Ofcom wants more broadband competition in Hull following 'concerns' over KCOM dominance
COMPETITION: MS3 connected its first customers to fibre broadband in Meadowbank Road, west Hull, in January. Picture shows MS3's head of communications Sam Hales with the engineers.
By Hull Daily Mail | Posted: 22 Jun 2017
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.”
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.
· 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.
He said: “This report backs up what we already believed, which is that KCOM has a particular monopoly that is not necessarily operating to the benefit of businesses and consumers in the city.
“As a business we welcome the competition, and the transparency of KCOM prices that Ofcom has said is a concern – it is what we have been pushing for for years,
“People in Hull have been saying for years they want competition and a fair price, and that is what Ofcom is seeking to achieve. I think it is really positive for the city.
"We were consulted by Ofcom during the initial report, and look forward to feeding in to the next consultation."
PureBroadBand (PBB) was established in Hull in 2008. In 2011, the Anlaby Road firm started to deliver its services to residential and small business properties, using state-of-the-art modern wireless technologies to transmit high-speed internet to a small antenna fitted to customers' rooves.
Director Joe Tandy said: "We were consulted as part of the process for this report, so have had conversations with Ofcom.
"The wholesale prices offered by Kcom is prohibitive, so hopefully Ofcom's report will help to bring that down and make it more transparent. Ultimately, Lightstream is a good broadband service, however that has never been available to buy wholesale.
"In other parts of the UK, businesses have someone dedicated to shopping around for broadband deals, but you don't see that in Hull, because many people still do not believe there are alternatives.
"We have been providing an alternative since 2011, but hopefully this latest report will bring in even more."
A spokesperson from KCOM said: “Our position as the leading provider of broadband to households and businesses in the region means Ofcom already requires us to have a process in place for other communications providers to request access to our network to serve their own customers.
"This is an option that has been taken up by several providers in recent years and we continue to work with partners to help them deliver services to their customers in this way.
“Our full fibre Lightstream service is available to more than 130,000 properties in Hull and East Yorkshire, making it the ultrafast capital of the UK.
"We welcome the plans of other broadband providers to develop their own fibre networks here, which make Hull unique in the UK in having the prospect of a choice of three suppliers of full fibre broadband. Households and businesses in the region are also served by a number of providers of 4G and fixed wireless broadband services.
“Ofcom has recognised that the broadband market is changing as providers like KCOM develop new and better services to meet the digital needs of consumers and businesses. We look forward to sharing our views with Ofcom on how regulation can help us meet the needs of our customers today and in the future.”