10GB Packages

[#1]

Quote from: jkerr82508

The theory being that in the absence of  competition, BT would be able to charge what they consider to be  an "economic" price for provision of service in small exchanges - a price that could be several multiples of the regulated price

Actually it is my understanding that in Market 1 areas OFCOM deny BT the ability to lower the prices (whether they actually would or not) to make it more lucrative for a 3rd party to set up shop as competition. As the 3rd parties have no interest in doing so you effectively have this silly situation where the lowest service has the highest price.
I'm on a deregulated exchange so get a good price, but I do sympathise with you as this was not the case until relatively recently. I feel the price differential between markets than PN choose to apply is excessive. Prior to my own price and performance change (which is now very attractive) I was seriously considering moving away from PN.

[#2]

Quote from: Laser

Actually it is my understanding that in Market 1 areas OFCOM deny BT the ability to lower the prices (whether they actually would or not) to make it more lucrative for a 3rd party to set up shop as competition.

You are probably correct. It was foolish of me to think that the purpose of regulation was to protect the consumer. Furthering an idealogical objective (expanding the "free market") is much more likely to be what our masters care about.
(I'm no longer affected by this price control, but I know people who are.)
Jim

[#3]

So let me get this right:
Living in a semi rural area (we have just over 800 lines on our local exchange) I have to put up with half the speed for twice the proce in order to encourage a LLU operator to set up in competition. But as soon as LLU operators come the price will immediately drop because there is now competition, so the LLU operator can never charge the higher price - only BT. Oh, and OFCOM have come up with this to protect my interests.
Is it me or can any-one else see a slight flaw in this logic?

[#4]

No, your logic is spot on 

[#5]

I won't attempt to work out that logic, because (flawed or not) it is old logic.
Ofcom introduced new price controls in market 1 exchanges in the summer, under a report labelled Better Value Rural Broadband.
Broadly, those controls make the cost of broadband limited to "RPI - 12%" each year (ie a price cut at the moment), and apply to 20CN only, explicitly excluding ADSL2+. Those are wholsale prices, so control what BTW can charge ISPs. They don't force ISPs to pass on the cut.
Ofcom's conclusion is that this could improve speeds in 2 ways:
(1) - it encourages BTW to convert more market 1 exchanges to 21CN, by changing the balance of the income-cost equation. A cynical person might believe that, while it might make 21CN cost-effective at some exchanges, it would encourage BT to not supply broadband at all from other exchanges, so surely this only works if there is a universal service obligation in place. The BDUK funding has a target minimum of 2Mbps for everyone, but it isn't setting this as a USO on BT, instead putting the USO onto local councils, and letting them choose the suppliers to turn this into reality, focussing on non-BT solutions for the hardest places. I suspect that, if BT get a significant portion of the BDUK funding, they'll be given an "almost-universal" obligation - say 2Mbps to 98% or somesuch - or will be imposed a proper USO on a county-by-county basis.
(2) - by lowering costs to ISPs, it encourages the ISPs to buy more bandwidth capacity. Obviously this shows that Ofcom don't expect ISPs to pass on the saving to consumers, but to spend the money in different ways. However, I don't see how it encourages more speed for rural users - unless they are limited by congestion on the backhaul, rather than low speeds due to long lines.