Ofcom is seeking to open up competition in the city’s broadband by investigating KCOM's dominant position in the market.
The communications regulator has published a report in which it identified a number of “potential competition concerns”.
These include KCOM charging “excessive wholesale prices” that could have prevented customers from buying cost-effective bundles from the likes of Sky, and “refusing to supply wholesale services and unduly discriminating in favour of its own retail operations”.
The report says: “The Hull area still lags significantly behind the rest of the UK from a competition perspective, as there is limited competition at either the wholesale or the retail level.
"There is no competition from telecoms providers using their own equipment in KCOM’s exchanges (an approach commonly used to compete in the rest of the UK), despite regulation being in place since 2004 via an obligation on KCOM to provide such access upon reasonable request.
“There is no cable operator; and none of the large national retail providers – Sky, TalkTalk and Vodafone – operate in the Hull area at all, using KCOM’s networks or otherwise.”
A KCOM spokesperson said the company was looking forward to sharing its views with Ofcom on how regulation could help them meet the needs of customers.
Ofcom said this very limited competition was evident in the higher prices Hull customers face.
It added: “Our preliminary research indicates that KCOM’s retail prices for standard and superfast broadband appear to be higher than those of the largest providers in the rest of the UK, especially when introductory discounts, which are very common in the rest the UK but not from KCOM, are taken into account.”
Ofcom has set out a series of proposals it believes would bring Hull on a level playing field in terms of broadband provision.
These include:
· ensuring other telecoms providers can obtain the wholesale products they require at fair and reasonable prices from KCOM to compete effectively in retail broadband services
· greater transparency and accountability in relation to requests for new wholesale services and the functioning of the process by which such requests are submitted and considered by KCOM
· greater transparency of KCOM’s costs for supplying wholesale services, to ensure that it is complying with its regulatory obligations.
Ofcom is now seeking further consultation with other internet service providers in the city, with a further report due to be published in March.
MS3 began developing a fibre network to Hull businesses back in 2013. The company, which is headquartered in Hessle, has to date laid about 40km of fibre cables to local firms, and invested more than £4.5m in the scheme.
It is now expanding its reach to more businesses and residential areas.
MS3 communications director Sam Hales says he welcomes Ofcom’s findings.
Source: http://www.hulldailymail.co.uk/news/business/ofcom-wants-more-broadband-competition-129959