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 rate to apply from 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 2020 to be 0.471 pence per minute.

For background on the caps, see our final statement setting out the conclusion of our review of the wholesale MCT markets 2018-2021.

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

Ofcom introduced the safeguard cap for Second Class products in 2012 to ensure a basic, affordable, universal postal service is available to all consumers and that users of postal services, especially vulnerable consumers, are protected from ongoing price increases. The safeguard caps include a cap on the price of Second Class stamps for standard letters, and a separate basket cap for Second Class stamps on large letters and small and medium parcels up to 2kg.

In 2017 we reviewed the regulation of Royal Mail and concluded that the Second Class safeguard caps should remain in place. We committed to review the level of the caps during the course of the 2018/19 financial year, prior to their expiry on 31 March 2019.

We have now completed our review and have decided to raise the level of the Second Class standard letter cap from 60p to 65.2p in April 2019. The cap will rise by CPI each year on 1 April from 2020 until the end of the control period, on 31 March 2024. We have decided not to raise the level of the basket cap, and therefore the level of the cap will remain 29.4% above 2018-19 average prices, and continue to increase by CPI each year on 1 April until the end of the control period.

The caps will come into effect on 1 April 2019 and remain in force until 31 March 2024.