Ofcom outlines plans for BT price caps

Regulator Ofcom has outlined plans to cap the wholesale prices BT charges mobile and broadband operators that use its leased telecom lines to deliver their services.

The inflation-linked caps would be determined by the Retail Price Index (RPI) and would control the price of leased line-based Ethernet services.

In a statement, Ofcom said the plans would encourage tighter alignment between the price of BT's products and their costs by 2015.

"For BT's Ethernet services, we are proposing an overall basket cap of between RPI [inflation] minus eight per cent and minus 16 per cent, with a central estimate of RPI minus 12 per cent," said the statement.

The regulator is also thinking about capping the cost of low bandwidth Ethernet lines in west, east and central London to ensure prices do not rise for the next three years.

Coupled with the price caps Ofcom wants to introduce on other, more traditional, leased line services, Ofcom said the changes would represent a good deal for customers.

"Ofcom expects the proposed controls will lead to real-terms price reductions for most customers [within] the 2 billion leased lines market, such as businesses, schools and universities," said the statement.

"Consumer mobile and broadband operators, which use leased lines to transfer data on their networks, would also see savings which could be passed on to customers."

In other BT news, many of the firm's customers across London and the south east were left without internet connectivity earlier today.

Reports of service problems began appearing on social networking site Twitter around 1pm today, with many posting reports of problems in their area.

In a statement to IT Pro, a BT spokesperson said the problem was quickly resolved.

"A network fault meant broadband service for some customers in and around London was not available for just over an hour. The fault is now resolved and we are advising customers to reboot their hubs if they are still experiencing problems," it concluded.

Paul Grimshaw, managing director of Uxbridge-based IT support firm Totally Techy, said his firm had been affected by the outage.

"When BT went down our router automatically swtiched to IDNET and our internet was unaffected. We fielded multiple calls from clients and one of them sent some staff to our workshop to do some work," said Grimshaw.

"Although the outage was short in time, it caused a lot of disruption with our clients and has reminded them that the internet isn't impervious to major problems. Having a secondary connection would be a benefit in the long term."