Ofcom may have to settle BT poles and ducts row

The UK's communications watchdog yesterday revealed it may have to step in to settle a dispute over how much BT wants to charge rivals to run their superfast broadband cables via its telegraph poles and ducts.

BT is currently locked in talks with rivals Virgin Media, Fujitsu, BSkyB, TalkTalk and a host of smaller players over pricing but the two sides are struggling to reach a compromise.

Ofcom's chief executive Ed Richards told the Commons Select Committee for Culture, Media and Sport yesterday: "It would be much better if the parties could just agree a commercial rate" before adding: "I think it is unlikely they will agree."

The timetable for these negotiations runs until June, he said. "If after that there is no agreement, and there is a dispute brought to us, we will end up setting a price."

Ofcom required BT to make their poles and ducts available to rivals, as well as to put a reference offer of its potential charges into the market. BT revealed that pricing in January.

Mr Richards said: "It is a polarised issue. If price goes up it's good for BT if it goes down it is good for everyone else, so you have to make a judgement."

A group of companies interested in using the infrastructure recently wrote to BT boss saying the offer was "far from fair and reasonable" saying it would be cheaper to deploy its own infrastructure from scratch.

Mr Richards added that if Ofcom does step in, the issue would be unlikely to be sorted by the end of the year. "We would certainly expect to consult on the range of prices we are looking at," he said, before adding: "I'm anticipating that this is something we will have to examine in considerable detail and which will end up being appealed to the courts."

The Government will hope for a quick resolution, as the infrastructure will contribute to bringing superfast broadband to the "final third" in remote rural areas.