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BT’s new, cheaper pricing scheme has divided the industry, with the altnets complaining that the move will result in long term harm for consumers

At the start of July, Openreach announced a major change to the pricing of their gigabit-capable fibre-to-the-premises (FTTP) broadband products, reducing their cost for the UK’s ISPs and providing them with long-term price security. 
 
The so-called Equinox pricing will offer significant discounts for ISPs to make use of the network, in some cases lowering monthly rental costs by up to a third. In return, the ISP customers must commit to using FTTP wherever possible.
 
The motivation here is obvious enough: in line with government rollout goals, BT is planning to invest £15 billion to ensure their network is expanded to reach 80% of UK premises by the end of 2026, but it will need to be assured of customers if this rapid acceleration is to be cost effective. These lower prices for ISPs, and thus customers in turn, should encourage the broader adoption of FTTP.
 
Naturally, this is great news for ISPs like TalkTalk and Sky, who are primarily reliant on Openreach infrastructure for services to customers.
 
For the rest of the industry, however, the move is much more problematic, with the discounts potentially squeezing out Openreach’s fibre competitors by offering rates that simply cannot be equalled. 
 
Per Ofcom’s stipulations, Openreach were made to give 90-days’ notice before its offer goes live in October, giving the industry time to react to their plans. Ofcom’s initial response, announced last week, was that the move would not have a ‘material adverse impact on competition’. 
 
Responses from the public consultation, released today, have been much less flattering, with alternative network providers almost unanimously decrying the move as bad for competition. 
 
The Independent Networks Cooperative Association (INCA), representing the likes of Zzoomm, County Broadband, and Truespeed, argue that the Equinox discount scheme “will almost certainly lead to medium- to long-term consumer harm, due to it having caused a reduction in competitive fibre infrastructure investment and deployment, reducing choice and innovation and likely resulting in higher prices for end consumers”.
 
CityFibre, arguably the largest altnet, said they had “serious concerns” about the process Ofcom had used to assess Openreach’s plan, arguing that the regulator was overly reliant on one-sided evidence from the incumbent. 
 
“Plainly, Ofcom must consider not only Openreach’s analysis of the potential impact on alternative network providers, but the views of the alternative providers themselves,” said the company in a statement. 
 
BT’s largest rival, the newly merged Virgin Media O2 (VMO2) has also vocally opposed the plan, saying Equinox is “likely to harm competition and undermine Ofcom’s strategic objective”.
 
“The effect of the discounts between new to BT network “(NTN)” and other customers (“non-NTN”) is discriminatory – both in the sense of being geographically targeted and because it prices the same processes at different charges, with the clear object of lessening competition. The overall effect is that an already-dominant provider will be able to exert even more pressure to narrow the scope for alt-nets to enter and expand,” said VMO2, imploring Ofcom to undertake a full review of the plan.
 
For now at least, Ofcom seem to be content with their provisional ruling that would allow the introduction of Equinox, having acknowledged in their previous assessment that the discounts would increase competition for altnets but suggesting this would lead to “better consumer outcomes”.
 
 
How will the Equinox discount scheme affect the UK’s broadband landscape? Find out from the experts at next month’s Connected Britain conference
 
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