Ofcom to impose price cuts on BT line rental
Broadband prices could fall after Ofcom forces BT to bring down line rental charges
Telecoms regulator Ofcom is forcing BT to lower the prices it charges other communications providers for line rental.
The new price restrictions are being imposed on BT's wholesale access division, Openreach, and could potentially see the price of broadband services reduced.
Under the new proposals, BT Openreach will only be allowed to charge £87.41 per year for a "fully unbundled" line - where an ISP provides both broadband and telephone services - down from the current £91.
The cost to ISPs of a "shared unbundled" line - where they only provide the broadband part - will fall from £14.70 to £11.92 per year.
Finally, the cost of wholesale telephone line rental will drop from £103.68 to £98.91.
All the price cuts will take effect from the financial year 2012/13, and BT could be forced to make further price cuts in subsequent years, with Ofcom setting the prices at a fixed percentage below the Retail Price Index.
Ofcom says the price controls are necessary "because Openreach has been found to have significant market power in the delivery of these services". The final decision is expected to be published in March, once they've been rubber-stamped by the European Commission.