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Offcom market classifications? are plusnet actualy doing anything???

pint
Grafter
Posts: 384
Thanks: 6
Registered: 19-08-2007

Offcom market classifications? are plusnet actualy doing anything???

Up and down the country there are probably countless people paying to much for their broadband as they are on a market 3 or 2 exchange, by offcoms own definitions, but which is defined by offcom as a market 1 exchange.
I have rasied this issue in the past, but it always seems to be brushed under the carpet, what i would like to know is:
When is the next re-classification due - some reports state mid/early 2013
Are plusnet ( and any other ISPs) putting any presure on offcom to sort this out and actualy re-classify exchanges as and when LLU opperators arrive with their own equipement and signifficantly lower prices.
As it stands at the moment it appears that an LLu provider ( ie talk talk/sky) can set  up shop in a market 1 exchane and undercut any ISp that uses BT wholesale products.
12 REPLIES
Community Veteran
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Registered: 11-08-2007

Re: Offcom market classifications? are plusnet actualy doing anything???

I have never understood how that actually works.
In a market 1 exchange, an LLU operator comes along and undercuts BT's going rate.
But immediately people want the exchange to be reclassified because BT is no longer the sole supplier.
When the exchange is reclassified to market 2, then presumably the LLU operator is no longer at a competitive advantage and has little hope of gaining much of the potential market - mainly due to customer inertia and lack of awareness of the alternatives.
So how does the "market" pricing encourage LLU operators to invest in presumably uncompetitive, mainly rural (therefore difficult), exchanges ?
x47c
Grafter
Posts: 878
Registered: 14-08-2009

Re: Offcom market classifications? are plusnet actualy doing anything???

By OFCOM delaying any re-evaluation process to allow enough time for any LLU operator that has set up shop to re-coup their up front capital investment.
Once they re-classify to market two the incentive for others to arrive has gone.
Indeed I'm on market 2 and this is exactly what has happened.  Some LLU's arrived, the exchange was sometime later re-classified and since then no more have come.
So everyone who is demanding the exchange is re-classified immediately the exchange is populated by some LLU operators is actually wanting to dis-incentivise LLU operators for even bothering in the first place!
Obviously when OFCOM do a global re-classify it will be swings and roundabouts in that some exchanges will only recently have the LLU's arrive so no profits for the LLU operators there however some exchanges will have been operating as market 1 for many years so giving the LLU operator much greater profits.
Again this might be all part of the plan to inventivise LLU operators to get into exchange EARLY to reap maximum profits from the exchange rather than wait several years which would then reduce their revenue stream before re-classification occured and the game was up.
Mayfly
Aspiring Pro
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Re: Offcom market classifications? are plusnet actualy doing anything???

I asked OFCOM and they said they update every 3 years the last time was Dec 2012 and the next update should be finished by March 2014.
TBH it was like pulling teeth trying to get them to understand that their policy was costing consumers money - the very people they should be protecting. They said if I was unhappy with my ISP to change. I just could not get them to understand I am perfectly happy with my ISP it's their policy I was [am] unhappy with.
Whilst I understand where x47c is coming from and all the arguments for and against the difference pricing policy you can't blame customers for feeling miffed that they are paying double for the same service that some get for half price, especially when in general they get lower speeds because they tend to be more rural locations.
x47c
Grafter
Posts: 878
Registered: 14-08-2009

Re: Offcom market classifications? are plusnet actualy doing anything???


Its actually getting even more interesting as the game is up for LLU in market 2/3 exchanges anyway due to the arrival of FTTC either through the commercial roll out or via the BDUK process.
What are the LLU operators going to do when they see their clients gradually dropping their subscriptions over the next few years in favour of BTOR's FTTC from the cabinet?
Worse still they will also loose the voice phone contract unless they change the way they sell the voice part.
The only way they can compete is by dragging out fibre to the cabinet themselves and putting a Talk Talk/Sky fibre whoever cabinet alongside the BTOR one.
Can't see that happening.
My crystal ball is a bit cloudy at the moment but maybe OFCOM will abandon the exchange classification totally.  It has served its purpose and the incentive for those exchanges not yet with a LLU presence is clearly not enough - so will never be and with FTTC via BDUK becoming a reality to some of those market 1 exchanges in the next few years its probably time to call a halt on it.
pint
Grafter
Posts: 384
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Registered: 19-08-2007

Re: Offcom market classifications? are plusnet actualy doing anything???

Wilst i can understand a period of grace around an LLU supplier arriving , ie the exchange stays market 1 for 6/12 months, to encourage LKLU suppliers in, this doesnt appear to be reflected in teh current system.
If an LLU supplier arrives sets up shop, and the next month offcom actualy get off their backsides and do something then the LLU provider has lost out.
As for FTTC ( fibre) from ehat ive foun d out about it , and the prices on the plusnet website, its still priced as a low cost ( ie markert 2/3) and a high cost area ( market 1)
The only reason I can think of as to why there doesnt appear to be any noise from the ISPs ( such as plusnet) about offcoms llack of inertai over this is that by keeping an exchange market 1 when by definition it should be market 2 or 3 is that there is possibly a higher profit margin on market 1 exchanges than there is on other exchanges - hence the complete silence from plusnet on this matter.
Community Veteran
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Registered: 31-08-2007

Re: Offcom market classifications? are plusnet actualy doing anything???

It's about time OFCOM looked after the End User, not solely the Industry.
pint
Grafter
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Registered: 19-08-2007

Re: Offcom market classifications? are plusnet actualy doing anything???

with regards to looking after the industry...
If their is no profit gain in keeping an exchange on the wrong market, by offcoms own definition of what a market 1,2, or 3 exchange is, then if anything its not protecting the industry, as most ISPs use BT wholesale products.
This would mean that BT wolesale based ISPs will be loosing out, as Offcom are preventing them from competinng on a level playing field.
In short, offcom are:
Preventing competition in the market place by making sure that LLU based ISPs have an unfair advantage through price fixing
Keeping prices artificialy high for consumers who use/are tied into BTwholesale providers
newagetraveller
Rising Star
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Registered: 03-08-2012

Re: Offcom market classifications? are plusnet actualy doing anything???

I'm on a Market 1 exchange which by OFCOM'S definition  should be  Market 2 and should have been for over a year now. There are two LLU providers at the exchange. Initially only one but even that made it Market two.
Personally, without going into the reasons why the exchange hasn't been re-classified, I feel as though I, and many others in a similar situation, are paying over the odds quite unnecessarily. Which I, again personally, seem to be subsidising those on exchanges classified as Mkt. 2 & 3.
One of those LLU providers I wouldn't touch with a 10 ft. long disinfected bargepole so don't wish to TalkTalk about them. The other is a no because I don't wish to donate funds to a certain Australian media mogul's empire!
Three mobile, 1,2,3, PAYG. https://www.three.co.uk/Store/SIM/Pay_As_You_Go
pint
Grafter
Posts: 384
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Registered: 19-08-2007

Re: Offcom market classifications? are plusnet actualy doing anything???

i know the feeling, Talk talk do have a certain shall we say aroma about them, but money talks, its obvious that plusnet do not care, and dont give a toss.
as soon as my line rental saver deal is up in November  ( mor maybe sooner depening on costings) I wil be considering a move to somewhere that charges a competitive rate.
itsme
Grafter
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Registered: 07-04-2007

Re: Offcom market classifications? are plusnet actualy doing anything???

Quote from: pint
This would mean that BT wolesale based ISPs will be loosing out, as Offcom are preventing them from competinng on a level playing field.
In short, offcom are:
Preventing competition in the market place by making sure that LLU based ISPs have an unfair advantage through price fixing
Keeping prices artificialy high for consumers who use/are tied into BTwholesale providers

Have you not worked out yet that for a decade plus the end user have been paying more than necessary as Ofcom have forced BT to keep their prices artificially high to encourage users on to LLU networks. You then may believe that BT make more money with inflated prices but they don't as their customer base is getting smaller.
pint
Grafter
Posts: 384
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Registered: 19-08-2007

Re: Offcom market classifications? are plusnet actualy doing anything???

so if offcom are forcing BTW to keep the prices high, are plusnet and other ISPs on the BTW network (so to speak) applying any presure on the regulator to change things, so that they can compete on price?
Sometime toewards the end of this year/early next year fibre will become available on my exchange, but with plusnets high prices it wont be worth it, outside a low cost area  the Essentails pacakge currently costs £22.99 per month ( 15.99 for the lucky ones) and the unlimited comes in at  £26.99 per month, as oppose to £19.99 per month for a 'low cost' area.

If offcom are forcing BTw to keep the prices artificialy high then were is all this extra money going? charity?  some one somewhere is enjoying the proffits from this, BT group?
Community Veteran
Posts: 19,100
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Registered: 31-08-2007

Re: Offcom market classifications? are plusnet actualy doing anything???

Of course they, it's paying inflated bonuses and shareholders. We the customer don't count  Roll eyes