Ofcom Consultation on hiking BT Wholesale broadband charges

Broadband Provider BT, to reduce its huge £9.4bn pension deficit, could increase its wholesale charges it levy on the telephone lines rented by other broadband suppliers like Sky, TalkTalk and O2, according to the latest consultation from the UK telecom regulator, Ofcom.

This in turn would make these ISPs to pass on these price hikes to their customers who may see price go up by 4%, it was warned.

Last months’ interim financial report from BT showed that the company’s pension deficit has jumped from £5.8bn in July to £9.4bn on 30 September.

Ofcom which regulates BT wholesale prices, has issued consultation papers to find out whether a part the BT’s pension deficit can be reduced by a hike on BT Wholesale charges.

“The consultation is looking to promote a debate on whether it is appropriate for Ofcom to maintain or change the approach it takes to the treatment of BT’s pension costs.” Ofcom said in the statement.

The regulator explained that such a move is quite normal as the companies that provide other essential services like gas, electricity and water are being allowed to increase their charges to handle pension deficit issues.

Ofcom also clarified that the change in wholesale prices may not affect the consumers.

“If we change our approach, any adjustments in wholesale charges would not necessarily be felt proportionately by consumers.”

However, the final decision on BT hiking its broadband wholesale prices would be reached only after a second consultation is published by Ofcom next year.