BT says new price caps on wholesale services provided to competitors could hamper its ability to invest in the next generation of super-fast broadband networks.
Normally, when competitors squawk about wholesale prices, it is because they have determined those prices are too high to allow making of a profit. When the wholesaler complains, it normally means the facilities provider doesn't think it can make enough money. If both buyers and sellers complain, regulators probably have got the prices just about right.
Some observers will say that such a response by an incumbent is nothing more than typical posturing to get a better deal. That's an apt observation. Still, some note that there are unusual stresses.
Ofcom is refusing to allow the company to include costs of funding its Openreach pension obligations in the rate base. Openreach is the entity that provides wholesale voice and broadband access to competitors.
BT has to contribute an annual £525m into its pension fund over the next three years, one way or the other.
Last year BT announced plans to spend £1.5bn putting a fibre-optic network capable of delivering broadband at almost five times the speed of BT's copper network within the reach of 10m homes by 2012. Since then, not only has the economy hit a wall, but BT Global Services also has suffered significant losses, leading to major layoffs.
Some think that means the broadband upgrade will be slowed, in the absence of a rethinking of wholesale rates.
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