The price of broadband could fall because Ofcom have now told BT that they have to cut wholesale rates to ISPs in areas where there is just the one network. Broadband rates are still a constant pain for some, as they just do not have enough to pay for the high costs. In the regions we could expect to see wholesale fees fall by 10.7 to 14.7 percent.
Once Ofcom gets their way this will pave the way for more ISP competition, which as we know is a key factor with the cost of broadband. Not all will benefit from this latest move though, only customers in certain parts of Cumbria, Northumberland, Northern Ireland, Norfolk, Scotland, south-west of England, Wales and Yorkshire.
It’s not always about price though, we have seen in these areas that the quality of service is not as good as you would get if you were in the south-east. However, this move is expected to improve the service that you get, as customers will then be offered more bandwidth. When broadband was first launched it was capped, then BT and others started to offer unlimited for an extra cost. It now seems like we are going back again, as ISPs and phone networks are now trying to force bandwidth capping one again.
We have to wonder where BT will find the money to make a loss in these other areas, and it does not take a genius to know where. It will not be new customers signing up, it will existing ones who will have to subsidize others. This is a constant issue, as those loyal to BT always seem to get the raw end of the deal.
ZDNet UK has spoken to one BT Wholesale customer, and said that Ofcom’s move will not have the desired effect that it hopes. He notes that prices may go down a little, but the idea of more competition will just not happen. However, what it will do is deter broadband wholesale investors, as they will not want to invest in something that is going down in price.
In the short term we will not see any changes, but then again this could be something that just gets forgotten about. The only way you will know is when your price of BT broadband starts to increase if you are loyal customer — maybe it is now time to switch?
One of the best deals at the moment in the UK is from Sky, as they offer a package that will give you broadband for a fraction of the price of BT.