British telecoms regulator Ofcom has proposed a reduction in BT’s wholesale broadband charges in rural areas where the incumbent telco is the only broadband provider.
The changes could mean reductions of up to 15 per cent below the inflation for around three million homes covered by the new proposal.
In many regional areas, BT hasn’t made exchanges available to ISPs to be able to install their own equipment to ‘unbundle’ the phone lines to the end user which results in ISPs needing to pay BT to use their infrastructure to deliver services, ultimately resulting in higher prices.
Ofcom claim that the proposal would result in greater incentive for BT to invest in the roll out of high-speed ADSL 2+ service. The regulator says that around 22 per cent of UK households reside in an area without a competitive market for broadband services and unsurprisingly these are mostly located in rural areas.
The proposal now enters a consultation phase which is due to end in March. It seems unlikely that anyone in the market other than BT would object to lower wholesale pricing in rural regions.