KCOM Group - Monopoly Concerns

Monopoly Concerns

As residents and most businesses in Hull are served only with telecoms services by KC, some service users are unhappy with the monopoly position KC has in the Hull area.

The main concern is that of Internet service provision; KC's Karoo service is the only residential broadband operator in the Hull area. According to a decision from the European Commission in 2004, KCOM Group PLC (“Kingston”) have a 100% market share in the wholesale market of broadband services in the Hull area. Considerations include concerns over KC's acceptable use policy, the cost of the service and the inability to use other providers.

In December 2005, Giacom, the owner of Hull24 – a rival broadband provider in the Hull area – complained to Ofcom regarding the provision of network access to KC's rivals. The complaint is that "Giacom alleges that Kingston is not providing access on reasonable terms as Kingston's pricing is anti-competitive and prohibitive to service providers ". In April 2006 Giacom and KC resumed negotiations on a deal to allow Hull24 to use KC's network; as a result Giacom withdrew its complaint and Ofcom has closed the case.

In August 2007 the alleged monopoly of KC was referred to the European Commission by Yorkshire and Humber MEP Diana Wallis.

In May 2008 the "Review of the wholesale broadband access markets" report published by Ofcom determined that KC was not acting in a way that would keep out rival companies, and that pricing for wholesale broadband and access to local-loop unbundling was within the market range. The main reason cited by rivals for not providing services in the Hull area was rather one of overall cost effectiveness, given the relatively small number of potential customers (190,000 homes), and the fact that many of these would be likely to remain with the incumbent supplier.

In July 2009, Nexus Telecom signed an agreement with KC enabling them to offer effective wholesale line rental and call tariffs to business consumers within the Hull area so giving them a choice of service provider.