New rules reducing the amount British Telecom can charge for its wholesale service could see around three million UK homes and business, mostly in rural areas, get cheaper broadband.
Communications regulator Ofcom has proposed reducing the prices BT can charge in parts of the country where it is the sole provider of wholesale broadband services.
The proposals would see nearly 12% of UK households, or around three million homes and business, mostly in rural areas, benefiting from the changes.
Ofcom said the proposed price reductions, which were between 10.75% and 14.75% below inflation, could increase competition between retail Internet Service Providers (ISPs).
The new rules could also lead to a better quality service by enabling ISPs to allocate more bandwidth per customer to deliver faster broadband.
Ofcom expected to publish a statement on the new controls in the summer and planned to introduce them shortly afterwards.
A spokesman for BT said it was crucial for the proposals to strike a balance between control and incentives to invest in rural areas.
“BT understands Ofcom’s desire to move from voluntary to more formal wholesale broadband pricing controls in the most rural parts of the country given this defined market is getting smaller as deregulation expands elsewhere.”
The spokesman said BT, as the UK’s main investor in rural broadband, would engage fully in the consultation process which followed to make its case.
Consumer Focus spokesman Adam Scorer welcomed the move by Ofcom, saying broadband customers in rural areas where BT was the only provider would be pleased to be able to access cheaper broadband.