Ofcom Demand Rural Broadband Pricing Should Be Cut

The digital divide between town and country looks to be shrinking, as Ofcom rule that BT have to cut wholesale pricing.

Currently, BT is the only operator with equipment in many of the smaller telephone exchanges, meaning that other ISP’s have to factor ‘renting costs’ into their pricing plans.  The result is that customers often miss out on cheaper deals available in towns and cities.

In cities, many ISPs, other than BT, are able to offer consumers cheap broadband through a system known as local loop unbundling (LLU), where they place their own equipment in the exchange.  This is deemed ‘less economical’ in many rural areas, resulting in pricing being affected by the renting costs. 

As competition rises, this could be great news then for rural customers; however, the telecoms regulator has not applied the reduced charges ruling to ADSL2+, a next-generation copper-wire technology which offers speeds of up to 24Mbps.  The hope is that BT focus on investing in the new technology. 

The pricing changes should begin from mid August, and under the ruling BT must cut its rates by 12% below inflation per year until March 2014.

In the meantime, Fujitsu is bidding for government money to create a fibre network for rural areas. Both Virgin Media and TalkTalk have said they will offer services on it if the bid is successful.

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Reduced Prices for Home Telecoms

Consumers may be on the brink of reduced home telephone and broadband services as Ofcom make moves to level the wholesale playing field. 

The telecoms regulator has revised the list of rates that Openreach, which manages BT's network, can charge other providers for using its services.  The proposals are the start of a consultation process that will end on 9 June.

With wholesale prices potentially falling by more than 10% per year, companies such as TalkTalk and Sky will see real benefits that could be passed on to consumers.  However, those that provide their own cable network, such as Virgin Media, will not experience those benefits.

Under Ofcom's proposals the prices of two of the ways that BT's rivals get access to its network will come down.  The first, called Local Loop Unbundling, allows telecoms firms to site their equipment in BT exchanges and take over lines to customers.  The second, is called Wholesale Line Rental, which involves telecoms firms simply renting lines from Openreach.

In response, BT released a statement which said: "BT invests more than any other company in the UK's communications infrastructure, so it is critical that it is able to achieve a fair rate of return in order to continue its investment in copper and fibre-based services."

Any concerns BT have will be raised during the continued consultation process, the conclusions of which will be published in the autumn.  Any price changes will take affect later this year.

Slow Take Up on Super-Fast Broadband

Last month, Labour MP Ian Lucas told the government to "pull its finger out" because as yet, no firms or technologies have been chosen to pilot next-generation broadband in the earmarked remote test areas. 

The government has pledged to make the UK the best place for super-fast broadband in Europe by 2015, and as a result, they are pushing ahead with a second wave of funding.

There will be a further £50m made available to local authorities around the UK.  It is estimated that the extra funding will help a further 800,000 homes to benefit from next-generation broadband.

North Yorkshire, Cumbria, Herefordshire and the Highlands and Islands, were all listed as pilot areas for test in October, however no firm or technologies have yet been chosen to be used in the tests.  This is the third of UK homes that are not economically attractive to firms such as BT and Virgin Media because offering next-generation services there would cost too much money.

"This is very much a locally-driven process and we encourage bids from all local people with plans for improving broadband in their local area," said Chancellor of the Exchequer George Osborne.

For more information visit:  Broadband Delivery UK

Virgin Media take on 3G

Following a 'useful' small-scale, experimental, wi-fi network at this year's V festival, Virgin Media is considering launching a nationwide wi-fi network to compete with BT.

They have been inspired by cable operators in other countries, and have been particularly interested in watching developments in the US.  Virgin Media have admitted it would be a "massive undertaking" and that no firm plans have yet been drawn up as yet.  That said; they are clearly up for the challenge, claiming that they could offer a better alternative to 3G networks for those who want data on the move.