BT fights Ofcom over Ethernet price capping plan

National telco giant BT is caught in a dispute with Britain's communications watchdog Ofcom over plans to control the pricing of BT's wholesale business Ethernet services. BT lashed out at Ofcom, calling its attempt to regulate its prices a "mistake".

The harsh words are a response to the communications watchdog having notified the European Commission of its proposals to limit BT's pricing in an effort to encourage competition in the £2 billion-a-year business connectivity market. Ofcom wants to regulate BT's pricing on high-bandwidth Ethernet services because the network operator holds "significant power", making it difficult for other firms to fairly compete in that space.

"We believe Ofcom's decisions to regulate very high bandwidth Ethernet and optical services outside of London for the first time is mistaken; [...] the market is highly competitive and that there is no market failure that needs regulatory intervention," BT told The Register.

"We also believe Ofcom could have gone further in deregulating legacy retail services; newer, more efficient alternatives now exist removing the need for the regulation of such legacy services altogether," the firm added.

BT is a major player in the UK market, dominating much of the high bandwidth Ethernet sector, except in London, where it faces greater competition from other providers, and in Hull, where the market is led by Kcom.

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