A woman talks on her phone as she passes the BT building in London, the UK. Picture: REUTERS/NEIL HALL
A woman talks on her phone as she passes the BT building in London, the UK. Picture: REUTERS/NEIL HALL

London — BT Group is proposing a £600m plan to bring faster internet coverage to the rural UK, to be paid for by charges to other broadband users.

By 2020, the former phone monopoly’s Openreach wholesale division would build connections enabling broadband download speeds of at least 10 megabits per second for almost all of the remaining 5% of the population that does not have them, the government said.

That level of service would allow a family to stream high-definition television shows and movies, video conference and surf the web simultaneously.

The proposal follows months of talks between BT and the government over how to implement a universal service obligation pledged by Prime Minister Theresa May’s Conservatives.

UK politicians with rural constituencies in places such as the Scottish Highlands are under pressure to boost broadband service. BT’s rivals — which use its fixed network, the nation’s largest, to deliver internet and landline services — also complain it does not have enough of the full-fibre lines capable of delivering the fastest speeds.

Linking rural broadband to the other wholesale review may be seen by some of BT’s rivals as a quid pro quo regarding an already contentious topic that has divided the telecommunications industry

The government said the voluntary plan would be delivered more quickly than an approach through regulation, though it would consider both. The idea of spreading costs for the plan among Openreach’s customers would be considered in a review of wholesale rates by communications regulator Ofcom, the government said.

"We warmly welcome BT’s offer and will look at whether this or a regulatory approach works better for homes and businesses," Culture Secretary Karen Bradley said. "The driving force behind our decision making will be making sure we get the best deal for consumers."

Linking rural broadband to the other wholesale review may be seen by some of BT’s rivals as a quid pro quo regarding an already contentious topic that has divided the telecommunications industry.

BT is fighting a rate cut proposed by Ofcom in March for one of Openreach’s internet products, arguing it would discourage investment in faster services just as Openreach tries to advance a proposal for more full-fibre broadband. Liberty Global’s Virgin Media has sided with BT, while Sky and TalkTalk Telecom Group sad cutting rates would attract more customers to higher-speed services.

TalkTalk has warned against socialising the costs of any rural broadband plan only on the Openreach network, proposing that a wider industry fund would be a cheaper and fairer way to deliver it.

The rural broadband plan from BT would consider a range of technologies including laying fibre to street boxes and all the way to buildings, as well as fixed wireless solutions.

Fixed coverage would be the priority and BT expects to complete the roll-out by 2021 or 2022. About 99% of UK buildings could have access to at least 10 megabits per second download speeds by 2020, according to BT’s proposal.

Bloomberg

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