Ofcom has announced it is set to force BT Wholesale to reduce the cost it charges Internet Service Providers (ISPs) in rural areas - but this may not automatically mean a reduction in your bill.
Millions of homes and businesses in rural parts of the UK could receive better value broadband services by the end of this year following Ofcom’s decision to impose a reduction of 12 per cent below inflation per year to services provided using BT’s Wholesale broadband network.
Ofcom expects these price cuts to generate more competition between retail ISPs and to lead to cheaper retail prices, which will benefit consumers. However, rather than passing on the price cuts directly to the consumer, the changes may also lead to better quality services by enabling ISPs to allocate more bandwidth per customer which could deliver faster broadband services.
Ofcom estimates that 14 per cent of households, or around 3 million people, will benefit from this measure. The cuts will only effect 8meg services using ADSL and excludes ADSL2+. The reason is that Ofcom may be hoping BT will roll out the higher speed ADSL2+ service to more exchanges and therefore increase the quality of broadband available in rural areas.
The areas to benefit most will be outside major urban hubs including parts of Scotland, Wales and Northern Ireland as well as the South West of England, Norfolk, Yorkshire, Cumbria, Northumberland. A recent interactive map published by Ofcom highlighted the problem of getting good quality broadband services in rural areas.
Whether the cuts lead to cheaper broadband in rural areas or better speeds, especially at peak times, the consumer should hopefully could out on top.