BT’s rural deal could add £20 a month to ALL broadband bills: Rivals say cost of ensuring every home has decent access will be passed to customers
- BT has offered to ensure every home has access to decent broadband
- The firm would spend up to ?600million on a five-year upgrade of the lines
- Industry rivals claim that the project costs would be passed on to customers
Broadband bills could rise by ?20 a month under a BT plan to deliver internet access to millions of rural customers, experts warn.
The firm has offered to ensure every home has access to decent broadband – but industry rivals said that the costs will be passed on to customers.
In addition, around 60,000 remote homes still wouldn’t receive the minimum speed because it would cost too much.
The Digital Economy Act, introduced this year, set out an obligation to introduce a minimum speed of ten megabits per second (Mbps).
But ministers are considering a ‘voluntary’ offer from BT to deliver the rollout rather than wait for a request from the Government.
Broadband bills could rise by ?20 a month under a BT plan to deliver internet access to millions of rural customers
It said that BT’s proposal meant many premises would receive substantially more speed and connections far faster than through a regulatory approach.
However, rivals warned this would mean that average bills would be driven up
Under the plans, which would largely be delivered by Openreach – the arm of BT that owns and maintains the cabling – the firm would spend up to ?600million on a five-year upgrade of the lines.
Openreach has the largest fibre broadband network in Britain, covering more than 26.5million premises.
It said the Government’s preferred option of a minimum download speed of 10Mbps, 1Mbps upload and quality conditions will cost ?1.46billion.
Around 1.4million households cannot get the minimum connection speed in the most remote areas, according to Ofcom. But MPs insist the total is far higher and are calling for a refund for those who do not receive the speeds they pay for.
MPs said last week that 16 of the 20 constituencies with the worst download speeds were rural.
BT has offered to install the infrastructure for 99 per cent of premises, with coverage across the board by 2022. But a Government consultation document reveals that 60,000 homes would not get the minimum speed of broadband because the price per household would be above the reasonable cost threshold of ?3,400, saving BT ?400million.
Culture Secretary Karen Bradley said: ‘We welcome BT’s offer and will look at whether this or a regulatory approach works better.
Culture Secretary Karen Bradley said her department ‘welcomes BT’s offer and will look at whether this or a regulatory approach works better’
‘Whichever of the approaches we go with, the driving force behind our decision-making will be making sure we get the best deal.’
The Government said that if BT’s proposal was accepted, it would be legally binding.
BT chief executive Gavin Patterson said: ‘We are pleased to make a voluntary offer to deliver the Government’s goal for universal broadband access.
‘We expect 95 per cent of homes and businesses to have access to superfast broadband of 24Mbps or faster by the end of 2017.
‘Our initiative aims to ensure that all premises can get faster broadband, even in the hardest-to-reach parts.’ But former Tory chairman Grant Shapps warned that ministers were in danger of being ‘hoodwinked’.
He said the history of broadband rollout showed the Government should press ahead with compulsory minimum standards rather than agreeing to a voluntary deal.
He added: ‘Given the appalling track record of missed deadlines and failed delivery on broadband, there is no reason to trust that Openreach will achieve the rural rollout that it now claims.
Ministers are in danger of being hoodwinked into accepting a deal when it would doubtless be more effective to enact the powers they have already passed.’
Tom Watson, Labour’s shadow digital, culture, media and sport secretary, said the public should be ‘wary’ of the announcement.
He added: ‘They will be rightly wary they will be forced to pay the price in extra or hidden charges.’