BT told to cut rural prices

20th Jan 2011 16:01

Communications industry watchdog Ofcom has outlined proposals aimed at reducing the price BT's wholesale business can charge internet service providers (ISPs) in rural areas.The regulator is proposing price reductions of between 10.75% and 14.75% below the inflation rate in a discussion document released on Thursday.Ofcom thinks the price cuts would lead to retail ISPs passing on price cuts to their custtomers. The changes may also lead to better quality services by enabling ISPs to allocate more bandwidth per customer which could deliver faster broadband services, the statement from Ofcom said.By Ofcom's calculations, almost 12% of UK households, or some 3m homes and businesses, could benefit from the proposals, which are aimed at reducing the discrepancy in prices paid by urban and rural customers for internet access.Ofcom is also proposing to exempt ADSL 2+, which is capable of speeds of up to 24 megabytes per second (mbps), from charge controls in the hope this will encourage BT to roll out the service to more areas.