Ofcom moves to block an Openreach discount aimed at new customers
Ofcom has provisionally told Openreach to pull a discount it put to the regulator in June. It is the first time Ofcom has stepped in to block one of Openreach’s commercial offers. The deal, the Incremental New to Openreach Offer, pays broadband providers up to £9.50 a month per customer for up to 30 months, and only on new sign-ups above the number a provider would normally win. Ofcom says the terms are not fair and reasonable and could harm the development of network competition. The provisional decision was reported by ISPreview and Computer Weekly. The consultation closes on 27 August, and a final decision is expected by the end of September.
None of that is a line on your bill. A wholesale discount is what your provider pays to use the network your line runs on, so it reaches you only if the provider passes it on. Money of that size does tend to show up in the deals eventually, though. Openreach said it was disappointed and disagreed with the analysis, and that it had put the offer forward at a time when many households are watching every bill.
So here is the awkward part first: a regulator has moved against something that might have made some broadband cheaper. Ofcom’s case is about who the discount was aimed at. It applied to new customers above a provider’s usual run rate, which is exactly the group smaller networks need in order to grow, while the price for everybody else stayed where it was. Rivals matching it, Ofcom says, may not be able to recover their costs, given how low their prices already are for all of their customers. Our guide on altnets versus Openreach sets out how the two sides of that market actually differ.
Nothing has been withdrawn yet. Nothing on your bill changes because of this either. If you are shopping this month, what matters is still what is genuinely available where you live rather than what the wholesale market is arguing about, so start with the availability checker. If you are part-way through a contract, your annual increase is governed by the terms you signed, which our guide on broadband price rises explains.
The honest gap in all of this: nobody has shown how much of that £9.50 would ever have reached a customer. Both sides are making an argument rather than showing you the arithmetic. The date to watch is the end of September, when Ofcom says it will decide.