New evidence from stakeholders has led Ofcom to identify stronger prospects for effective network competition than it had originally thought
Ofcom has issued two further consultations since publishing its main set of TAR proposals in March 2025
On 17 November 2025, Ofcom launched a “narrow consultation” – open until 17 December 2025 – on specific proposals to amend its leased line access (LLA) market analysis to reflect a greater potential impact of physical infrastructure access (PIA). The regulator is also consulting on technical adjustments to its cost modelling and proposed charge controls for PIA, LLA and inter-exchange connectivity (IEC) services. The consultation is part of the ongoing Telecoms Access Review (TAR), through which Ofcom is seeking to maintain a pro-competition, pro-investment regulatory framework in order to support further fibre deployments over the 2026-2031 period. It follows the release of the main TAR consultation in March 2025 as well as another additional consultation launched on 17 October 2025, which offered an alternative approach to the implementing the proposed price control remedies of Openreach’s 80/20Mbps fibre product.
The regulator has adjusted its modelling according to new evidence on the use of PIA by competing networks
In March, Ofcom proposed to regulate leased lines differently in different parts of the UK, to reflect the level of current or prospective competition. Its modelling approach sorted postcodes into areas based on the presence of competing networks. Responses to the main TAR consultation and new evidence received since (largely from Openreach) have indicated that PIA could have a greater potential impact on providers’ ability to build customer-specific network extensions than the regulator had previously assumed in its modelling. As such, Ofcom is now proposing to extend from 50m to 75-100m the ‘buffer distance’ it uses to identify areas where there is, or there is likely to be the potential for, material and sustainable competition to BT (known as ‘LLA Area 2’), and at the same time to define the boundaries with ‘LLA Area 3’ – i.e. locations where that competition does not exist and is unlikely to emerge. Compared to the main consultation, Ofcom’s revised proposals could have the effect of increasing the size of LLA Area 2 from 42% of postcode sectors to up to 50%, while contracting LLA Area 3 from 46% to as low as 38%.
It is currently unclear whether significant consolidation will occur that alters the competitive conditions in LLA
Responding to stakeholder comments and acknowledging that to date it has only outlined the possible implications of altnet consolidation in the wholesale local access (WLA) market, Ofcom has clarified its view on the potential impacts of any future deals on the competitive conditions in LLA over the forthcoming review period. According to the regulator, only a subset of transactions would result in the creation of an entity that would likely: a) have the ability or the potential to exert a material and sustainable constraint on BT in LLA between 2026-2031; and b) affect the proposed geographic market definition. It added that such activity would need to involve at least one current or potential material and sustainable competitor; however, it is currently uncertain whether this kind of deal will occur and, if it does, who the merging parties will be. Ofcom stated that it will monitor developments in the lead up to its March 2026 TAR statement, taking into account any emerging evidence on the likelihood of a relevant transaction occurring.
Ofcom has updated some proposals in light of stakeholder (primarily Openreach) feedback and changes to BT’s regulated financial statements
Ofcom is also currently consulting on certain technical changes to its cost modelling and some charge controls, which relate to:
PIA pricing: Leveraging new data presented by Openreach, Ofcom is proposing to change to the way it calculates the simplified lead-in duct rental charge, only applying an updated discount rate to the lead-in link duct and not the joint boxes component as well;
Fibre cost reallocations: Ofcom is proposing to incorporate certain reallocations that BT plans to capture in its 2026 Regulatory Financial Statements (RFS) into its charge control modelling for the TAR statement. This would impact the regulator’s proposed cost-based charge controls for LLA services up to and including 1Gbps sold in LLA Area 3, and dark fibre services sold in LLA Area 3 and in BT-only and BT+1 exchanges within the IEC market;
Low bandwidth services cost-based charge controls in Area 3: Ofcom is proposing to adopt an updated glidepath that allows Openreach to maintain national LLA pricing at CPI-0% for a one-year transition period (from which it would not derive any incremental monetary benefit), followed by a glidepath down to cost-based prices by the end of the TAR period; and
Dark fibre: Ofcom to change the treatment of Openreach sales product management component costs within its dark fibre cost modelling. This is intended to reflect BT’s recent amendments to its cost allocation methodology for this component, which took effect in the 2025 RFS.
