Ofcom has permanently blocked an Openreach discount scheme designed to reward internet service providers for signing up new fiber-to-the-premises customers. The regulator first proposed rejecting the "Incremental New to Openreach Customer Offer" in July and confirmed the decision after industry consultation. The offer, due to take effect on October 1, would have provided a £35 connection discount and monthly reductions of up to £9.50 for as long as 30 months, but only for customers above each ISP's normal level of new Openreach signups.
Ofcom concluded the charges were "not fair and reasonable" because a reasonably efficient rival might be unable to match them while recovering costs. The watchdog was particularly concerned about alternative network operators, or altnets, which need to attract customers to grow and compete with Openreach. The scale and targeting of the discount, it said, could impede their efforts to build customer bases.
Other Openreach pricing changes were allowed to proceed. A one-off £50 rebate for connections above an ISP's usual level in areas served by Virgin Media O2 was judged unlikely to harm long-term competition, despite altnets also operating in some of those areas. An Ethernet offer with free connections under certain conditions raised no "prima facie concerns" requiring further investigation.
Reaction was mixed. Wholesale fiber operator nexfibre called the decision a positive step but said the regulator could have gone further, arguing that Openreach's "drip-feeding" of price changes should stop. Virgin Media O2 also welcomed the intervention while saying it could have gone further. Openreach said it put the offer forward in good faith and would review the decision carefully.