BT will face stringent restrictions over its wholesale broadband market access next year, as telco regulator Ofcom today labelled it "too dominant".

In a consultation published today, Ofcom recognised that improvements made across the broadband market over the past two years has seen the emergence of new technologies and suppliers. But it went on to say "at this point in time there is a national and distinct market in wholesale broadband services, and BT is the dominant provider of those services".

The report revealed a large majority of ISPs therefore rely on BT to deliver their high-speed services to customers. BT was urged to enforce a clear price difference between its IPStream and DataStream services.

IPStream is an end-to-end ADSL service only provided over BT's networks. ISPs sell the service on to their customers.

Rival telcos who offer similar wholesale broadband access to ISPs must depend on BT's broadband-enabled local loops and its routing network to deliver them. They connect to what is known as BT's ATM Interconnection, or backbone network, using BT's DataStream product.

But if DataStream costs are too close to IPStream prices then BT's network competitors cannot make sufficient profits, preventing them from competing effectively with the telco.

"BT should be required to provide DataStream products on a 'retail minus' basis," said Ofcom. "This means in particular that BT must allow a sufficient margin between the price it charges for its IPStream products and the price charged for the DataStream products."

Ofcom also wants to ensure BT will not unduly discriminate, will provide network access on reasonable request and will notify competitors of its terms and conditions.

The consultation will remain open until 6 February.

Related links:
Ofcom consultation document