OFCOM have announced a price cap on the charges BT Wholesale can make to retail ISPs on Market 1 exchanges like Wansford. The cap applies to a product called "IPStream Connect" which is currently used by six ISPs - BT, Sky, Talk Talk, Virgin, Orange and Entanet.
The price cap should reduce wholesale costs by about 11% below inflation but whether we see that as lower retail prices, more capacity for peak times or more profit for the ISPs remains to be seen.
An unintended consequence is that lower prices from BT Wholesale make it less attractive for other providers to install equipment. Talk Talk for example said this measure would reduce their expansion plans. On the other hand it may create an incentive for BT to introduce faster ADSL2+ services which are free of this price cap.
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