Ofcom seeks cheaper rural broadband

Heavily criticised regulator proposes reductions in BT wholesale prices

Telecommunications regulator Ofcom has proposed reductions in the prices BT Wholesale can charge internet service providers (ISPs) where it is the only provider of wholesale broadband services.

The move is intended to usher in cheaper broadband in rural areas.

The potential reductions are between 10.75 and 14.75 per cent below inflation.

The regulator expects that nearly 12 per cent of households, or around three million homes and businesses, would benefit from the changes. It is not proposing any changes in other areas.

Ofcom hopes that reduced wholesale prices will drive competition between ISPs leading to lower prices for consumers.

The proposals could result in improved broadband speeds for consumers because ISPs would be able to afford to allocate more bandwidth per customer, if it was cheaper overall to obtain.

Ofcom intends to publish a statement in the summer, after which the proposals are planned to take effect.