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