BROADBAND BILLS SET TO SOAR

? Sky and Talktalk warn of £10-20 increases

Will you have to pay for other people?

Ruralbroadband is the problem that nobody seems able to fix. As city dwellers enjoy ever-faster connections, even reaching 1Gbps, people in the countryside struggle on single-digit speeds. Countless initiatives to improve this have come to nothing. The stumbling block has always been money. Who’s going to foot the bill?

BT is the latest company with a plan. In a deal agreed with the Government, it says it will spend £600m upgrading the UK’S infrastructure so 10Mbps broadband can be delivered to the UK’S last one million “forgotten” homes and businesses – about five per cent of the total. This would be fast enough to stream films and browse the web smoothly.

But there’s a catch. BT will want that money back, and not just from the rural customers benefitting from the service. It will probably add this cost to the prices it charges rivals, including Sky and Talktalk, for using its cable network. In turn, they say they’ll have to pass on this cost to customers, increasing your bills by £10 to £20.

This is likely to split public opinion. Some will think that, like electricity and water, broadband is a vital utility that everyone is entitled to. It’s reasonable, therefore, for some people to pay more than others for the greater good.

Others will argue that nobody is forced to live in the countryside, and that slow broadband is a trade-off for a gentler pace of life and beautiful scenery.

One industry analyst thinks higher prices are “fair”. Matt Powell, editor of pricecomparison site Broadband Genie, says rural broadband is “important infrastructure and has to be financed somehow”.

One thing is sure: taxpayers won’t pay for it. Digital Minister Matt Hancock said: “It’s likely that it’ll be paid for through every broadband bill. Nothing is going to be paid for by taxpayers”. As Powell says, taxpayers have already paid billions, via Government schemes, to subsidise businesses’ broadband.

The reason the Government is so keen on BT’S plan is they see it as a way of delivering the Universal Service Obligation (USO), which was announced in 2015 by David Cameron as a way for people to legally demand the right to 10Mbps broadband. He wanted it in place by 2020.

But it may face opposition from telecoms regulator Ofcom. Chief executive Sharon White has said she wants to keep the USO separate from the prices BT charges other ISPS. Her concern is that BT may use the USO to suck more money from rivals, limiting competition.

BT’S rivals, already angry about how much they pay the company, will resist its plan. Talktalk says that all ISPS should create a joint fund to foot the bill. Together with Sky, it has called on Ofcom to cap the amount BT charges for access to its network.

However, some say that the companies are exaggerating the prospect of price rises.

Broadband Genie’s Powell called the £10-£20 increases “a simplistic rough estimate”.

He added: “It’s far too early to be throwing out concrete figures when even BT is unsure of the exact cost”.

Powell also said that ISPS may prefer to pass on the cost in higher set-up fees to new customers, leaving existing bills untouched. But however prices rise, firms will blame rivals for it, and try to sneak them in without you knowing. When this happens, we’ll do our best to expose their tricks.

Some will argue that slow broadband is a trade-off for a gentler pace of life and scenery