Ofcom has announced its intention to increase the regulations on BT's charges for access to its Ethernet services.
BT's Ethernet services are usually used by businesses and mobile and fixed broadband operators to transfer data on their own networks, as well as by schools, universities and other public bodies.
Ofcom said it was important the market was effectively managed as the demand for leased-line Ethernet services has grown massively in recent years. This has been due to the huge demand for bandwidth hungry content and services such as mobile applications and cloud computing.
The watchdog put forward a number of proposals that would affect BT, including regulating the pricing for very high bandwidth services of 1Gbit/s and above, and confirmed it would maintain regulation on existing legacy services, as part of its Business Connectivity Market Review.
Ofcom also said it agreed with a number of concerns raised by stakeholders in the market that BT is not enhancing its services quickly enough and would push the firm to speed up this work.
"[The] concerns relate to a range of issues, including delays in rolling out more efficient backhaul services based on [wavelength-division multiplexing] technology, poor service quality, an inflexible approach to product migrations, high charges and restrictions on the use of space in exchanges," it said.
"We have pressed BT to give firm commitments for the roll-out of Ethernet backhaul products based on a new national backhaul network using WDM technology."
These changes would affect the firm's services across the UK, except for Hull, where local provider Kcom has a monopoly, and London, where the firm faces greater competition from other providers.
A spokesperson for BT said that although the firm was still assessing the details of the document it was concerned by some of the suggestions being put forward.
"The document is very long and contains a number of proposals but from an initial review, we are disappointed that Ofcom has found that BT has market power in the very competitive high bandwidth market and still intends to regulate declining legacy services," he said.
However, the spokesperson said the firm welcomed the watchdog's intention to extend deregulation of the market in London beyond Heathrow due to the high number of competitors in the area.
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