Ofcom proposes cheaper high-speed data links

Ofcom proposes cheaper high-speed data links

Ofcom has revealed plans to reduce prices for high-speed data links in a move that will help companies increase productivity and efficiency while cutting down on costs.

The regulator has notified the European Commission (EC) of the proposals, which have been created following its recent Business Connectivity Market Review.

It is hoped that the plans will be approved by the EC and include new price controls on BT, which currently provides the majority of wholesale leased-line services being used by businesses.

Ofcom believes that these stricter controls will reduce the price of newer products based on modern Ethernet technology for many companies, helping to meet the increased demand for fast-data products from the likes of schools, universities, mobile operators and internet providers.

The telecoms regulator is proposing that BT's very high-bandwidth, wholesale leased-line services at speeds above 1 Gbit/s – in all parts of the UK except London and Hull – should be subject to regulation.

It claims that the firm has been found to have "significant market power" in this relatively new market.

While London is exempt from this section of the proposal, Ofcom does have plans for the capital, as it has proposed significant price reductions, at 11 per cent below inflation on an annual basis over the next three years.

"Under the draft decisions, BT's prices for leased lines based on older technology will be permitted to rise modestly to reflect higher costs in this declining market. Reductions in ethernet charges will provide customers with a cheaper alternative and an incentive to migrate to newer, more efficient technologies," an Ofcom publication read.

The organisation expects a decision on the proposals later this month, with a final statement expected at the end of March.

Measures highlighted in the draft have been designed to promote competition and help ensure that the UK has a "backbone of high-speed business networks" that are capable to support companies and consumers that rely on these services.