BT's response to Ofcom's consultation Wholesale Line Rental Fit-For-Purpose Assessment

BT's response to Ofcom's consultation Wholesale Line Rental Fit-For-Purpose Assessment

Issued 8 November, 2005

Executive Summary

BT supports Ofcom's proposed conclusion in its consultation on the Wholesale Line Rental (WLR) assessment that the WLR product is fit-for-purpose (FFP).  As a result, the retail price cap should be changed to RPI+0% immediately as a step towards competition becoming the determining force behind BT's retail prices. 

In the consultation Ofcom has recognised that, over the past five years, BT has taken significant steps to enable effective competition at the retail level for exchange lines by delivering a WLR portfolio.  This response considers each of the areas identified in the consultation and provides the reassurance that Wholesale Access (WA) is fit for purpose.  The main factors leading to this conclusion are as follows. 

• Based on extensive engagement with Industry, BT has successfully delivered, and continues to deliver, a programme of Wholesale Access releases leading to an effective WA product.

• BT has provided commitment to the action plan as detailed in this document, notably in the areas of:

  • scheduled systems developments for the SPG (Service Provider Gateway) and eCo Repair;

  • platform improvements programmes for provision and repair; and

  • an investment programme addressing new provision and fault clearance lead times.

• In addition, as set out in Ofcom's September 2005 Final statements on the Strategic Review of Telecommunications, BT has provided a number of legally-binding commitments that are relevant to the Wholesale Access product and these will be delivered by openreach, BT's new division.

• There is now also clear evidence that Wholesale Access is FFP from the ever-increasing demand and take-up of the service amongst both businesses and consumers.  We are expecting circa 2 million WLR analogue lines to be provided by early 2006, when the service will be equivalent to more than 40% of all the lines supplied by ntl and Telewest combined.  WA is unquestionably now a mass-market product. 

• Other indicators of competition at the retail level are strong.  There are a large number of well-resourced providers actively competing in the retail telephony sector.  There is also a high awareness amongst consumers, both business and residential, that they have a choice of telephony supplier evidenced by the level of high-street marketing activity for fixed-line telephony.  Finally, there are no outstanding factors which pose a barrier to entering the market for telephony services. 

The combination of the above factors suggests most strongly that a finding of FFP for BT's Wholesale Access product and the consequent deregulation of retail calls at this time is justified. 

Going forward BT's WLR portfolio will continue to evolve, not least to accommodate changes in technology, market demand and convergence. Industry, Ofcom and BT all have a critical role to play in shaping and developing new telephony products and services at all layers in the value chain.  BT is committed to engaging further in this process and to the development of an industry framework which stimulates the competitive process, encourages efficient investment and leads to real benefits for business and residential consumers.

Download full response as PDF document

BT would welcome any comments on the contents of this document which should be addressed to Teresa Wright by e-mail to teresa.wright@bt.com