for fibre to be more robustly regulated.’

A spokesman added: ‘We are really pleased that Ofcom is today announcing that it now proposes to start properly regulating fibre more effectively.

‘Once implemented, these new rules will make British consumers and businesses better off.’

A BT spokesman said: ‘TalkTalk are saying this is some kind of victory for them. It’s a bit like Spain’s manager claiming they’ve had a decent World Cup.’