In the Wholesale Fixed Telecoms Market Review (WFTMR), Ofcom believes there are four relevant product markets: one upstream market (in this context, 'upstream' means the most basic product, i.e. copper or fibre access), and three downstream markets ('downstream' meaning wholesale, i.e. players that buy the basic upstream product then add their own elements).

Each product market is then broken down into geographic markets, as some areas of GB are more competitive than others.

Ofcom propose a single upstream national market for the supply of telecoms physical infrastructure (ducts and poles) and three downstream product markets:

• the supply of wholesale local access (WLA, the connections from the local telephone exchange to a premises, which are used to provide broadband and other services at the retail level) at a fixed location;
• the supply of leased line access (leased lines are typically used by businesses to connect geographically distant offices and also form the data highways of the UK's mobile and broadband networks, including 5G); and
• the supply of inter-exchange connectivity (IEC, the connections between BT exchanges in different geographic areas, such as between towns and cities).

Ofcom has then sought to break each of these markets down geographically. For the physical infrastructure, it has defined it as a single national market (excluding the Hull area, where the main player is KCOM). This is the main difference from the March consultation on remedies, which divided the physical infrastructure market into areas. Ofcom now recognises that even though some areas have more rival infrastructure than others, the advantage of BT Openreach's ubiquitous telecoms physical infrastructure would still result in the conditions of competition being similar in all areas.

For WLA and leased lines, there are different geographic markets. 

For WLA:

• Area 2 – potentially competitive postcode sectors, where non-BT fibre networks are being built or there are reasonable prospects of them being built; 
• Area 3 - uncompetitive postcode sectors, where there is unlikely to be material commercial deployment by rival networks.

For leased lines:

Central London Area – extensive rival networks to BT Openreach

• High Network Reach Area – a high degree of rival networks to BT Openreach
• Area 2 – potentially competitive postcode sectors, where non-BT fibre networks are being built or there are reasonable prospects of them being built; 
• Area 3 - uncompetitive postcode sectors, where there is unlikely to be material commercial deployment by rival networks.

The premises covered by Area 2 and 3 geographic markets are similar for both WLA and leased lines. (Area 1 is areas that are fully competitive and therefore do not need regulation. At the moment, Ofcom has not identified any such areas but expects to do so in future.)

For IEC, each BT exchange is defined as a distinct geographic market.

Ofcom proposes that BT Openreach has SMP in all the markets - except the Central London area leased lines market and any BT exchange that has two or more rivals present (around 600 out of a total of 5600 exchanges) - meaning it could act anti-competitively in those markets. Without regulation, BT Openreach could refuse to give access to its physical infrastructure or only give access on less favourable terms than to its own businesses; set excessive wholesale charges for access to its physical infrastructure, WLA and leased lines; or discourage rival networks from building their own infrastructure by offering targeted geographical discounts or other loyalty-inducing prices. 

Rather confusingly for those used to other types of regulation, regulatory obligations are called 'remedies' in the telecoms world. As set out in the March 2019 consultation on remedies, Ofcom is proposing in the WFTMR different levels of regulation of the downstream markets for different geographic areas, depending on the relative coverage of BT Openreach and rival fibre networks. 

Ofcom proposes to impose the following obligations on BT Openreach, which continue the current regulatory requirements:

• Requirement to provide wholesale access to its duct and pole infrastructure
• Requirement to publish a Statement of Requirements (SoR) process, setting out how BT Openreach will deal with requests for new forms of network access
• Transparency obligations: a requirement to publish a Reference Offer (RO), to notify changes to charges, terms and conditions, and to notify technical information
• A cost based charge control to allow BT Openreach to recover its costs but preventing excessive pricing
• No undue discrimination: BT Openreach must treat rival network operators the same as its own businesses, unless it can justify otherwise
• Voluntary KPIs

The WLA and leased line markets, although separate products, overlap in practice. As part of Ofcom's promised 'holistic regulation', it has looked at the WLA and leased line geographic markets together and imposed the following remedies on BT Openreach, which are broadly in line with those imposed previously:

In Area 2, Ofcom propose that:

• BT Openreach must provide network access (but need not do so for new copper services: this is to encourage the switch from copper to full fibre. See Copper Switch Off below)
• The wholesale price BT Openreach charges retail providers for its entry-level (40 Mbit/s) superfast broadband service is capped to inflation, although it would be able to charge slightly more if this is delivered over full fibre, to reflect the additional customer benefits, such as speed and reliability, that fibre offers over copper. Ofcom is not intending to regulate the prices of Openreach's higher-speed packages
• BT Openreach cannot offer any geographic discounts
• BT Openreach must give Ofcom 90 days' notice (as opposed to the current 28 days) of changes to its terms and conditions including prices, to give Ofcom time to assess whether these changes will undermine competition
• There must be equivalence of inputs (EOI) obligations: this means that BT Openreach must supply exactly the same services to all telecoms providers (including its own downstream businesses) on the same timescales, terms and conditions (including price and service levels), by means of the same systems and processes and by providing the same information – in other words a complete prohibition of discrimination, with no discretion. However, where BT Openreach have been providing network access other than on an EOI basis, they will not have to change this, protecting investment that has already taken place: an approach consistent with that taken in previous market reviews
• BT Openreach have obligations to maintain quality of service as at 31 March 2020 for most products
• Transparency obligations apply: a requirement to publish a Reference Offer (RO), to notify changes to charges, terms and conditions, and to notify technical information

In Area 3, Ofcom propose:

• BT Openreach must provide network access (but need not do so for new copper services)
• A cost-based charge control on MPF and FTTC rental charges across all bandwidths, but pricing flexibility on BT Openreach's fibre services (FTTP and G.Fast)
• A version of the "regulatory asset base" approach, allowing BT Openreach to recover the "efficient costs" of investing in fibre networks, whereby MPF and FTTC charges are marked up to allow the recovery of BT Openreach's fibre investment costs where it meets pre-specified investment targets
• A  charge control on rental and connection charges for leased lines of all bandwidths, inflation-adjusted from 2021 levels
• In the leased line access market, BT Openreach must provide access to its dark fibre, as Ofcom expects dark fibre access to become the primary leased line remedy over time, although for now BT Openreach must also continue to provide active leased line services
• Obligations to maintain quality of service as at 31 March 2020 for most products.
• Transparency obligations apply: a requirement to publish a Reference Offer (RO), to notify changes to charges, terms and conditions, and to notify technical information
• EOI obligations apply
• Prohibition on geographic discounts for MPF, FTTC 40/10 and FTTC only.

The objectives behind this are to incentivise BT to build new fibre networks in areas where there is little competition from other network providers.

For LL Access in High Network Reach areas Ofcom propose limited remedies, reflecting the fact that there is an appreciable level of competition with BT:

• Network access obligations
• Transparency obligations
• A requirement to charge fair and reasonable prices
• KPIs for quality of service
• An EOI obligation.

For the IEC markets Ofcom is proposing the following remedies:

• BT Openreach must provide leased lines for fibre connectivity at all bandwidths
• A dark fibre access remedy in the IEC market where at least one of the exchanges is BT only and where the nearest rival PCO network is more than 100m away (3,703 out of 5,573 exchanges). This continues the current regulatory requirement on BT Openreach. Dark fibre will promote competition, in the provision of backhaul between exchanges where there are no competing networks, and will also help to reduce barriers to infrastructure build in marginal areas of the access markets 
• Transparency obligations
• A charge control based on flat prices in real terms for CI leased lines. Ofcom is proposing a cost-based charge control for dark fibre to allow Openreach to recover its costs whilst preventing excessive pricing
• An obligation to maintain quality of service as at 31 March 2021 for CI leased lines and to provide the same quality of service as for Ethernet for dark fibre in the BT only areas
• An EOI obligation.

These solutions focus on encouraging BT Openreach to continue to invest in fibre networks in non-competitive areas, whilst acknowledging the need to balance protecting consumers and preserving BT's incentives to invest in fibre networks. 

Ofcom want to encourage BT Openreach to continue to invest in full fibre networks and then to retire the existing copper network. BT Openreach has announced plans to deploy fibre to 4 million premises by March 2021 and Ofcom aim to promote investment in fibre by shifting the focus of regulation from copper to fibre: the faster customers migrate from copper to fibre, the stronger the business case for investment as BT Openreach can avoid the costs of operating both copper and fibre networks in parallel.

There will be a two-year transition period during which copper and fibre regulation will apply in parallel in each exchange, starting when BT Openreach has reached 75% ultrafast coverage in that exchange. At that point Openreach would no longer be required to provide copper services for new connections or for changes to bandwidth or provider, and instead could offer only fibre services. During this two-year period there would be a charge control on both copper and fibre services, but the charges for fibre would carry a premium, to reflect the additional value that fibre offers.

At the end of the two-year period and when BT Openreach has made, or taken all reasonable steps to make, fibre available at all premises on that exchange, Ofcom propose to remove the charge control (including the prohibition on geographic discounts) for copper services for premises where fibre is available.