Ofcom wants to lower broadband prices for UK-based rural communities

Ofcom wants to give rural customers the same opportunity to get broadband as urban counterparts so it has introduced a set of price proposals that would reduce how much BT (NYSE: BT) can charge competitive carriers to purchase wholesale services from the incumbent in Market 1 regions of the UK.

As defined by Ofcom, Market 1 regions consist of rural telephone exchanges where BT is the sole provider of wholesale broadband services (11.7 percent of premises).

Under its initial proposal, Ofcom wants BT to cut wholesale prices by 10.75 to 14.75 percent below inflation. By implementing these discounts, Ofcom believes it will drive further competition between competitive service providers and ultimately pass on lower-priced services to broadband subscribers in rural parts of the country.  

The potential beneficiaries of the proposed price reductions would be about three million predominantly UK rural homes and businesses throughout sections of Scotland, Wales, Northern Ireland, South West England, Norfolk, Yorkshire, Cumbria and Northumberland.

However, Ofcom won't ask BT to reduce wholesale rates in Market 2 and Market 3 areas that are already served by a number of unbundled local loop (LLU) providers (TalkTalk, Sky Broadband, 02/Be Broadband) and cable MSOs such as Virgin Media.

These new price controls, which Ofcom will collect feedback on through the end of March, will only be applied on BT's 8 Mbps ADSL Max, but not its ADSL2+ services.  

For more:
- TeleGeography has this article

Related articles:
BT issues survey to gauge fiber broadband interest
Ofcom mandates BT open up fiber network to competitors
BT is fulfilling its Fiber to the X dreams
BT Retail gives broadband bundle customers free fiber service upgrade

Suggested Articles

The personal information of hundreds of thousands of CenturyLink customers was exposed online via an open database that has since been closed.

The number of hyperscale data centers hit a new high-water mark in the third quarter, according to Synergy Research Group.

Comcast Business has extended its broadband and network management capabilities into parts of Canada via a partnership with iTel Networks.