Ofcom is seeking to open up competition in the city’s broadband by investigating KCOM's dominant position in the market.
The communications regulator has published a report in which it identified a number of “potential competition concerns”.
These include KCOM charging “excessive wholesale prices” that could have prevented customers from buying cost-effective bundles from the likes of Sky, and “refusing to supply wholesale services and unduly discriminating in favour of its own retail operations”.
The report says: “The Hull area still lags significantly behind the rest of the UK from a competition perspective, as there is limited competition at either the wholesale or the retail level.
"There is no competition from telecoms providers using their own equipment in KCOM’s exchanges (an approach commonly used to compete in the rest of the UK), despite regulation being in place since 2004 via an obligation on KCOM to provide such access upon reasonable request.
“There is no cable operator; and none of the large national retail providers – Sky, TalkTalk and Vodafone – operate in the Hull area at all, using KCOM’s networks or otherwise.”
Ofcom has set out a series of proposals it believes would bring Hull on a level playing field in terms of broadband provision.
· ensuring other telecoms providers can obtain the wholesale products they require at fair and reasonable prices from KCOM to compete effectively in retail broadband services
· greater transparency and accountability in relation to requests for new wholesale services and the functioning of the process by which such requests are submitted and considered by KCOM· greater transparency of KCOM’s costs for supplying wholesale services, to ensure that it is complying with its regulatory obligations.
Ofcom is now seeking further consultation with other internet service providers in the city, with a further report due to be published in March.
MS3 began developing a fibre network to Hull businesses back in 2013. The company, which is headquartered in Hessle, has to date laid about 40km of fibre cables to local firms, and invested more than £4.5m in the scheme.
It is now expanding its reach to more businesses and residential areas.
MS3’s Head of Communications Sam Hales says he welcomes Ofcom’s findings.
He said: “This report backs up what we already believed, which is that KCOM has a particular monopoly that is not necessarily operating to the benefit of businesses and consumers in the city.
“As a business we welcome the competition, and the transparency of KCOM prices that Ofcom has said is a concern – it is what we have been pushing for for years,
“People in Hull have been saying for years they want competition and a fair price, and that is what Ofcom is seeking to achieve. I think it is really positive for the city.
"We were consulted by Ofcom during the initial report, and look forward to feeding in to the next consultation."
. Further consultation can be found (read more) on the Ofcom website: