For the first time, Ofcom has announced that it proposes to direct Openreach to withdraw one of its proposed new customer offers. If Ofcom affirms its provisional view in its final decision this autumn and Openreach appeals Ofcom’s decision to the Competition Appeal Tribunal (CAT), any guidance resulting from an appeal could soon have read-across to other regulated sectors, in light of the Government’s consultation on other regulatory appeal frameworks. 

How did we get here?

Ofcom has long-designated Openreach, as BT’s wholly owned subsidiary, as having significant market power (SMP) in the wholesale fixed telecoms network market. Ofcom has consistently used its regulatory powers to improve access and pricing to foster new entry, competition, and investment in rolling out full-fibre networks across the country – which has led to significant entry of, and investment by, alternative network providers, also known as altnets. Notwithstanding these new entrants, in March 2026, Ofcom reaffirmed its view that Openreach has SMP in the wholesale local access market, which includes fibre network connections. 

Ofcom imposes conditions on companies with SMP status. For example, Openreach is obliged to notify Ofcom of certain planned commercial offers. Ofcom then considers whether these raise competition concerns under its regulatory framework. 

In a first for the regulator, Ofcom has launched a consultation on its provisional view to direct Openreach to withdraw one of its proposed new customer offers. This offer would give internet service providers a substantial monthly discount for bringing new full-fibre customers – beyond its usual sign-up numbers – onto Openreach’s network. Ofcom has explained in its consultation that it considers that this offer is not fair and reasonable: instead, Ofcom considers that the offer leads to margin squeeze as Openreach is only able to make that targeted offer due to its SMP status, and reasonably efficient competing operators would not be able to compete on those margins. Ofcom considers the offer could further harm the development of network competition by targeting these significant discounts at new customers for whom altnets are more likely to be competing, at a point where new customers are a key parameter of competition. 

The consultation is open until 27 August 2026 and Ofcom expects to make a final decision by the end of September 2026. 

What could happen next?

If Ofcom were to affirm its provisional view and direct Openreach to withdraw the commercial offer following the consultation, and Openreach was dissatisfied with that outcome, Openreach would have a right of appeal to the CAT per s.192 of the Communications Act 2003. 

The CAT does not conduct a re-hearing of the case – it will decide the appeal on judicial review principles and will also give consideration to the merits of the case. As such, Openreach would have to appeal on judicial review grounds (illegality, unreasonableness and/or procedural unfairness) and would need to persuade the CAT that Ofcom’s decision was wrong on the merits. If the CAT finds in Openreach’s favour, it cannot substitute its own decision for that of Ofcom. The CAT can only quash the decision (in whole or part) and remit it back to Ofcom to reconsider in accordance with the CAT’s ruling. In recent telecoms appeals, the CAT has afforded a margin of appreciation to Ofcom as a specialist regulator. 

If Openreach does appeal Ofcom’s decision, this would be an interesting one to watch as the Government has recently proposed to transfer regulatory appeals in other sectors (e.g. energy and water) from the Competition and Markets Authority to the CAT. In doing so, the Government has proposed that the CAT could adopt a similar standard of review as it applies in telecoms appeals. Given there has only been a small number of telecoms appeals in recent years, any further guidance from the CAT as to how it may approach regulatory appeals would potentially have reach beyond the telecoms sector.