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Ofcom to force price cut for 40/10 fibre broadband connections

Ofcom has today announced measures that will cut the cost of some superfast broadband products.

Wholesale prices for "up to 40Mbit/s" fibre-based broadband services will be cut over the next three years. Faster, unlimited internet connections based on fibre-to-the-cabinet lines enable more households to benefit from connected TV services in HD, especially in households where more than one user wants to stream or download TV programmes at the same time.

The new rules would also include stricter requirements on line operator Openreach to repair faults and install new broadband lines more quickly. These will set higher binding quality standards on the company’s performance. Should Openreach fail to meet the new targets, Ofcom has the power to impose fines.

Justifying the changes, Ofcom said that "until now, BT’s ability to raise prices has been constrained by people’s willingness to consider cheaper, standard broadband as an alternative. However, this constraint is weakening, as people require faster, more reliable connections to support a new generation of online services."

So Ofcom intends to reduce Openreach’s wholesale charges for its ‘40/10’ Mbit/s broadband package, with the price falling from today’s level of £88.80 per year to £52.77 in 2020/21. The charges that consumers will pay will still be significantly higher, but if the wholesale price cuts were passed on in full to consumers, it would reduce the cost of "up to 40Mbit/s" broadband by £3 a month.

Jonathan Oxley, Ofcom’s Competition Group Director, said: 
“Our plans are designed to encourage long-term investment in future ultrafast, full-fibre networks, while promoting competition and protecting consumers from high prices.