LBTYA Liberty Global Ltd

By Simon Zekaria and Ian Walker

LONDON--The U.K. communications regulator, Office of Communications, on Tuesday demanded BT Group PLC (BT.A.LN) provide better Internet broadband for businesses and cut charges to rival operators for those services, in the latest regulatory broadside directed at the British telecommunications incumbent.

In a statement following a review, Ofcom said BT--which lays down most of the U.K.'s fixed telecom lines through its infrastructure arm Openreach--must install high-speed business lines more quickly and "significantly" reduce the wholesale prices it charges to rivals. These "leased lines" are high-speed data links used by large businesses, as well as mobile and broadband operators, to transfer data on their networks.

"BT is relied on by many companies to install these lines, and its performance has not been acceptable," said Ofcom's competition group director Jonathan Oxley. "These new rules will mean companies across the U.K. benefit from faster installation times, greater certainty about installation dates, and fast repairs if things go wrong," he added.

Ofcom also said it confirms plans to require BT to provide access to its optical fiber network for providers of high-speed leased lines for businesses. This would allow operators to use BT's fiber-optic cables with their own equipment, rather than rely on BT's equipment, Ofcom said, which opens up BT's so-called dark-fiber network.

Ofcom said it would publish its final statement on the matter next month, subject to approval from European Union regulators.

As part of the dark fiber proposals, Ofcom requires BT to publish a draft proposal with wholesale pricing and terms for access by Sept. 1. Following negotiation between BT and other providers, BT will publish a final offer by Dec. 1. This results in dark-fiber access available to telecoms providers from Oct. 1 2017, it said.

On Tuesday, a spokesman for BT said: "We accept there is more to do on service and are committed to doing better and meeting our business customers' rising expectations."

The spokesman said dark fiber regulations were "flawed" and involve "an unnecessary layer of complexity and will deter others from building their own fiber networks."

A spokesman for TalkTalk Telecom Group PLC (TALK.LN), a rival to BT in the crowded market for telecoms and media services, said "British businesses are crying out for better high speed data services, and so we welcome Ofcom's focus on improving Openreach's performance and the opening up of dark fiber."

Last month, Ofcom, in a separate wideranging review, said BT must open up more of its network to rivals, but stopped short of forcing the incumbent telecommunications firm to spin off Openreach.

BT, a former state-run monopoly known as British Telecom, makes a hefty chunk of its revenue through its Openreach division by connecting up the country's copper wire and high-speed fiber-optic cable network. For years, BT has faced calls for increased regulatory pressure on the division by rival operators, which lease the network on a wholesale basis to reach their own customers.

It said BT should allow easier access to its cables for other operators to build up their own fiber networks. BT also competes with companies like Vodafone Group PLC (VOD.LN), Sky PLC (SKY.LN) and Liberty Global PLC's (LBTYA) Virgin Media in the rapidly-developing market for combined telephony, Internet broadband and media services.

At 1212 GMT, BT shares fell 1.2% to 444 pence, valuing the company at 44.7 billion pounds ($63.7 billion.)

Last year, the U.K. government called for the country's homes and businesses to have universal access to fast Internet broadband, which has raised pressure on BT to take more steps towards that goal.

-Write to Simon Zekaria at simon.zekaria@wsj.com and Ian Walker at ian.walker@wsj.com; @IanWalk40289749

(END) Dow Jones Newswires

March 22, 2016 09:11 ET (13:11 GMT)

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