Ofcom have published a consultation on their approach to cost modelling in the event that they continue to impose a Network Charge Control on BT as a consequence of the Narrowband Market Review. Ofcom propose to depart from their current approach in two respects. First, taking account of the European Commission’s 2009 ‘Recommendation on the regulatory treatment of fixed and mobile termination rates in the EU’, Ofcom propose to base any charge control on forward-looking long-run incremental costs. Second, Ofcom propose to base their cost model on next-generation network technology rather than the time-division multiplexing technology currently used by BT. In Ofcom’s view, next-generation network technology can now reasonably be considered as the most efficient available technology that performs the same function as the current technology.

Responses to the consultation are requested by 9 November 2012.

For the consultation document, please go to: http://stakeholders.ofcom.org.uk/binaries/consultations/narrowband- market-review/summary/condoc.pdf