BT’S ru­ral broad­band deal ‘to send bills soar­ing’

The Sunday Telegraph - Money & Business - - Front page - By Christo­pher Wil­liams

BROAD­BAND bills are due to jump af­ter the Gov­ern­ment pro­posed to let BT in­clude the costs of pro­vid­ing a de­cent in­ter­net ser­vice to mil­lions of ru­ral Bri­tons in its whole­sale prices.

Gavin Pat­ter­son, BT’S chief ex­ec­u­tive, said the com­pany would spend be­tween £400m and £600m to up­grade around 1.2 mil­lion lines that can­not cur­rently get a 10 megabits per se­cond con­nec­tion. Work is due to be com­pleted within five years.

Matt Han­cock, the Dig­i­tal Min­is­ter, told The Sun­day Tele­graph that bills were likely to rise as a re­sult. He said: “Noth­ing is go­ing to be paid for by tax­pay­ers here. It’s likely that it’ll be paid for through ev­ery broad­band bill.”

The pro­posed agree­ment be­tween BT and the Gov­ern­ment cov­ers most of the fi­nal 5pc of homes and busi­nesses lo­cated too far from a road­side cabi­net to get su­per­fast broad­band at 24 megabits per se­cond or faster.

New tech­nol­ogy will be in­stalled in ru­ral cab­i­nets to send more pow­er­ful broad­band sig­nals along long tele­phone lines.

BT’S ri­vals es­ti­mate that av­er­age bills will rise by be­tween £10 and £20 per month once the costs are in­cluded in whole­sale charges.

They also fear the new tech­nol­ogy will af­fect the eco­nom­ics of their net­works by squeez­ing out their own equip­ment from BT ex­changes. For tech­ni­cal rea­sons, pro­posed ru­ral up­grades must be con­trolled by BT’S net­work sub­sidiary Open­reach.

The deal will also stoke an on­go­ing in­dus­try row over the prices Open­reach is al­lowed to charge. Talktalk has called for ru­ral costs to be con­sid­ered sep­a­rately and for the in­dus­try to cre­ate a joint fund to foot the bill.

Mr Han­cock said there were “big ad­van­tages” to rais­ing the cash through whole­sale pric­ing, “not least that we can get on with it”.

It puts the Gov­ern­ment at odds with Sharon White, the Of­com chief ex­ec­u­tive, who last year told MPS that fund­ing uni­ver­sal broad­band and whole­sale prices “are two sep­a­rate con­ver­sa­tions”.

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