Ofcom has decided that KCom, Hull's dominant telecoms company, can sell broadband bundles despite opposition from rival operators.
KCom is somewhat of an anomaly in the UK as it is the only landline communications provider in Hull, where BT has no presence. As a result of this exclusivity, KCom is viewed by Ofcom as having significant market power and as such has not been allowed to provide bundled services to its residential and business customers.
However, on Friday the UK's telecommunications regulator announced that KC — KCom's retail ISP arm — will be allowed to offer packages of broadband, landline and other services. The impetus behind the decision was to allow Hull residents to benefit from the price savings provided by bundling, according to Ofcom.
"This will enable KC... to offer its customers similar service bundles to those offered by other communications providers throughout the rest of the UK," wrote an Ofcom spokesperson in a statement on Friday.
In September, Ofcom lifted restrictions on BT selling bundled services throughout the country as it deemed that it no longer had significant market power.
The KC decision comes with a number of provisos, most notably that bundles are made available to all residents and businesses in the area. In addition, prices must be clearly shown on KCom's website and they must be set in a way that does not discourage other providers from offering services in Hull.
"We are delighted that the regulator has now given us approval to go ahead," Sean Royce, KC's commercial and finance director, said in a statement." Now that we've been given approval, we intend to launch bundled services for both businesses and consumers within the next few months."
Ofcom's decision came after a month-long public consultation, which saw operators MediaSat3 and Nexus call for KCom to be allowed to offer packages only if it also started selling wholesale telecommunications services to competing ISPs. This would then allow rivals to enter the retail market in Hull and offer their own bundles.
The regulator said it went ahead with approval in spite of these objections so that Hull residents would not have to wait to buy packages.
"Notwithstanding the issues raised about access to wholesale products, we consider that the concerns about the impact on consumers of existing restrictions on bundling remain real and pressing," Ofcom said.
Guy Jarvis, director of fibre broadband ISP service company Fibrestream, said in a blog post that Ofcom's decision "raises a serious question mark as to whether the regulator is fit for purpose in its current form".
"Whilst it may seem that Ofcom allowing bundling by the incumbent KC is offering a benefit to local residential and business customers for telecoms services in the Hull and East Yorkshire area, this will be short lived," Jarvis told ZDNet UK on Monday. "The inevitable effect of allowing KC to further entrench its de facto local monopoly for fixed-line calls and broadband will be to reduce the possibility of competition coming into the local market.
"By taking the route of least resistance, Ofcom is failing in its fundamental duty to ensure that the consumer's interests are properly served," he added.