Regulated prices

Communications providers which use BT’s copper network to provide wholesale and telephone and broadband services to homes and businesses are required to pay Openreach, BT’s wholesale access division, a fee to access the network for the provision of various wholesale telecoms services. The wholesale charge for such services is regulated by Ofcom where BT has been found to have significant market power in the delivery of these services. On 26 June 2014 Ofcom set charge controls for two such categories of services: local loop unbundling (LLU) and wholesale line rental (WLR) services.

* The above charge controls on local loop unbundling (LLU) and wholesale line rental (WLR) services for 2014/15 apply from 1 July 2014. Ofcom published correspondence with BT regarding its interim prices for LLU and WLR core rental services from 1 April 2014 to 30 June, the period between the expiry of the previous charge controls and introduction of the new controls.

We are currently undertaking reviews of the markets for Wholesale Call Origination (WCO) and Wholesale Call Termination (WCT) and the narrowband access markets (i.e. wholesale fixed analogue exchange lines and wholesale ISDN2 and ISDN30), Wholesale Local Access (WLA) and Wholesale Broadband Access (WBA).

The current charge controls on WBA Market A - IPStream services, Wholesale Line Rental and related services, ISDN2, ISDN30 and local loop unbundling services will expire on 31 March 2017. Please see correspondence between Ofcom and BT relating to the period after the expiry of the current controls and before the implementation of any new controls.

(*) MTR cap only applies to EE, H3G, Telefonica and Vodafone.
(**) MTR cap applies to all mobile communication providers as listed in the 2015 MCT statement

Ofcom removed the significant majority of regulatory controls on Royal Mail’s prices as part of its review of the regulatory framework for the postal sector concluded in March 2012, However, to ensure that a basic universal postal service is available to all, Ofcom capped the prices that Royal Mail can charge for Second Class stamps up to 2kg. This cap is expected to be in place for the seven years of the current regulatory framework (i.e. till March 2019).

The cap on the Second Class Letter price was set at 55p in 2012, increasing by CPI from 2013 onwards. The cap for Large Letters and packets (up to 2kg) is a control on the maximum level of prices for the basket of products. This takes the form of a basket weighted by volume which allows Royal Mail flexibility to set the prices of the eight individual products within the basket. The level of the Large Letter and packet cap for 2012 was set at an increase of 53% on 2011-12 prices (consistent with the Letter increase), increasing by CPI from 2013 onwards.