On 22 August 1902, Hull Corporation (which later became Hull City Council) was granted a licence under the Telegraph Act 1899 to operate a municipal telephone system in the Kingston upon Hull area, opening its first telephone exchange in 1904 at the former Trippett Street Baths.
At the time, there were a number of such municipal telephone companies around the UK, all of which - with the exception of the one in Hull - were gradually absorbed into the Post Office Telephone department, which was subsequently to become British Telecom (BT).
Hull's bid to renew its licence in 1914 was made conditional on the £192,000 purchase of National Telephone networks infrastructure. The council gave its approval, securing the future of the country's only remaining municipally owned telephone corporation.
Hull has therefore remained an exception within the UK telephone network, being the only place in the UK not served by BT and is noted for its distinctive cream coloured telephone boxes and innovative services, for example becoming the UK's first fully digital network in 1989 using Marconi System X telephone switches (Central Offices or Class 5 switches).
The Company was first listed on the London Stock Exchange in 1999.
In the early part of the new millennium, KC started to pioneer services such as ADSL, Video on Demand and Digital TV. In February 2006, KC announced that it would be ceasing its Video on Demand and Digital TV services (called Kingston Interactive TV - KIT) on 1 April 2006.
On 1 June 2010, Kingston Communications changed its name to KC.
The KCOM Group is now a group of companies including KC (formerly known as Kingston Communications), Kcom (formerly known as Affiniti), its business integration and services arm and Eclipse, its national Internet Service Provider.
KC's Hull operation covers a relatively small geographical area. Although it is under the same Ofcom and EU obligations in terms of local loop unbundling the market is relatively small and the economics generally do not justify entry by other companies.
A further complication for any would-be rival of KC is that in Hull the first 1 km of wire from the exchange has a cross-section of 0.3 mm sq, as opposed to the standard 0.5 mm sq, requiring a more expensive DSLAM in the telephone exchange for providing an ADSL service.
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 [network] access on reasonable terms as Kingston's pricing is anti-competitive and prohibitive to service providers [other than KC]". 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.
In February 2011, Nexus Telecom signed an agreement with KC enabling them to offer effective wholesale broadband services to business consumers within the Hull area so giving them a choice of service provider.
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