BT will have to cut the wholesale prices it can charge Internet Service Providers (ISPs) using its broadband network by 12 per cent on top of inflation each year, under a decision made yesterday by the regulator Ofcom.
The price reduction, which will be in place by mid August of this year and continue until March 2014, will apply to areas where BT is the sole provider of wholesale broadband services.
The reduction will only be imposed on BT’s maximum downstream speed of 8 Mbit/s, which is most used in the areas being targeted. Ofcom claims that the new rates could benefit 3m homes and businesses, mainly in the rural areas of Scotland, Wales and Northern Ireland.
By placing controls on BT’s charges Ofcom (headed by Ed Richards, pictured) expects consumers to see numerous benefits, including more competition between ISPs, and faster broadband services.