Market 1 and 2 Telephone Exchanges

[#1]

Quote from: pint

Im stuck on a market 1 exchange, and it looks doubtful that that will change any time soon, as it only servers 3,025 residential customers and 225 non residential customers.

Ohh look at the big city boy! 

Quote

Serves (approx):  1,479 residential premises 152 non-residential premises.

I'm still confused by the market system.
I'm Market 1 (unsurprising given the figures quoted above), so that means BT can charge more because they have the monopoly? How does that encourage competition exactly? 

[#2]

You have it the wrong way round.
OFCOM dictate the price BT can charge and they make it high enough that in theory the LLU operators can come in and make a good profit

[#3]

Quote from: Force

Isn't it the case that Ofcom's ruling means that it's cheaper in Market 3, rather than it being dearer in Markets 1 & 2?

Kinda.  Ofcom have always forced BT to charge a certain price for lines.  This is to make it worthwhile for LLU operators to put there equipment in an exchange, as they can undercut BT, get a good share of customers and get their investment back.  The Ofcom ruling last year (or whenever it was) was to allow BT to charge whatever they like in Market 3 exchanges, and hence complete with LLU operators.  So while this ruling is making it cheaper in Market 3 areas, that's only because an easlier one has made it more expensive.
Phil

[#4]

Thanks Jim & Phil for clarification.

[#5]

Jim and Phil have summed things up pretty well here.
Ultimately, on the smaller exchanges there is not much realistic prospect of investment as it would take far too long for LLU operators to get that investment back.