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BT’s £600m rural broadband proposal could lead to higher bills

UK INTERNET SERVICE PROVIDER (ISP) BT has offered to plough ?600m into making ‘high-speed’ broadband available in remote parts of the country.

Under the proposal, BT’s Openreach subsidiary said it will ensure that 1.4 million rural homes have access to a minimum speed of 10Mbps by 2020, as part of the government’s plans to introduce a ‘universal service obligation’ (USO) that would allow anyone in the UK to demand a certain standard of connectivity.

“This investment will reinforce the UK’s status as the leading digital economy in the G20. We already expect 95 per cent of homes and businesses to have access to superfast broadband speeds of 24Mbps or faster by the end of 2017,” said BT CEO Gavin Patterson1.

“Our latest initiative aims to ensure that all UK premises can get faster broadband, even in the hardest to reach parts of the UK.”

The Tories’ current plan will connect the final 5 per cent of homes and businesses that suffer shonky internet from 2020 onwards, assuming they request access to the faster connection. In a statement, Culture Secretary Karen Bradley said: “We warmly welcome BT’s offer and now will look at whether this or a regulatory approach works better for homes and businesses.

“Whichever of the two approaches we go with in the end, the driving force behind our decision-making will be making sure we get the best deal for consumers.”

Related: BT profits sink 42 per cent following Italian accounting scandal2

While BT’s process sounds more appealing than the government’s slow rollout plans, Openreach will recoup the costs of its investment by providing services and access to other providers, which means that customers could be slapped with higher broadband bills. Matt Hancock, the UK’s digital minister, told The Telegraph3 that bills are likely to rise as a result.

“Nothing is going to be paid for by taxpayers here. We have already subsidised superfast broadband to the tune of ?1.7bn,” he said. “It’s likely that it’ll be paid for through every broadband bill.”

BT’s announcement comes as a new report from the British infrastructure group of MPs calls for customers to receive compensation if they do not receive the internet speeds that they pay for.

Tory party chairman Grant Shapps, who estimates that 6.7m UK broadband connections may not have access to 10Mbps speeds, said: “Although broadband is increasingly considered to be an essential utility, the quality of customer services has simply not caught up with demand.

“It is unacceptable that there are still no minimum standards in the UK telecoms sector to protect customers from protracted complaints procedures, and ensure that broadband providers are fully accountable to their customers.” u

References

  1. ^ Reuters (www.reuters.com)
  2. ^ BT profits sink 42 per cent following Italian accounting scandal (www.theinquirer.net)
  3. ^ The Telegraph (www.telegraph.co.uk)

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