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Rural areas could get better value broadband

Rural areas could get better value broadband

Category: Broadband

Updated: 20/01/2011
First Published: 20/01/2011

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Rural parts of the UK could soon receive better value broadband and faster internet speeds.

The communications regulator Ofcom has proposed reductions in the prices that BT Wholesale can charge internet service providers (ISPs) in parts of the country where it is the sole provider of wholesale broadband services.

If the plans are passed, BT would face cutting the prices it charged by between 10.75% and 14.75% below the RPI measure of inflation (currently 4.8%).

It is hoped that reductions would increase competition between ISPs and lead to reductions being passed on to retail customers.

The plans could benefit an estimated three million homes and businesses, mostly in rural areas including parts of Scotland, Wales and Northern Ireland, as well as the South West of England, Norfolk, Yorkshire and Cumbria.

While towns and cities have become accustomed to increasingly fast broadband speeds as a result of improving infrastructure such as optic fibre cabling, more rural locations have long struggled with sluggish connections.

However, the proposals could see speeds improved, as ISPs should be able to buy more capacity without increasing their costs because of the savings made on wholesale prices.

Ofcom has also proposed that certain technologies that support super fast broadband be exempt from certain charges, encouraging BT to invest where it is cost effective to do so.

Ofcom said a statement is expected to be published in the summer, with new charges to come into effect shortly afterwards.

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