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 28 March 2018 Ofcom for local loop unbundling (LLU) services we set a charge control for certain variants of BT’s Metallic Path Facility (MPF) services which is used to provide broadband and voice services over BT’s copper local access connections. In respect of virtual unbundled local access (VULA) services, for the first time we also set a charge control for BT’s Generic Ethernet Access (GEA) 40/10 service, which is used to provide broadband services over BT’s fibre connections.

* The above charge controls apply from 1 June 2018 to 31 March 2021. Full details can be found on the Ofcom website.

** On 22 May 2018, Ofcom issued a modification (the Modification) to the SMP conditions contained in Ofcom’s notification dated 28 March 2018 (PDF, 370.8 KB). This modified the SMP conditions by adjusting, on a forward-looking basis, the charge ceilings for Metallic Path Facility (MPF) rental services and certain Local Loop Unbundling (LLU) ancillary services in SMP Condition 7A. The Modification will take effect from 30 May 2018, with new charge ceilings applicable from 1 June 2018 to 31 March 2021 for MPF rental.

*** Prior to this modification taking effect the nominal charge for MPF rental from 1 April 2018 to 31 May 2018 was £85.46.

**** GEA 40/10 refers to BT’s up to 40 Mbit/s upload 10 Mbit/s download wholesale service.

(*) MTR cap applies to all mobile communication providers as listed in the 2018 MCT statement.

(**) Note that the nominal rates to apply from 1 April 2019 and 1 April 2020 will be added as explained in the 2018 MCT Statement. As of March 2018 we estimated the rate to apply from 1 April 2019 to be 0.480 pence per minute and the rate to apply from 1 April 2020 to be 0.471 pence per minute.

(*) FTR cap only applies to BT.
(**) FTR cap applies to all fixed communication providers as listed in the 2017 NMR 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.